Compact equipment maker reports 28% rise in profitability on total revenues of over $900m, a record high for H1 results
German light and compact equipment manufacturer Wacker Neuson has reported an 8% rise in revenue in the first half of this year, with the figures touching $939.3 million compared to $869.9 million in the same period of 2017.
Adjusted for currency effects, this corresponds to an increase of 12% and the company says the figures are a record high for half yearly results. Attributing the growth primarily to continued high levels of demand in the construction market, Wacker Neuson also said it was result of strong performance in the European agricultural sector.
The strong results have also led to significant rise in profitability, with EBIT (earnings before interest and tax) improving 28% to $89m, compared to $69.6m in the first half of last year. The EBIT margin stood at 9.5%, up 8% year-on-year.
The increase in profitability was attributed by the manufacturer to a combination of rising revenue, strict cost control measures and improvements to internal processes. Among the downsides were the price of materials and material bottlenecks among suppliers, which disrupted workflow at production facilities.
In Europe, the company’s largest sales market, revenue for H1 2018 went up by 8% to $682.2 million, compared to $633.1 million in the same period last year.
“Our strong performance in this region was fuelled by a buoyant construction market, positive development of our Kramer and Weidemann brands in the agricultural sector and growth in our services segment, which includes our maintenance and spare parts business,” said Martin Lehner, CEO, Wacker Neuson.
Revenues rose 9% in the Americas, which was actually a 21% increase when adjusted for currency effects, showing the impact of the weak US dollar. The company said that high investment activity among rental chains in North America and strong sales of compact equipment had a positive effect on business.
Wacker Neuson’s revenue also grew in the Asia-Pacific region, expanding 4% to $27.4m. The company added that it has now begun production at its new factory in Pinghu, China. The company’s results were also helped by the sale of a real-estate company held by the group, which generated a profit before tax of $6.1m.
In light of the positive results, Wacker Neuson confirmed its guidance for the fiscal year 2018. Lehner said: “Due to the current healthy situation on international construction and agricultural markets, our most important target markets are intact and our order books are well filled.”