The stock price of Helsinki, Finland-based Ramirent, which operates in 13 countries including the Scandinavian and Baltic countries, Russia and Urkaine, last week dropped 24 percent to €8.36 (about U.S. $12.93) after the company said meeting its earnings forecast would be a challenge. The company said that construction has slowed in Estonia, Latvia and Hungary.
Net income in the first quarter decreased to €$19.5 million (about U.S. $30.2 million), down from €20.1 million in the previous year’s first quarter. The company said provisions for bad debt and maintenance costs for aging equipment contributed to the decline. Analysts had predicted a profit of €22.1 million.
“Compared to the previous year, which was exceptionally strong, this year started off at a lower level,” said CEP Kari Kallio. “The financial turmoil has increased the uncertainty of the market development in many of our countries.” Kallio said Ramirent will shift equipment around to meet demand and postpone some new equipment investments.
Ramirent’s net sales grew 19 percent to €$162.1 million, beating expectations. Analysts had estimated €$156 million.
Ramirent has 340 branches.
CEO Kallio also informed the company’s board of directors he plans to retire in 2009.