Tough 2014 for Cramo

Finnish rental company Cramo reported a 62.3% year-on-year drop in profit for 2014 to €16 million on revenues of €652 million, down 0.8% compared to2013.

The company said economic conditions in Europe had impacted the result during the year, but improvements were seen in the fourth quarter.

Indeed, for the final three months of the year revenues increased 3.1% to €181 million, but the company reported a loss of €7.5 million, compared to profit of €16.3 million for the same quarter in 2013.

The fourth quarter was hit by one-off costs totalling €23.6 million, the bulk of which were related to Central Europe.

CEO Vesa Koivula said, “Economic development was weaker than expected in Europe in 2014, which slowed down construction in many locations and also affected demand for equipment rental services.

“However, public sector demand for the modular space business remained stable. Our sales performance actions and the more favourable market conditions improved our sales towards the end of the year. Fourth quarter sales grew in local currencies by 6.1%, as the market situation strengthened particularly in Sweden.

“Our result improved towards the end of the year due to performance improvement actions. During the year, we cut down fixed costs and improved operational efficiency.

Central Europe

“The improvement efforts and investments completed in our Central European operations provide a good platform going forward. However, there is still room for significant improvement in fleet utilisation rates and it will take time before we reach a good level of profitability in Central Europe.

“Although the first half of the year was challenging for Cramo, I am reasonably satisfied with our performance in the second half of 2014. In the fourth quarter, our result before non-recurring items improved year-on-year.

“I am particularly satisfied with the clear improvement of profitability in Sweden during the last quarter of the year, the good performance in Finland in 2014 as well as the profitable growth and expansion to new markets achieved in the modular space business. Modular space sales increased by 14.4% in 2014.”

Looking ahead to 2015, the company said there were economic and political uncertainties in its markets. It said it expected sales to grow in local currencies, and the earnings before interest, tax and amortisation (EBITA) margin to improve in 2015 compared to 2014.