GAM reports dramatic 2012 revenue fall in Spain

GAM Alquiler in Spain reported a 31% drop in revenues in 2012 to €140 million and a halving of its losses to €61 million.

The drop in sales was primarily the result of lower demand in Spain, with sales down 41% to €86.7 million. Its international sales, excluding Portugal, rose by 13% to €41 million, representing almost 30% of all revenues. Sales in Portugal fell 29% to €12 million.

Recurring EBITDA profits were €35 million, and improvement over 2011 and reflecting continued cost cutting in Spain.

Although losses for the year were very high, GAM said €57 million of these occurred in the first half, with second half losses limited to €4 million. The first half of the year saw the company book a €24 million goodwill impairment charge – goodwill in Spain is now valued at zero.

The business continued to reduce its debts, which now stand at €307 million (excluding a further €57 million of equity loans), down €81 million from last year. This compares to €611 million at the peak in 2008.

GAM said it was continuing with its internationalisation strategy, with rental activities in Latin America, Eastern Europe (Poland, Romania, Hungary) and the Middle East/North Africa (Morocco and Saudi Arabia). The company said it had “expectations of further growth in these markets, primarily in Latin America”.

The results underscore the extreme difficulties that rental companies in Spain are facing, with construction activity down severely. In addition to its move to external markets, GAM is also trying to diversify its business beyond construction in Spain, targeting work in industry, wind farm maintenance and other sectors.