Profit surge for Manitowoc
Crane manufacturer Manitowoc has reported a strong surge in profits for the second quarter and first half.
Total revenues for the six months to the end of June were almost five percent higher at $922.7 million, driven by higher sales in the Americas partly offset lower sales in the Middle East, while pre-tax profits jumped 10 fold to $26.5 million, this in spite of a $25 million charge for the early retirement of debt, partly offset but some one off gains in the second quarter.
Second quarter revenues improved 1.9 percent to $504.7 million, although order intake fell 14 percent to $372 million due to a reduction in order intake from North American buyers. Pre-tax profits though jumped almost six fold to $49.9 million, thanks in part to a 15.9 million one off gain in the settlement of a legal matter. Interest costs were also significantly lower. The company is forecasting full year revenues of around $1.9 billion, roughly three to four percent up on 2018.
Chief executive Barry Pennypacker said: “The second quarter marked our ninth consecutive quarter of year over year adjusted EBITDA margin improvement, and our fifth consecutive quarter of positive adjusted diluted earnings per share. The foundation of The Manitowoc Way is firmly in place reflecting the strength of our operating model to continually improve financial results. In the quarter, we repurchased approximately 473,000 shares of common stock, underscoring our commitment to effectively deploy our capital.”
“In the quarter, order intake from European customers was in line with our expectations, reflecting positive reception of our products showcased at the bauma trade show where we introduced six new cranes. Our North American orders slowed as customers became more cautious as a result of uncertain market conditions. Overall, I am very proud of our team and the results we posted in the first half of the year and look forward to our continued transformation into a leaner, more profitable Manitowoc.”
A good result from Manitowoc which appears to be getting its ‘mojo back’ and market willing could be on target for a strong second half. A good deal will depend on the overall global economy which is beginning to look a little shaky. The fall in order intake in North America will be of some concern, especially at a time when Tadano is forecasting a very strong second half. However the demise of Terex truck mounted cranes and smaller lattice crawler cranes in the North American market will provide Manitowoc with some opportunities, given that it has a new line of small to medium size crawler cranes, and several relatively new truck mounted cranes.
While the company still has much to do, it has all the right product ingredients in place, at a time when some of its competition could become distracted, all of which provides plenty of opportunity for a strong second half, putting the business in a great place for a two billion + year in 2020.