Demag Cranes' earnings climb

18 March 2008

Results at Demag Cranes AG for the third quarter of the company's financial year show a significant rise in earnings despite its port technology segment being hit by high manufacturing costs over the last three months.

In the first nine months of the financial year EBIT rose18.9% to € 65.2 million (US$ 89.2 million), but an adjustment in the third quarter saw EBIT drop by 11.4% to € 21.2 million ($ 29 million) for that period.

This was mainly caused by higher manufacturing costs in the company's Port Technology segment for its Generation 5 mobile harbour cranes, along with delays in sales bookings due to transport bottlenecks, according to the company.

Harald Joos, Demag CEO, said, “We are working hard on a set of action plans to achieve lasting cuts in manufacturing costs in the Port Technology segment. I am confident that we will resolve the current issues and we will then return to significantly higher profitability in this segment.”

Generation 5 models already account for 70% of Demag's mobile harbour crane sales, compared to 30% at the end of last year. And, according to Demag, the Port Technology segment received an unexpectedly high monthly order of € 50 million ($ 68.5 million) at the beginning of the fourth quarter, across its model range.

“The average order intake in the Port Technology segment is usually € 25 million ($ 34.2 million) per month. The excellent order situation in the Port Technology segment underscores, in particular, that the market for mobile harbour cranes is continuing to grow and that our products are very well received.”

Overall group orders remained strong with a 13.5% increase over the previous year's three-quarter figure. Order intake in the Industrial Cranes segment grew 31.5% year-on-year to € 148.2 million ($202.9 million) in the third quarter. This resulted from “the strong demand for the standard and process crane product lines,” the company said.

Group sales in the third quarter climbed 11% to € 276.2 million ($ 378.2 million) year-on-year. This amounted to an 8.4% rise in the nine month period. The Industrial Cranes segment showed a sales increase of 12.6% to € 119.8 million ($ 164 million) in the third quarter.

“Essentially, all product lines saw significant growth,” added the company.

• Demag Cranes'adjusted annual forecast for the 2006-2007 financial year show group sales at € 1.04 billion ($ 1.42 billion), EBIT at € 93 million ($ 127.3 million) and Group EBITDA at € 113 million ($ 154.7 million). The year's official financial statement is out on 12 December

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