Finland-based international rental giant Cramo posted a 7.2-percent revenue decline in the first quarter, with €148.5 million (about U.S. $194.8 million) compared to €160 million for the first quarter of 2012. EBITA dropped from €6.9 million in the year-ago quarter to €6.4 million. Sales were weakened by the divestment of Cramo’s modular space production and customized space rental businesses in Finland in March 2012, as well as by the transfer of the company’s Russian operations to a joint venture on March 1, 2012.
Also, the weak economic situation that has prevailed in Europe for a long time has affected construction activity and demand for rental services in many of Cramo’s operating countries. Revenue was also impaired by prolonged winter weather, which postponed the start of many construction projects.
Cramo sees the economic uncertainty continuing, with investment decisions being postponed. The company expects the market to grow in Denmark, Norway, Germany, Russia and the Baltic region, but expects declines or flat conditions in Finland, Sweden and Poland. The company expects the economic conditions to improve in its main markets towards the end of 2013.
“Our top-line development did not meet our expectations,” said president and CEO of Cramo Vesa Koivula. “Although our performance varies by country, a 7.2-percent decline in sales puts a pressure on the organization. Therefore the management initiated a program to better align our cost structure with the market conditions. As a result, we managed to keep our comparable EBITA margin almost intact.
“One of the most significant events during the first months of the year was the launch of Fortrent, our joint venture with Ramirent in Russia and Ukraine. By combining the resources of two companies with extensive experience of operating in Russia, we now have achieved a better leverage and an opportunity to gain a leading position in equipment rental in the growing Russian market. The partnership with Ramirent increases the growth opportunities for Fortrent while balancing the risks involved. There is a good market for rental business in Russia.”
Based in Vantaa, near Helsinki, Finland, Cramo is active in 15 European countries.
