Ramirent’s net sales for the fourth quarter of 2018 came to €188.6 million, representing 1.5% growth at corresponding exchange rates, compared to the equivalent period in 2017.
The Finish rental company achieved this despite the previous year’s high comparison figures and the sale of its Temporary Space business to Procuritas Capital Investors during the quarter.
Comparable EBIT (earnings before interest and tax) was €23.6 million, or 7.6% of net sales, up from €23.4 million in the equivalent period of 2017, when it was 12.3% of net sales. Meanwhile, EBIT stood at €14.3 million, down 42.2% from the €24.7 million recorded in the fourth quarter of the previous year.
It should be noted that the fourth quarter results were affected by Ramirent’s divestment of its Danish equipment rental business to GSV Materieludlejning in December 2018. The value of the transaction was approximately €33 million.
Ramirent’s President and CEO Tapio Kolunsarka said, “In the quarter, we carried out several initiatives to improve and strengthen our business portfolio. In November, we closed the divestment of our Temporary Space business and in December, we announced the divestment of our Danish equipment rental business. These divestments enable us to better focus on our core business of equipment rental and related services and re-invest capital to areas where we see higher returns.”
Looking at the full year, Kolunsarka said, “We achieved solid sales growth with strong improvements in profitability in all of our operating segments and took several actions to shape our business portfolio to be more capital-efficient.”
The company recorded net sales of €711.7 million in 2018, up by 3.8% or 6.9% at comparable exchange rates from €685.5 million in 2017.
Comparable EBIT was €106.8 million or 15.0% of net sales, up from €89.4 million in 2017 when it was 13% of net sales, and EBIT was recorded at €66.9 million, representing a drop from the €90.7 million recorded in the previous year.
Gross capital expenditure increased by 19.9%, from €166.4 million in 2017 to €199.5 million in 2018. However, this included the €21 million acquisition of SRV Kalusto Oy.
ROECE (return on capital employed) was 10.2%, down from the 14% recorded in the previous year.
Looking ahead at 2019, demand for equipment rental is expected to vary considerably across the regions where Ramirent operates. In Sweden, market demand is forecast to slow down; in Finland and Norway, market conditions are expected to remain stable; and in the Baltic countries, Poland, the Czech Republic and Slovakia, the markets are expected to remain favourable.
Kolunsarka said, “Entering into 2019, Ramirent’s business is in an excellent position – we have a strong balance sheet and a clear, capital-efficient strategy, which is geared towards generating high returns and positive cash flow after investments.”