Terex makes $103m loss at aerials and construction divisions
22 October 2009
Terex AWP sales fell by 66.5% to US$397.7 million for the third quarter of the year and the division made a net loss of $50.1 million.
The company said its rental customers in North American and Europe continued to age and reduce their fleets and defer investment.
Likewise, Terex's construction division saw its sales fall by 55.9% to $236.2 million and the division made a net loss of $59.8 million.
The losses at the aerial platform and construction divisions together produced a group net loss of $103.1 million for the quarter, offsetting profits of $12.1 million in the crane segment and $5.4 million in the Materials Processing & Mining business. Overall, Terex group revenues fell by 51.2% to $1.226 billion.
Tom Riordan, Terex president and chief operating officer, said; "The Aerial Work Platforms (AWP) segment continues to feel pressure from the cash management actions of its rental customer base, and we expect that this trend will continue into the spring of 2010."
The company said it was unlikely to be profitable in the final quarter of the year and that total annual sales will be around half those of 2008.
"This was a disappointing quarter but we feel that we are turning the corner to better performance," said Ron DeFeo, Terex chairman and chief executive officer.
"We have built a company that is both geographically and product diverse, but virtually no part of our business has weathered these market conditions unscathed. Fortunately, we see signs that certain markets have stabilized, and even a few signs that point to growth."
Mr DeFeo said Terex was now at an "inflection point" in the business cycle and that there would be more of a focus on growth going forward; "We have obviously taken a defensive posture to preserve the enterprise during this period of incredible economic uncertainty, but we believe progress can be made from here going forward.
"We recently held a North American dealer and customer event, and what we heard reinforces our views that the current business environment has stabilized and optimism is beginning to build for 2010 and 2011."
Terex said cost reduction efforts at the Construction division would continue; "In particular, labour reductions in Germany have been initiated and will continue through the remainder of the year."
The division has two facilities in Germany, the former Schaeff factory at Langenburg that makes mini excavators and wheeled loaders, and the former Atlas plant at Ganderkesee for excavators.