Second quarter slowdown at Cramo

Cramo's growth rate slowed in the second quarter of the year and it is now expecting flat sales for the year rather than the growth forecast previously.

The company said the revision reflected "high uncertainty" in the economic outlook as well as the sale of its portable accommodation business in Finland earlier this year.

Rental demand continued to grow in the second quarter in Norway (+10%), Eastern Europe (+11.4%) and Sweden (+4.6%), but elsewhere demand has slowed. Sales in Denmark were down -6% and in Central Europe (the former Theisen business in Germany, Austria and Switzerland) fell by 8.6%.

Vesa Koivula, president and CEO of Cramo, said the problems in Southern Europe during the Spring had affected the economic climate throughout Europe; "Cramo does not operate in Southern Europe, but the general uncertainty has meant customers holding back their investment decisions.

"Also Central and Northern Europe have been affected. However, in some of our markets, in particular in Norway, the Baltic countries and Russia, demand is growing."

Sales for the second quarter were €161.4 million, which represents year-on-year growth of 3.2% after accounting for the divestment of the Finnish portable accommodation business in March. Profits after tax rose by 36.8% to €4.7 million for the second quarter.

Cramo said economic uncertainty had impacted on construction demand in German and Austria. The company closed its small Swiss business during the first half of the year.

Russia is a bright spot for the company. Residential construction is growing and Cramo signed several significant rental contracts in the period, including modular space rental agreements with Nokian Tyres in St Petersburg, at the Volvo factory in Kaluga and an Alstom power plant site in Narva.

It also opened a new depot in Rostov-on-don in support of projects being undertaken by contractor YIT in the area.

The company has slightly scaled back its fleet investment, spending €65.1 million in the first half of this year compared to €71.2 million in the same period in 2011.