Second quarter sales up as Cramo eyes market recovery

Finland's Cramo reported second quarter sales of €114 million, up 4.2% on the €109 million recorded for the same period last year. Following a €4.6 million net loss for the second quarter of 2009, the company slipped further into the red this year recording a net loss for the quarter of €4.9 million.

Cramo said the construction and equipment rental service markets are expected to recover gradually in the company's market areas through 2010. It said market forecasts show that growth is expected to continue in Poland and construction activity will begin to increase in Finland, Sweden and possibly also in Russia.

The construction markets in Norway, Denmark, the Czech Republic and the Baltic countries are expected to decline further, although the outlook for the Baltic countries has nevertheless improved.

President and CEO of Cramo Group, Vesa Koivula, said, "A turn has occurred in the market as expected. Although it is not yet visible in the Group's profit, I expect the second half of the year to improve compared to the first half of this year and the second half of 2009.

"The most recent construction market forecasts as well as messages from our customers have been positive. Residential construction in particular has picked up in several markets," he said.

Mr Koivula said that in Finland the number of building permits issued for residential construction in the first half of 2010 showed a substantial year-on-year increase, while commercial and office construction continued to perform at a low level.

The company recorded sales of €22.7 million in Finland during the second quarter, up 0.5% on the €22.6 million reported for the same period last year. Earnings before interest, tax and amortisation (EBITA) grew 39.2% to €2.5 million, up from €1.8 million 12 months ago.

"In Sweden, the growth in residential construction is expected to exceed earlier forecasts, while commercial and office construction will develop more slowly than previously estimated," said Mr Koivula.

Cramo's sales in the second quarter in Sweden jumped 14.4% to €60.6 million, up from €52.9 million for the same quarter last year. Unexpectedly high repair and maintenance costs during the first half as well as intra-group transfers of equipment hit EBITA, which slipped 9.9% to €8.8 million, down from €9.8 million 12 months ago.

Total construction growth in Sweden is expected to exceed the growth levels in Finland both this year and next according to Mr Koivula. "In Russia, construction activity is also starting to recover, in particular in residential construction," he said.

Mr Koivula said, "In line with our targets, our cash flow was strong during the first half of the year and the balance sheet improved. As the outlook improves, we are again investigating growth opportunities based on acquisitions."