Although sales were up 14.4% to €200.6 million, the first quarter of 2019 has shown mixed results for Cramo, with conditions varying across segments and geographies.
The Finnish rental company’s CEO Leif Gustafsson said, “Cramo’s first quarter performance was mixed. The Equipment Rental division fell short of expectations as lower than expected organic sales growth impacted on the profitability. The Modular Space division’s sales continued according to expectations, but profitability for the first quarter was negatively affected by the integration of the NMG.”
Overall, organic sales grew by 2.4% and comparable EBITA (earnings before interest, taxes and amortization) rose 0.8% to €24.1 million or 12% of sales, compared to €23.9 million or 13.6% of sales in the first quarter of last year. This improvement was attributed to the Modular Space segment. EBITA came to €20.9 million or 10.4% of sales, versus €23 million or 13.1% of sales in the first quarter of 2018.
Cash flow from operating activities was €48.8 million, up from €20.8 million in the same period last year, while ash flow after investments was €12.4 million – impacted by Cramo’s acquisition of shares of KBS Infra.
Return on capital employed (ROCE) dropped from 10.9% in the first quarter of 2018 to 8.9% in the first quarter of this year, and gross capital expenditure (CapEx), including acquisitions, was down 57.3% on the first quarter of 2018 to €32.7 million.
Looking ahead, Gustafsson said, “The rental market outlook varies between the countries, with slowing growth in Sweden, and a stable market in Finland, Norway, Germany and Austria. In the Eastern European countries, including the Czech Republic and Slovakia, favourable market conditions are expected to continue. The outlook for the Modular Space market remains strong.”
In February, Cramo announced demerger plans to spin-off its Modular Space division as a new listed company called Adapteo. The partial demerger is expected to be completed by the third quarter of 2019.