Harsco sees hope in infrastructure spending
By Patrick Hill29 January 2009
US-based Harsco Corporation's access division reported a 13% decline in its fourth quarter sales in 2008 - falling to US$339 million - but forecast "modest growth" in its access business in the second half of 2009 as economic stimulus packages start to impact on infrastructure spending.
Currency changes caused 90% of the fall in revenues at the Infrastructure division, which was previously known as Access Services and comprises SGB, Patent and Hünnebeck. The currency adjusted decline of 2% was the result of a lower performance primarily in Europe. Operating profit, before restructuring charges, was $34.4 million in the quarter, down from $51.4 million last year.
Harsco said it expected the first half of 2009 to be very difficult, but anticipated "modest growth" in its access business in the second half of 2009 compared to 2008.
Salvatore Fazzolari, Harsco chairman and chief executive officer, said the upturn would be the result of "dramatic actions being taken by the central banks of the major economies of the world; the introduction into these economies of major economic stimulus packages later in 2009, including significant spending for infrastructure projects; and the anticipated return of a more normalized project lending environment," according to
Research by AI's sister magazine, International Construction, shows that additional 'stimulus' spending on construction in 20 major economies will come to $820 billion over the next two years. To read more, follow the link above-right.
Harsco's total sales for the final quarter of 2008 fell by 21% to $666.7 million, with the Metals division the worst performer, down 28% to $291 million. Harsco said there had been an "unprecedented" fall in demand for steel, with many steel mills working at 40% of capacity.
Late in 2008 Harsco said it aimed to expand its infrastructure business globally and will eventually replace the SGB, Patent and Hünnebeck with the Harsco Infrastructure name.