Demag sees slow recovery

Demag Cranes, owner of the Gottwald Port Technology brand, has reported a "stabilising trend" but continued "weak demand" in its first quarter 2009-10 financial year results.

Order intake in the Port Technology segment decreased by 24.8% compared with the same period in the previous year from €40.5m to €30.4m. The order book at 31 December 2009 totalled €62.0m, compared to €97.6m at 31 December 2008.

"Due to the postponement of contract awards for large port projects and our key customers continuing to hold back on investments, order intake did not – in contrast with the first quarter of 2008-09 – include any business with our AGV Automated Guided Vehicles [pictured] and ASC Automated Stacking Cranes automated products," the company said in a statement.

Revenue in the Port Technology segment was €37.9m, down from €64.3m in the first quarter of 2008-09. The company pointed out that the segment was hit especially hard by the adverse effects of the global economic crisis because it does considerably more project work than the other two segments.

Sales of mobile harbour cranes generated most of the revenue while business relating to solutions for integrated systems – such as those involving automated products – practically came to a standstill.

Operating Ebit in the Port Technology segment fell from €1.6m in the first quarter of 2008-09 to a negative €2.6m in the period under review.

"The main reason for the drop in operating Ebit compared with the same period of the previous year was diminished revenue due to the difficult business situation in the international container and bulk handling business and the economic problems of terminal operators," the company said. "Compared with the fourth quarter of 2008-09, operating Ebit increased slightly in the period under review despite lower revenue. This shows the positive impact of the restructuring programme beginning to take hold."

Demag Cranes’ board predicted revenue in financial year 2009-10 will be down on the previous year while the full-year group operating Ebit margin is expected, again, to be in the mid single-digit range.

Aloysius Rauen, Demag Cranes CEO, added: With the Group integration and restructuring measures we have initiated, we will increase efficiency throughout the Group and improve our ability to compete on the market."