Terex growth driven by AWP division
By Murray Pollok27 October 2011
Terex's aerial work platform division posted a 58.9% increase in sales to US$448.7 million for the third quarter of 2011, driven by replacement sales to large North American rental companies and "steady" increases in sales to customers in Europe and the Middle East. Operating profits almost doubled to $27 million.
The company said it remained confident of overall growth through 2012, led by the AWP business, mainly in North America, and said it was encouraged by "earlier than normal conversations" with customers about investment plans for next year.
The AWP division, which has doubled its backlog to $551 million compared to a year ago, reported lower than anticipated sales to independent rental companies in North America, although they have started to increase their spending. The division has recently announced price increases averaging 4.5%, taking effect in January 2012.
The Construction division, whose products include excavators, skid steers, backhoe loaders and dump trucks, saw sales rise by 38.9% to $395.4 million, with strong demand for backhoe loaders in Russia, compact equipment in central Europe and trucks in developing markets including Russia and South Africa.
The division made an operating loss of $6.4 million in the quarter compared to $7.7 million in the previous year.
Terex said slow demand for roadbuilding products in North America continued because of weak highway infrastructure spending, while in Brazil the tightening in government sponsored financing programmes continued to constrain roadbuilding demand.
Overall, including Terex's Cranes, and Material Handling & Port Solutions and Materials Processing, sales rose by 67.7% to $1803.6 million in the third quarter. Excluding the impact of the acquisition of Demag Cranes AG, net sales increased approximately 44%.
"Overall, our performance continues to improve in terms of net sales and operating profitability, even during this economically uncertain time," said Ron DeFeo, Terex's chairman and chief executive officer.
"We continue to see end-market demand recover in our Aerial Work Platforms (AWP) business. We are optimistic about the rest of the year and 2012 for AWP as we are having earlier than normal conversations with customers who have indicated a willingness and need to purchase more equipment.
"Our longer term outlook is for continued growth in many of our key product categories and end markets. While we are mindful of the continuing economic uncertainty, we continue to believe that the overall market conditions support growth led by our AWP business, mainly in North America, and our Port Equipment business globally."