Terex group revenues fall 10.5% in 2015 to $6.54bn
Terex cranes sales slide 6.7% and port and industrial crane sales fall 18%, with worse to come in 2016
Terex has reported revenues of $6.54bn for 2015 – a 10.5% decrease on the $7.31bn recorded in 2014.
The US-based equipment manufacturer's earnings before interest, taxes, depreciation and amortisation (EBITDA) fell from $630m in 2014 to $478m in 2015.
Sales were $1.67bn in 2015, down 6.7% on the $1.79bn in 2014.
While the group’s port and industrial crane division fared worse off, with sales of $1.46bn, down 18% from $1.78bn in 2014.
John Garrison, president and CEO, said: “Global economic volatility has made our customers more cautious overall, resulting in Q4 order activity that was below expectations in most business segments and product categories.
“On a positive note, free cash flow for the year came in at a strong $290m – nearly double our 2015 net income. Cash flow generation will be a primary focus going forward.”
Garrison predicted that the company’s net sales for 2016 will in turn be about 10% lower than 2015.
He said: “Looking ahead to 2016, we do not see market conditions improving. The oil and gas and commodity market decline will continue to impact demand across many of our products. We are developing and implementing plans to align our cost structure with these market realities.”
He also anticipated a trend of lower fleet replacement among Terex’s (Genie) aerial work platform rental customers in North America.
Terex entered 2016 planning for a merger with Konecranes to form a company with $2.5bn in assets, and some $10bn in combines global sales – but these plans were recently put on hold as after the company received an unsolicited $3.3bn acquisition bid from Chinese equipment giant Zoomlion.
While such a move could be rejected by US regulators, the significant offer (at a price of $30 a share) caused the value of Terex stock to jump up by 37% from roughly $15 a share to $20.5 a share.
The share prices of Manitowoc and Joy Global increased following the new, indicating market scepticism over the competitiveness of the deal, while shares in Konecranes and Zoomlion fell by 8.4% and 7%, repressively, over market fears over the prospective uncertainty for both parties.