During the third quarter, markets were seen stabilising, and there were some early signs of recovery. However, because of the cyclical nature of the construction industry and low investment levels in industry, Cramo expects the Group’s economic operating environment to continue on a low level towards year end. Government actions to stimulate economic recovery in the various sectors of construction – particularly in civil engineering – will balance some of the recessionary effects. In the modular space business, long-term agreements will moderate the cyclical fluctuations in Cramo’s operations.
Having completed major restructurings, certain cost cuts will still continue. The reduction in headcount will be approximately 30 per cent in 2009, compared with August 2008. Other actions aim at an efficiency increase and better rental equipment fleet utilisation rates. The adjustments are expected to generate cost savings of approximately EUR 35 million in 2009. Y-o-y, in 2010, the cost burden will be reduced by approximately EUR 50 million.
The demand for equipment rental services might continue to decrease in many markets in the first half of 2010. Recent reports on signs of early recovery and increasing residential construction, support a forecast according to which the demand for equipment rental services might see an upswing in the second half of 2010. However, there are still significant uncertainties associated with 2010 forecasts.
The Group’s gross capital expenditure in 2009 will be approximately EUR 30–35 million and mainly allocated to the purchase of modular space. In 2009, fleet management activities have focused on optimising equipment utilisation between Cramo’s market areas and the disposal of obsolete equipment. The Group anticipates the low level of investments to continue also in 2010.
The weakening of several European currencies against the euro will have a negative effect on Cramo Group’s 2009 figures compared to last year.
The Group’s cash flow after investments will be positive in 2009. We expect H2/09 EBITA to improve over H1/09 EBITA.