Ramirent results mixed but stable

A slow Swedish market has led to mixed but overall stable results for Ramirent in the second quarter of 2019.

Tapio Kolunsarka, President and CEO of Ramirent, said, “Our performance in the second quarter was two-fold. Market conditions, as well as our profitability, remained solid in Finland, Norway and Eastern Europe, whereas in Sweden, we saw continued weak demand and our profitability was consequently low.”

However, he highlighted the fact that, overall, comparable EBIT (earnings before interest and tax) was higher than in the second quarter of the previous year, standing at €20.3 million or 11.9% of net sales, signaling the strength of the company’s underlying geographical mix.

The decrease in sales and EBIT in Sweden has been attributed to slow sales in larger non-residential projects, the divestment of Ramirent’s Temporary Space business, and a decline in demand in the residential sector in the Stockholm region.

“Despite the negative sales trend in first half of 2019, our sales pipeline of new projects remains still active and our view of the medium-term development of the market remains optimistic,” Kolunsarka said.

Net sales in the second quarter were down 3.6% on the equivalent period in the previous year to €170.6 million, but gross capital expenditure rose 19.5% to €68.6 million.

Since the second quarter, Ramirent has announced the acquisition of Stavdal in Sweden, and Ramirent itself is in the process of being acquired by Loxam.

It is hoped that the acquisition of Stavdal will improve Ramirent’s performance in Sweden; “Helped by the Stavdal acquisition, we have unique opportunities to raise our competitiveness to new levels and create a new market leader in Sweden,” said Kolunsarka.

Looking ahead to the rest of the year, Ramirent’s forecasts for equipment rental demand vary significantly across its various geographies. In Sweden as a whole, market demand is expected to slow down in 2019, while in Finland the market should remain stable. Meanwhile, in Norway, the Baltic countries, Poland, the Czech Republic and Slovakia, market conditions are forecast to remain favourable.

Kolunsarka said, “For the second half of the year, we focus on generating strong cash flow enabled by clearly lower investments and improved working capital management.”