PALFINGER is optimistic about the year ahead

Austrian equipment maker PALFINGER is optimistic about the year ahead, going into the current financial reporting season with a strong order backlog from the end of 2017.

Due to short-term internal and external delivery problems, a significant order volume could not be completed by the end of 2017 and had to be postponed until 2018, according to the company's latest financial statement. Capacity utilisation of the production plants is expected to remain at a high level.

In 2017, the PALFINGER Group continued its growth despite comprehensive restructuring measures. At EUR1.4711 billion (USD1.82 billion), revenue reached a new high in the company's history for the seventh time in succession. The 8.4% increase in revenue was primarily due to the favourable situation of the construction industry in Europe.

"2017 was a year of consolidation," according to board members Felix Strohbichler and Martin Zehnder. "Having made the largest acquisition in its history in 2016 (Harding Group), the company took comprehensive measures, primarily in North America and in the marine business, to facilitate further profitable growth. However, additional measures are required, especially in the SEA segment, in order to be able to profit from a future upswing. In 2017, we also set the course for the future by establishing our new vision and strategy," commented the two, summarising the most noteworthy developments of 2017.

Revenue growth in the Land segment was achieved primarily in Europe, augmented by the acquisition of the Danish distribution partner Palfinger Danmark AS.

The economic recovery in Europe continued to be felt in the EMEA region in 2017. Particularly in construction and infrastructure, PALFINGER benefited from replacement investments, which had been suspended in recent years. Performance was particularly noteworthy in the core markets and in Southern Europe, where the markets had recently been weak, and, in terms of products, once again in the crane business.

The restructuring in North America brought material success. In addition to making adaptations to its internal organisation, PALFINGER sold its service body business in the first quarter of 2017. The revision of the existing product portfolio is progressing; one major newly developed product was about to be launched on the market at year end. Provided that the demand for loader cranes continues to be satisfactory, profitability in North America is expected to grow in 2018; and the restructuring measures are expected to be completed in the first half of 2018.

In South America, PALFINGER continued to operate in a highly difficult market environment, but it seems that the downturn has bottomed out.

In Asia, particularly in China, the partnership with SANY is the foundation for the sound development of business. The Sany Palfinger joint venture recorded significant increases in revenue during the reporting period. In Russia/CIS, the economic environment remained a challenging one, but local value creation continued to prove highly advantageous, facilitating additional growth.

Even though the conditions predicted for 2018 harbour a great deal of uncertainty, management predicts that revenue in the 2018 financial year will reach a new record high. It is anticipated that the restructuring measures in North America will be completed in the first half of 2018 and further measures in the marine business will follow. The changes already made in 2017, as well as additional changes, are expected to facilitate an extraordinarily high increase in earnings and, thus, also a record result, according to the company.