Palfinger reacts pragmatically to year end figures
By Maria Hadlow26 January 2009
Palfinger's preliminary results for 2008 showed a 14% increase in revenue due to a strong beginning to 2008 and three acquisitions. A 31% drop in earnings, however, reflected the weakening market and the accounting rules which apply to acquisitions, such as depreciation and impairment.
Two of Palfinger's acquisitions were in the access market - The MBB Group at the end of 2007 and the Elevant access platform unit of the Wumag Group - the third addition being the US truck body manufacturer Omaha Standard.
CEO Herbert Ortner said, "2008 was not an easy year for Palfinger, but despite all the difficulties we have reason to be satisfied. Our strong market position and the flexible structures that we established in previous years have supported us in this environment. They constitute enormous competitive advantages, especially in difficult times, and therefore the consolidation in our industry also opens up new opportunities. We achieved further growth in revenue, and our flexibility allowed us partly to absorb the drop in orders in 2008."
While Palfinger enjoyed stable markets in France and Germany until the forth quarter: Spain, UK and Italy "came to a standstill in the course of the financial year." Palfinger was forced to take measures and laid off its temporary workers. This was followed by a reduction in its core workforce in November 2008 and, for a three month period; the company has introduced short-time work in Austria from January 2009 onwards.
In its preliminary 2008 results report Palfinger says, "The development of the overall economy will continue to have a significant influence on the Group's business performance in 2009. At present Palfinger is feeling the consumers' reluctance to make investments, but government aid and economic support programmes are expected to reinvigorate infrastructure investments. Management deliberately has chosen not to counteract utilisation beyond capacity in the first months of 2009 in order to have sufficient flexibility in case of a recovery of the market. Moreover, Palfinger launched a project to strengthen the Group's earnings and financial structure. This project is based on further savings in fixed costs, process improvements, revenue increases, and measures to reduce the capital employed."