High capacity brings strong growth at Terex
25 July 2008
Net sales increased about 34%, excluding the translation effect of foreign currency exchange rate changes.
"Global infrastructure and energy demand continues to drive strong sales of cranes, particularly larger capacity lattice boom crawler cranes, tower cranes and rough terrain cranes. The North American market remains strong for large capacity cranes, but sales of smaller capacity cranes, including boom trucks and lower capacity truck cranes, remain soft," the company said.
Operating margin increased to 15.6% during the second quarter of 2008, up from 10.4% in 2007.
"The increase was primarily driven by higher volume and a favourable sales mix, combined with historical pricing actions working through the backlog. Cranes mix in the quarter was orientated towards higher margin larger capacity cranes. Supplier constraints in Europe for select components, such as hydraulics and gear boxes, have improved, as have welding and assembly capacity constraints," the company said.
Capacities are expected to increase throughput the segment, while keeping additional fixed costs to a minimum. "For example, production of rough terrain cranes in the company's Waverly, Iowa, US, facility has already doubled in the past year as a result of efficiency gains with no increase in square footage. Future throughput improvements are expected in the company's German and Chinese crane manufacturing locations," the company continued.
Across the Terex Corporation, net sales of $2,935.9 million in the second quarter of 2008 were 25.3% above the same period in 2007.
Ron DeFeo, Terex chairman and CEO commented, "The infrastructure and commodity boom is driving strong demand for our cranes and mining equipment. Based on our increasing backlog for these products, we expect these positive trends to continue."