Austrian knuckle boom crane manufacturer Palfinger saw its 2002 operating profit fall 40%, with the German market proving particularly difficult..
Final results are not published until 24 March but Palfinger has taken the precaution of giving investors the bad news as soon as possible.
The company said that although sales were down, it was still able to invest in projects that will improve the efficiency of the company in the future. The RAP factory reorganisation project, designed to cut delivery times for truck cranes, was fully implemented in July. Inventory reductions made during the introduction of the project have been completed, and should cause a return to increased utilisation levels, the company said. Relocating production facilities and establishing a new service and demonstration centre are expected to cut costs by between eight and 10 million Euros from 2004.
In 2002, revenue fell 7.6% to Euro 306.8m. “This was mainly because of poor economic conditions, particularly in Germany, and because of the completion of inventory reductions,” the company explained. The Group’s projected operating earnings (EBIT) stood at Euro 23.0m, down from Euro 38.1m in 2001. “These figures reflect reduced production utilisation, the unfavourable exchange rate between the Euro and the US Dollar and a shift in product mix toward less profitable products,” said the company. The management expects a slight improvement in sales, earnings and margins for 2003.
The company’s shares fell 5.3% on the Vienna bourse on the back of the news and Raiffeisen Centrobank downgraded it to “neutral” from “buy”. Raiffeisen said the figures were significantly below its expectations.