Essex expects more infrastructure and energy work

22 August 2012 by Johanna Fragano

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Illinois-based Essex, an American crane rental firm, reported its Q2 2012 results, with equipment sales of $8.6m representing a continued increase, rising 61.4% over the same figure for the period last year.


The company said it had sold non-core assets such as aerial work platforms and forklifts that were acquired as part of the 2010 acquisition of Coast Crane Company, and the sales were used to reduce debt.

It reported equipment rental revenue increase of 21.7% to $27.2m, rising rental rates, and increased utilization of its most costly equipment, like crawlers, rough terrains and tower cranes.

The rough terrain segment was most heavily utilized. Utilization of rough terrain cranes sprang 67.6% in the second quarter of 2012, compared to 54.8% for the first quarter of 2012.


Excluding the impact of the levee project that was active in 2011, utilization of crawler cranes increased to 39.4% in Q2 2012, compared to 34.8% for the comparable quarter in 2011.


Of all of its segments including lattice-boom crawler cranes, truck cranes and rough terrain cranes, self-erecting cranes, tower cranes, elevators and hoists, it noted that crawler crane rental rates had increased by $808 or 5.0% to $17,041 over their rates in the previous quarter.


Ron Schad, president and CEO of Essex said that operating improvements accounted for earnings increases:


"We are satisfied with the results achieved during the second quarter of 2012 and believe that the results represent a validation of our decision to broaden our equipment portfolio to include rough terrain cranes, boom trucks and tower cranes as well as add predictable business lines such as third party aftermarket parts and service sales.


"Much of the increase in earnings on both a sequential quarter and year over year basis is as a result of operating improvements that have been implemented over the last six months.


"Utilization in equipment categories that represent the majority of our OLV continues to improve gradually, albeit off a low base.


"Specifically, in the second quarter of 2012 we experienced sequential quarterly increases in utilization for crawler cranes, rough terrain cranes and large tower cranes, which are our three largest equipment types as measured by original equipment cost.


"Rental rates are trending higher across many of our primary equipment categories."


Schad predicted more infrastructure and energy-related work: "Demand for our equipment continues to improve, particularly for infrastructure and maintenance related energy projects.


"The expected duration of new crawler crane orders year to date through July has increased 15.5% compared to the prior year's orders."