10.05.2018

Mills turns the corner

The Rental division of Brazilian rental company and contractor Mills has posted its strongest quarter since 2016

First quarter revenues were 26 percent higher than in the same period last year at R51.4 million ($14.3 million) with rental revenues up 12.5 percent to R42.3 million ($11.8 million) while new equipment sales increased 24.5 percent to R2.1 million ($585 million) and used equipment sales jumped from just R200,000 ($56,000) last year to R5.9 million this year ($1.6 million). The division cuts its operating profit loss to R2.9 million ($808,000) from R11.2 million last year ($3.1 million). Physical utilisation edged up from 52.9 to 53 percent.

The group as a whole posted revenues of R79 million ($22 million) – up 19.5 percent, with a pre-tax loss of R29.6 million ($8.2 million) compared to a loss last year of £57.8 million ($16.1 million).

The company said: “The result of the first quarter was the best since the third quarter of 2016, proving our assertiveness at the commercial strategy in the Rental business unit and resizing of the Construction business unit, that continues being impacted by the low level of heavy construction activity in the country. During this quarter, we increased prices in both business units and improved the penetration in the non-construction segment in Rental and initiated the process of closing four warehouses in the Construction business unit, but keeping commercial presence nationwide, and focusing on long-term complex works.”

Vertikal Comment

It is good to see Mills making a comeback having paid dearly for a gross over expansion of its aerial lift and telehandler rental business during Brazil’s boom years.

With sales of used equipment picking up rapidly, it looks set to move back into profit this year as depreciation costs are reduced and rental rates show signs of improving. Still plenty of red ink, but there is truly ‘light at the end of the tunnel’ now.