Mills expands 2011 rental CapEx budget
21 June 2011
The equipment rental division of Brazilian rental and scaffolding company Mills Estruturas e Serviços de Engenharia (Mills) is increasing its CapEx budget by 25.1% from R$128.9 million (US $81.09 million) to R$161.3 million ($101.55 million). Overall, Mills' 2011 CapEx budget is R$432.7 million ($272.49 million), or 28.3%, above its initial forecast of R$337.2 million ($212.34 million). On top of this, the company aims to open five new locations in 2011.
New equipment will be purchased to supply the new branches, with Mills noting "the demand for motorized access equipment continues strong. The utilization rate remains above the normal level of 75%... despite the significant increase in the volume of equipment in this division in recent months." Mills will invest R$32.4 million ($20.4 million) in new equipment.
The increase comes from strong market demand and success at the rental company's 10 new branches that opened in 2010. The new depots, located in the Southeast, South, North and Northeast regions of Brazil, contributed aggregate revenues of 48% of the total revenue for the rental division in the first quarter of 2011. The company has started the implementation process of three new branches located in São Luís (in the state of Maranhão), and in Itaboraí and Resende, both in the state of Rio de Janeiro.
"The revised CapEx for 2011 is part of our plan to invest R$1.1 billion over the 2010-2012 period," the company said in a statement. "We believe that the cash generated by our operations and the recent debenture emission totaling R$270 million will be sufficient to finance Mills' forecast investments for 2011."
Overall, Mills will invest R$39.9 million ($25.12 million) in heavy construction, R$199.5 million ($125.63 million) in Jahu - residential and commercial, R$24.8 million ($15.61 million) in industrial services, R$161.3 million ($101.55 million) in rental and R$7.2 million ($4.53 million) in corporate with a total 2011 CapEx budget reaching R$432.7 million ($272.48).
