Harsco sales down 25%
By Patrick Hill11 May 2009
Revenues of Harsco Infrastructure in the first quarter of 2009 fell US$95.1 million, or 25% from $378.8 million in the same period last year, to $283.7 million. The lower performance was due primarily to reduced end-market demand, particularly in the United Kingdom, and to negative foreign currency translation effects.
Operating income for the segment, which comprises SGB, Patent Systems, and Hünnebeck, fell 50% to $18.8 million, from $37.8 million in the first quarter of 2008. Operating margins declined to 6.6% from 10.0%.
Overall, Harsco's first quarter revenues from continuing operations were $696.9 million, down $290.9 million or 29% from the first quarter of 2008. Foreign currency translations decreased sales by $140 million, almost half of the decline. Operating income was $37.2 million, 63% less than the $99.4 million in 2008.
The company said the market changes caused it to relocate rental assets from the United Kingdom to the Middle East and Asia Pacific and to further reduce capital spending. It will continue to relocate equipment to emerging markets and to stable sectors, such as infrastructure maintenance, hospitals and education.
Harsco said its outlook for 2009..."remains challenging due to the impact of the global recession." It does not expect effects of any stimulus spending until 2010.
During the first quarter, Harsco Infrastructure generated 41% of the company's revenues and 51% of operating income.