Continued growth for Palfinger
By Euan Youdale19 May 2011
Palfinger has continued the positive trend of previous quarters with its latest financial results.
In its first quarter results for 2011, the group reported a revenue increase of 48%, or €191.6 million, compared to the first quarter of 2010. Acquisitions carried out in Europe and North America in 2010 - Palfinger Marine, Ned-Deck Marine and ETI - contributed about 25% of the revenue growth.
"Demand continued to rise, and the measures implemented in previous years started to bite. We are well prepared to face volatile markets in particular because we have reduced costs and capital employed. This is how we intend to ensure sustainable and profitable growth both now and in the future," said Herbert Ortner, CEO of Palfinger AG.
In the first three months of 2011, EBIT was €14.2 million, equivalent to a quadrupling of the earnings recorded in the first quarter of 2010. This substantial improvement was achieved primarily by significantly higher utilization rates in all areas, as well as through productivity in the company's facilities.
"The Group's performance in Europe reflected growth in demand, although some markets remained weak. Development of demand was also positive in all product areas in North America compared to the first quarter of 2010. Palfinger expects the upward trend in South America to be reinforced due to the upcoming investments in infrastructure," said a company spokesman.
"The sharp increase in revenue recorded in Asia demonstrates that these markets are gaining in importance, although they still only contribute a small share of Palfinger's business. With production sites in China, Vietnam and, since the end of 2010, also in India, the Group is well equipped for further growth. The tragic events in Japan have not directly impacted the business performance of the company in any way," added the spokesman.
The increase in inventories resulting from higher revenue saw a reduction in cash flows from operating activities, from €9.3 million in the first quarter of 2010 to €3 million.
Despite large gains in revenue, net working capital remained virtually stable at €115.0 million as of 31 March 2011. Fortunately, said the company, capital employed was virtually unchanged as well, amounting to €492.8 million.
In the future, the company will further develop its presence in the growth markets of Russia and China, it said, as well as concentrating on product and research and development expansion.
"On the basis of the current economic environment, it is estimated that organic revenue growth will exceed 20%. The expected additional capacity utilization coupled with the positive effects of cost optimisation projects point to a significant rise in earnings. In addition, the areas of North and South America and the access platforms business are expected to make more substantial contributions to earnings, which were still at a low level in the first quarter 2011," concluded the spokesman.