Demag Cranes exceeds expectations
By Euan Youdale22 December 2008
Demag Cranes exceeded targets set at the beginning of the 2007/2008 financial year, with growth of 13.5%.
On 30 September 2008 revenue stood at €1.226 billion (US$1.729 billion). Guidance from the company at the beginning of October 2007 was €1.130 ($1.588) to €1.160 billion ($1.630 billion) for the year.
Adjusted profit before interest and tax (EBIT) was also considerably higher than the forecast €110.0 million ($155 million), at €138 million ($194 million).
The group increased net profit and earnings per share and reduced net debt. On September gearing stood at 6.8%, compared to 55.8% a year before.
Order intake was up 9.8% to €1.323 billion ($ 1.865 billion). At segment level, Industrial Cranes profited from the high demand for the Standard and Process product lines, lifting orders by 16.8% to €672 million ($947 million).
The Industrial Cranes segment order book grew by 39.3 %, while the Port Technology segment saw orders fall slightly year-on-year from €323 million ($455 million) to €317 million ($446 million).
This was mainly because the segment had received an order for the first 10 Automated Stacking Cranes (ASC) in the 2006/2007 financial year, said the company.
Adjusted group EBIT grew 45.3% to €137.5 million ($193 million), surpassing the guidance figure forecast in August 2008 by more than €125 million ($176 million). This was attributable, in particular, to the Industrial Cranes segment with its adjusted EBIT rise of 91% to €47.8 million ($67 million).
The Port Technology EBIT margin also improved from 3.5% in the previous year to 6.8% in the period under review. "This performance highlights the fact that the company has resolved the problems with manufacturing costs relating to the Generation 5 mobile harbour cranes sooner than planned," said the company.
However, Demag Cranes' management board decided not to make revenue and EBIT forecasts for the 2008/2009 financial year due to the uncertain economic conditions. Nevertheless, the company expects the next two years to be profitable.
"The Management Board intends to maintain the solid base built over the past financial year and if necessary implement new measures to improve cost efficiency. The aim remains to keep a sound balance sheet and use strong cash flows to invest in products and attractive markets," the company said.