Palfinger Says Slowdown Won’t Match Severity of 2009 Drop
Palfinger AG (PAL), the world’s biggest maker of truck-mounted cranes, said there’s no imminent risk of a global economic crisis as severe as two years ago because industries aren’t operating at the same “overheated” rate.
“We notice that of course there is rising uncertainty” that has made customers unwilling to invest in equipment, Chief Executive Officer Herbert Ortner told journalists in Vienna. “But a collapse like after 2008 isn’t even possible now, because we aren’t on such an overheated level as we were.”
Palfinger, which sells mainly to builders and freight- transport companies, is forecasting revenue growth in the second half of the year to be slower than the 39 percent posted in the first six months, Ortner said. The Salzburg, Austria-based manufacturer still expects at least 20 percent sales growth for the full year.
The company competes with Demag Cranes AG (D9C) of Germany and Cargotec Oyj (CGCBV) and Konecranes Oyj (KCR1V) of Finland. Revenue has rebounded as the global economy has recovered. Second-quarter sales were 222.7 million euros ($320 million), beating a three- year-old record by 3.8 percent and marking a 90 percent surge from the fourth quarter of 2009.
Palfinger declined 5.1 percent to 18.8 euros at the 5:30 p.m. close of trading in Vienna, erasing earlier gains of as much as 11 percent.
Expanding in China is now a top priority for management, and the company is already in “advanced” talks with “a handful” of large Chinese building-equipment manufacturers about starting a joint venture to make truck-mounted cranes in that country, Ortner said.
“If we want to remain market leader, we have to go to China,” Ortner said. “I’m confident we’ll take an interesting step there.” It isn’t possible to say yet if there could be a deal this year, he said, declining to identify the companies he is in talks with.
Among China’s biggest construction equipment makers are Guangxi Liugong Machinery (000528) Co., Lonking Holdings Ltd. (3339), Sany Heavy Industry Co., Shantui Construction Machinery Co. and Anhui Heli Co., according to data compiled by Bloomberg. Palfinger competitor Cargotec announced plans last month for a joint venture with Jiangsu Rainbow Heavy Industries Co. to manufacture cargo cranes in China.
Second-quarter net income jumped 55 percent to 10 million euros, helped by acquisitions and growth in deliveries, Palfinger said.
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