Helsinki, Finland-based multi-national rental company Rakentajain Konevuokraamo Oyj last week reported strong nine-month operating profits. RK reported € 285.8 million (U.S. $370 million) in consolidated sales for the first nine months of 2006, an 18-percent increase from pro forma sales in the first nine months of 2005. RK has 250 branches specializes in equipment rental services as well as the rental and sale of modular space.
Company officials said construction volumes are expected to grow in all of RK’s operating regions — including Finland, Sweden, Norway, Denmark, the Netherlands, Estonia, Latvia, Lithuania, Poland, the Czech Republic and Russia — during the current year. Euroconstruct, an international construction business research group, has forecast that the Nordic construction market will expand by about 4 percent in 2006, with a slight slowdown in growth expected in 2007-08. Housing construction and renovation projects are expected to show the strongest growth. The construction investment growth rate in Russia and Central and Eastern Europe is currently running considerably higher than in the Nordic countries, the group said.
RK forecasts that equipment rental services in all its market areas will show a faster growth rate than the total growth in the construction market because of the rising rental penetration rate. It also expects faster growth in demand for modular space.
Third-quarter sales rose 17.6 percent against pro forma sales a year ago. January to September consolidated operating profit before amortization on intangible assets resulting from corporate acquisitions jumped 262.7 percent to € 49.9 million (about U.S. $64.5 million). Consolidated operating profit improved 239.6 percent to € 46.7 million (about U.S. $60.4 million). The company cited strong demand, higher rental rates and higher utilization as contributing to the strong results.
The company’s first quarter acquisition of Cramo Holding Group, with locations in eight countries, contributed to the overall revenue growth.
With its new corporate structure, RK completed its new strategy in August. RK officials said the company’s ambition is to become one of the three largest rental companies in Europe.