Ramirent, one of Europe’s largest rental companies, is eliminating 600 position in response to what it expects will be rapid deceleration in 2009 construction volumes. The company said the workforce reduction will save it €50 million (about U.S. $71.4 million) on an annual basis.
Ramirent said it has a minimum need for investments in fleet capacity in 2009, and added that it has contingency plans to address the risk of further market decline. Still the company remains bullish about the long-term potential in the rental business.
“The equipment rental business is structurally attractive in the long term,” said Ramirent CEO Kari Kallio. “While Ramirent will continue to execute its long-term growth strategy, the company is prepared to weather this downturn with its strong balance sheet and solid cash generation. Measures to streamline cost structure and a minimum need for investments in fleet capacity will safeguard cash flow and improve our competitiveness. We will focus on re-allocation of our modern fleet capacity to optimize utilization and defend price levels.”
The actions will result in restructuring costs of about EUR 25 million (about U.S. 35.7 million) in the fourth quarter.
Ramirent’s full-year 2008 guidance remains the same. The company expects net sales growth to continue and profit before taxes and earnings per share to be below 2007 levels. Kallio will be stepping down as CEO at the end of this year and will be replaced by Magnus Rosen, a former executive of competitor Cramo.Ramirent is based in Vantaa, Finland, and has 361 branches in 13 countries. It has a workforce of about 4,000 employees.