Palfinger First-Quarter Revenue Up 8.9%
May 2, 2018- For the first quarter of 2018, Palfinger AG saw revenue reach EUR 394.2 million ($471.5 million), up 8.9% over the same period of 2017. That is a record high, says the company.
EBITDA grew by 6.2% to EUR 54.0 million ($64.6 million) and EBITN soared by 9.1% to EUR 39.9 million ($47.7 million).
In the reporting period, restructuring costs came to EUR 6.3 million ($7.5 million). However, due to the lower financial result, a higher tax rate, and the strong increase in earnings attributable to non-controlling shareholders, the consolidated net result was EUR 17.9 million ($21.4 million) in the first quarter of 2018, 7.7% lower than the previous year. Earnings per share amounted to EUR 0.48 ($0.57), compared to EUR 0.52 ($0.62) in the first quarter of 2017.
“The development of operating profitability shows us that we are on the right track to achieve and sustain our goals. From today’s perspective, not least due to our full order books, the financial year 2018 may well be another record year in terms of revenue and operating profitability,” commented Felix Strohbichler.
Performance by segment
In the first quarter of 2018, the LAND segment’s revenue increased by 13.6% year on year to EUR 337.8 million. The segment’s normalized EBITDA (EBITDAn) grew to EUR 58.4 million, corresponding to an increase of 13.0%. The EBITDAn margin of this segment thus decreased marginally from 17.4% to 17.3% in the first quarter of 2018. The restructuring costs allocated to this segment amounted to EUR 2.5 million in the reporting period, as compared to EUR 3.6 million in the first quarter of the previous year.
The growth achieved in the LAND segment was based on the significant expansion of business in the regions EMEA and Americas. In Europe, the acquisition of the Danish distribution partner Palfinger Danmark AS, which took place at the end of January 2017, generated positive momentum as well. In North America, Palfinger recorded pleasing increases in business in recent months. It is anticipated that the restructuring can be completed in the first half of 2018. In Asia, particularly in China, the good partnership with SANY has proved to be the foundation for continued business expansion. In Russia/CIS, local value creation facilitated additional growth in the first quarter of 2018, despite the challenging economic environment.
In the first quarter of 2018, the SEA segment’s revenue decreased to EUR 56.4 million, which corresponds to a decline of 12.7%. The contribution of the segment to Palfinger’s consolidated revenue thus shrank from 17.9% to 14.3%. The segment’s normalized EBITDA (EBITDAn) decreased from EUR 2.1 million in the first quarter of 2017 to EUR 0.9 million; the EBITDAn margin came to 1.6%, as compared to 3.3% in the first quarter of 2017. The restructuring costs incurred by this segment were EUR 3.7 million, as compared to EUR 1.2 million in the same period of the previous year.
The business environment of the SEA segment remained extremely challenging as a result of the strained situation of the oil and gas industry. There are signs of a slight stabilization of the market situation, but no substantial recovery is yet to be expected from today’s point of view. The restructuring of this segment will be intensively continued in 2018 and will probably only be completed in 2019.
Outlook
In the first quarter of 2018, the Palfinger Group again recorded an increase in incoming orders, which indicates that for the rest of the financial year 2018, business performance will continue to be satisfactory overall, albeit heterogeneous. It is expected that the restructuring measures in North America will be completed in the first half of 2018, and the ongoing restructuring measures in the marine business may continue to depress earnings in 2019. The management foresees new record levels of revenue and EBIT for 2018. The consolidated net result in 2018 is expected to approximate the successful results recorded in 2015 and 2016.
