Due to the cyclicality of the construction industry and low investment levels in industry, Cramo Group’s economic operating environment is expected to continue weakening towards year end. The Group expects construction to decrease in almost all of Cramo’s market areas. Public sector investments into various construction sectors, in particular into civil engineering, will balance some of the recessionary effects. In the modular space product area, long agreements even out the cyclical fluctuations in Cramo’s operations.
The Group continues its consistent cost adjustments in order to ensure profitability and cash flow in all situations. Further actions will be taken in the second half of 2009. Total headcount will go down by some 30 per cent (FTEs) in 2009 compared to August 2008. Other actions aim at an overall efficiency increase and a better rental equipment fleet utilisation. The objective of the actions is to generate approximately EUR 35 million in cost savings in 2009. This means that on a yearly level, from year 2010 onwards, the cost burden will be reduced by approximately EUR 50 million.
Due to investments made in recent years there is no need for new investments in 2009. The Group’s gross capital expenditure in 2009 will be approximately EUR 30 million and mainly allocated to the purchase of modular space.
Demand fluctuations and the timing of non-recurring expenses from economic measures will increase the volatility of quarterly results in 2009. Weakening of several European currencies against the euro, the Swedish krona in particular, will have a negative effect on Cramo Group’s figures compared to last year.
The Group’s cash flow after investments will be positive. Earnings per share is expected to improve in the second half of the year, but to remain negative for the full year.