Terex/Genie slip into the red
Genie has posted total first quarter revenues of $511.7 million, almost 30 percent lower than in the same quarter last year. The sharp fall in revenues along with other factors caused the business to post an operating loss of $5.9 million, compared to a profit this time last year of $59.5 million.
Order intake in the quarter totalled $498 million, leaving the backlog/order book as of the end of March at $717 million, compared to $1.1 billion last year.
Genie president Matt Fearon said: “Production was quickly reduced in our global facilities due to customer demand and local government mandates. We are beginning to gradually and safely resume operations in response to customer demand and as permitted by government mandate. The current status of our operations can be found on the Terex website under the Covid-19 resources section.”
“In response to the Covid-19 pandemic, the Genie team brainstormed on how to help our local communities in Washington State, which endured the first major outbreak in the United States. The team produced and donated 4,500 protective face shields for local medical professionals in Seattle, Washington. In Watertown, South Dakota, Terex Utilities received a request from a local vocational college to use our 3D printer to help make parts needed for face shields. Thanks to the efforts of our Terex Utilities team, approximately 1,000 shields were distributed to healthcare providers in South Dakota and Minnesota.”
Terex crane sales are now reported within the Material Processing division and therefore not easily visible, last year’s RT and tower crane sales - which we not reported separately, due to the pending completion of the Demag sale - appear to have been in the region of $64 million. This year the Material Processing division reported revenues of $315.6 million compared to $410.5 million on a pro-forma basis for last year, while operating profits came in at $25 million compared to $50.5 million last year.
Terex as a whole reported revenues of $833.6 million almost 27 percent down on the same quarter last year, while the company saw pre-tax profits plunge into negative territory with a loss of 25.5 million, compared to a profit in the same quarter last year of $75.2 million.
Terex chief executive John Garrison said: “First and foremost, we have taken measures to prioritize the health and safety of our team members, families and customers during the Covid-19 pandemic.”
“While the first two months of the year met our expectations, during March, global economic activity, including customer capital equipment purchases, sharply contracted. In response to this unprecedented situation, we swiftly implemented safety, financial, and production actions.”
This is obviously not a great set of numbers from Genie or Terex, but we are in strange times and Genie had to face up the Covid-19 crisis early by US standards, as Washington state experienced some of the county’s first cases. The backlog is better than it looks, in that last year’s order book was magnified by very bad weather that hit production in the last few weeks of the first quarter preventing the completion and/or shipment of machines. Those same challenges also reduced revenues of course – opening up that comparison, but that is another issue.
All in all these are exceptional times and it looks - from the numbers - as though Terex and Genie are taking the right steps to weather what we all hope will be a relatively short - although steep - downturn without losing the support of its customers and dealers, not to mention its employees.
The second quarter’s results will be more telling, although almost certainly worse given where we are, but by the time they are posted at the start of August, the picture will hopefully be a good deal clearer and even look a good deal more positive?