Cramo sees recovery in 2010 despite 5% fall in Q1

By Murray Pollok13 May 2010

Cramo Group's sales fell by 5.1% to €101.4 in the first quarter of 2010, although the reduction increases to 11.8% in local currencies. Net losses for the period were €7.4 million.

Sales increased in Sweden and Norway but decreased in Cramo's other markets, which comprise Denmark, the Baltic States, Poland, the Czech and Slovakian Republics and Russia.

"After the extremely difficult year 2009, I believe that the demand for equipment rental services will recover in 2010", said Cramo's CEO, Vesa Koivula, "In particular, residential construction is expected to pick up during the spring in several markets. In Finland, for example, building permits issued in January this year exceeded the previous year's level by 13 per cent in terms of cubic volume...

"In Russia, construction activity is beginning to recover, driven particularly by residential construction. The cold and snowy winter in the first months of the year postponed construction start-ups in all markets...Price competition has continued to be tough, but we expect prices to improve slowly as the market recovers."

EBITDA (profit before interest, tax, depreciation and amortization) was €22.6 million, and positive in Finland and Sweden, slightly negative in Norway and unsatisfactory in Denmark and Central and Eastern Europe.

Cramo said it expected the construction and equipment rental service markets to recover gradually in 2010. It said forecasts were that construction activity will begin to increase in 2010 in Sweden and possibly Russia, and strong growth in Poland will continue.

However, it said that "construction markets in Norway, Denmark, the Czech Republic and the Baltic countries are expected to decline further. The overall construction volume is not expected to grow in Finland, but
there are clear signs of increasing residential construction in sight."

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