The construction and equipment rental service markets are expected to recover gradually in Cramo’s market areas in 2010. According to market forecasts, construction activity will begin to increase in 2010 in Finland, Sweden and possibly also in Russia. In Poland, growth is expected to continue. The construction markets in Norway, Denmark, the Czech Republic and the Baltic countries are expected to decline further. The outlook for the Baltic countries has nevertheless improved.
After a weak winter and spring, the rental market saw a positive turn at the end of the second quarter. Demand is expected to improve and the Group’s profits will grow during the second half of the year. In addition, the implemented cost-saving measures will improve profitability.
Cramo made three long-term agreements in the second quarter, related to which customers outsourced their construction machine fleet to Cramo. Fleet outsourcings are expected to continue, i e, arrangements where Cramo takes over construction companies’ machine fleet while simultaneously signing a long-term rental agreement.
The Group’s gross capital expenditure, excluding acquisitions and business combinations, will be approximately EUR 40–50 million in 2010. The level of investments has been increased in the modular space business and in Sweden. With regard to fleet management activities, Cramo will continue to focus on optimising equipment utilisation between different market areas.
The Group has modified its guidance. The new guidance is: “The Group sees a gradual market improvement, however, uncertainty remains. Gearing to go down based on steady positive cash flow. EBITA margin to improve compared with 2009.”
The old guidance was: “Although the market in Q1 2010 was weak, the Group still sees a gradual market improvement. Uncertainty remains high. Gearing to go down based on steady positive cash flow. EBITA margin to improve compared with 2009.”