Ramirent lowers 2016 profit forecast after write-downs

Ramirent has lowered its profit forecast for the year following a number of asset write downs relating to its temporary space business in Norway, operations in Sweden, and an ERP system implementation.

The company’s third quarter results will include write-downs of €5.9 million and an intangible write-down of €10.9 million for the discontinued roll-out of a common ERP system outside Scandinavia.

The company’s new guidance for the year is still for net sales in local currencies to increase over 2015, but for the EBITA margin to be lower than 2015.

The company’s temporary space operation in Norway is to be refocused, while it will also reorganise parts of its Solutions business in Sweden and also its Europe Central business where profits have been “unsatisfactory”.

”To improve performance we will take determined actions to reorganize non-performing parts of our business and start driving improved sales mix and productivity”, said Tapio Kolunsarka, President and CEO of Ramirent.

“In the long-term we see solid potential to grow and improve profitability in all of Ramirent’s Segments by optimizing the business platform, which has been built in the past years. However, in the near future we stay focused on putting our basics systematically right and delivering improved profitability.”

Other actions planned include a reduction in IT development spending, a greater focus on the core general rentals business, and a focus on improving pricing through more effective price management systems.