Ramirent first half hit by weak demand

30 July 2014

Finland-headquartered rental company Ramirent has maintained a subdued outlook for the full-year after reporting a fall in revenues and profit for the first six months of 2014.

The company said its results were impacted by weak demand in many of its markets, with revenues down 7.7% year-on-year to €289 million for the six months to 30 June.

Profit for the period stood at €9.7 million, compared to €23.3 million for the first half of 2013.

But Ramirent invested more in its business over the period, with gross capital expenditure for the six months between January and June standing at €102 million, up from €62.4 million a year ago.

However, it said full-year capital expenditure was expected to be around the same level as in 2013. It said economic growth in 2014 was expected to be modest, and construction market demand remained mixed in its core markets.

CEO Magnus Rosén said,Lower than expected demand and slow progress in the start-up of new projects impacted negatively on sales in Sweden.

"Our profitability in Norway was impaired by low demand from residential construction, decreased fleet utilisation and increased pricing pressure.

“In Finland, acquisitions and recovering market demand supported sales growth. Demand picked up in the Baltic States and Poland and we have relocated fleet capacity to these markets during the first half of the year.

"Softness in construction activity in Denmark, the Czech Republic and Slovakia continues to burden our operations in these countries.”

Mr Rosén added, “Our industry is transforming with rental developing into two complementary business models, rental over-the-counter and provision of integrated solutions, creating an opportunity for Ramirent to leverage its know-how of both."

First half deals

Ramirent completed several deals during the first half to further its More Than Machines initiative – delivering value-added services and know-how as well as core rental equipment.

It acquired a majority stake in Sweden-based Safety Solutions Jonsereds AB, a deal which it said supported its growing focus on safety, while it also acquired Dry Construction Concept, a weather shelter and scaffolding operation.

Ramirent also strengthened its industrial services operation with an outsourcing agreement with Empower for significant parts of their equipment fleet in Finland.

And in July, Ramirent signed a contract with German-based Zeppelin Rental to form a joint venture to serve the Fehmarnbelt tunnel construction project, subject to approval from relevant authorities.

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