Good growth for Palfinger
By Euan Youdale30 October 2018
The Palfinger Group continued to record growth in the first three quarters of 2018, primarily a result of a good performance in Europe, North America and Russia. Restructuring measures in North America and in the marine business continued to have a detrimental effect on earnings, said the company; however, in North America all relevant one-time effects were recorded in the first half of 2018.
“The level of incoming orders was again higher than in the previous year and clearly surpassed our expectations. We are also satisfied with the earnings generated to date: Despite the ongoing restructuring, operating profitability has almost reached the 10% threshold. At present, we are not seeing any slowdown in demand,” commented Andreas Klauser, CEO of Palfinger.
In the first three quarters of 2018, Palfinger Group’s revenue increased by 8.2% from €1,093.1 million to €1,182.6 million. EBITDAn (EBITDA normalized by restructuring costs) went up from EUR 147.6 million to EUR 157.1 million. EBITn grew from €105.3 million to €116.4 million, and the EBITn margin rose from 9.6% in the previous year to 9.8%.
In recent months, the Austrian Financial Reporting Enforcement Panel (AFREP) notified Palfinger an impairment of the goodwill of the Marine segment of the business was required. The management board estimates the extent of the restatement may amount to half of the €156.5 million goodwill recorded, as at 31 December 2017. The impairment will substantially reduce the group’s equity and will lead to a retrospective reduction of the 2017 results.
In October it was agreed for Sany to repurchase shares held by Palfinger in Sany Lifting Solutions. Palfinger acquired 10% in Sany Lifting Solutions in 2014, of which 2.5% will now be repurchased by Sany. This corresponds to a funds inflow of €28.6 million for Palfinger. Following this transaction, Palfinger will have a 7.5% shareholding in Sany Lifting Solutions, and Sany will continue to hold 7.5% of Palfinger’s shares.
In the first three quarters of 2018, revenue in the LAND segment increased by 11.9% year-on-year from €908.8 million to €1,017.3 million. The segment’s normalised EBITDA (EBITDAn) rose from €153.8 million to €168.6 million, an increase of 9.6. Restructuring costs allocated to this segment amounted to €6 million in the reporting period, compared to €8.9 million in the first three quarters of 2017.
In the EMEA business area, the company again recorded higher orders than in the previous year. The bottlenecks which had existed since the end of 2017 were alleviated in the third quarter
In the first three quarters of 2018, the Sea segment generated revenue of €165.3 million, a decline of 10.3% from the previous year’s figure of €184.3 million. It reflects an extremely difficult business environment, said the company. The segment’s normalized EBITDA (EBITDAn) decreased year-on-year from €5.8 million to €4 million.
In September 2018, Palfinger began implementing its new organisational structure, the Global Palfinger Organization (GPO) to reduce the complexity of the Group, which has grown in size considerably. Existing group-wide initiatives will be consolidated and additional ones developed. The
The increase in orders indicates that for the remaining 2018 financial year business performance will continue to be satisfactory overall, said the company. Moreover, the remaining backlog is expected to be, for the most part, resolved by the end of 2018.