Ramirent has reported a solid underlying performance in the first quarter of 2019, though it is compared with a particularly strong first quarter in 2018.
Ramirent’s President and CEO Tapio Kolunsarka said, “Ramirent’s performance continued to be solid in the first quarter of 2019, despite the strong comparable figures of the previous year. Performance in Norway, Eastern Europe and Finland remained good. However, that was not enough to fully compensate for the weakness in Sweden.”
Net sales were down 2.7% to €163 million, from €167.5 million in the equivalent period of 2018. This was mainly attributed to a decrease in Stockholm, though the company said it continues to have a solid pipeline of large projects in Sweden overall, and it remains optimistic about the medium to long-term growth prospects of the Swedish equipment rental market.
Ramirent’s EBIT (earnings before interest and taxes) came to €17.1 million, or 10.5% of net sales. This was down from the €21.2 million and 12.7% of net sales reported in the first quarter of 2018.
Return on capital employed (ROCE) was 9.4%, compared to 15.1% in the same period last year, and gross capital expenditure totalled €43.3 million, down 18.7% from €53.3 million in the first quarter of 2018.
Ramirent’s cash flow after investments improved from minus €13.7 million in the first quarter of last year to €32 million in the first quarter of this year. The improvement was driven by the completed divestment of Ramirent’s Danish rental operations as well as lower investments
Given these sound results, the company’s 2019 guidance remains unchanged, with comparable EBIT expected to be at approximately the same level as in 2018.
Kolunsarka said, “Our business is in solid shape, and we continue to have opportunities for performance improvement in 2019. With our strong balance sheet and strengthening cash flow we are ready to accelerate our growth through synergistic acquisitions.”
Meanwhile, in Finland, Ramirent has just announced that it is to acquire the site accommodation rental business of Rocla Solutions Oy, one of the country’s largest manufacturers and distributors of industrial forklift trucks.
The company recently signed an agreement to acquire Swedish general rental company Stavdal with the intention of becoming the leading provider of rental equipment in the country. The transaction is valued at approximately €158 million and is expected to close by the end of the third quarter 2019.