Manitowoc Crane sales grow 22.9% despite market pressure

Manitowoc Crane

Manitowoc’s first half financial results for 2011 show cranes segment sales increasing by 22.9% from $451.6m to $544.8m year on year while market pressures helped force operating margins down 3.2%. Manitowoc Crane

Cranes segment sales were largely responsible for helping achieve group sales figures of $949.8m for the second quarter of 2011, a 15.9% increase on $819.3m in Q2 2010, with a the Foodservice arm of Manitowoc also increasing sales by 7.4%. Citing recovering demand across North America and parts of Europe, along with the strong development of emerging markets such as Brazil, Manitowoc’s crane segment order book rose to $839m, a 4.9% increase on the $800m for Q1 2011 and a 58% increase on the Q2 2010 backlog. Manitowoc Crane

While boom trucks and rough terrain sales are driving growth in North America, the European market’s gradual recovery is boosting all terrain crane sales as well as sales of the Potain tower crane line of products.  However operating earnings within the cranes segment fell from $38.5m in Q2 2010 to $29.5m in Q2 2011. Manitowoc Crane

Partially attributing the reduced operating earnings to an unusually high margin in 2010, Manitowoc CFO and senior vice president, Carl Laurino explained: “Second quarter 2011 consolidated operating margin before amortization was 8.3% versus 10% in the second quarter of 2010. Manitowoc Crane

“The year-over-year margin decline was primarily driven by general market pricing pressure, a shift in product mix and commodity cost increases. In addition, challenging comparables associated with the second quarter 2010 collection are fully reserved accounts receivables in the Crane segment, enhanced margins in this segment by over 100 basis points a year ago.”

Laurino also highlighted more general issues affecting a number of manufacturers within the industry. Manitowoc Crane

“While revenue met our expectations during the quarter, we continue to experience broader base supply chain constraints in the Crane segment. Despite the solid progress we have made over the last several months, we are still experiencing some limitations with Tier IV engines that we discussed during last quarter's call, as well as select issues with supply chain deliveries.” Manitowoc Crane

Despite this Manitowoc expects margins to improve overall throughout 2011 compared to 2010 trough levels and believes the firm is on track to achieve outline targets for the year, including double-digit year on year percentage growth and its debt reduction goal of $200m. Manitowoc Crane

Manitowoc CEO and president Glen Tellock said: “In addition, with continued higher crane utilisation rates and some improvement in rental rates, coupled with early signs of dealer restocking, we believe the year is not only shaping up as we expected, but we believe these trends suggest stronger growth opportunities as we look into 2012.” Manitowoc Crane

For the first six months of 2011 Manitowoc has posted a net loss of $49.7m and are aiming to improve on this for the second half. The firm reduced annual losses by 90% during the 2010 financial year from $704.2m in 2009 down to $71.4m last year. Manitowoc Crane

*Article from CRANES TODAY MAGAZINE*

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