Wacker Neuson posted second quarter group revenue of €381.4 million (about U.S. $422.9 million), which almost equaled the record second quarter revenue it reported last year, which was €382.1 million. Adjusted to discount currency effect, the revenue corresponds to a 2-percent increase. Second quarter revenue grew 21 percent compared to the first quarter, which totaled €316.4 million.
Earnings before interest and tax remained almost unchanged from last year’s second quarter at €33.4 million compared to €34 million in the year-ago quarter. The EBIT margin was 8.8 percent, compared to 8.9 percent a year ago. Profit was significantly higher than the first quarter of 2016, when the EBIT margin was 5.5 percent.
“We have every reason to be satisfied with our performance in the second quarter of 2016 in light of the ongoing crises in the agricultural and energy sectors in our home markets of North America and Europe, as well as increasing uncertainty in the U.K., South Africa, Poland, Russia and Turkey, coupled with the difficult situation in South America and Australia,” said Cem Peksaglam, CEO of Wacker Neuson. “The group generates a large share of its revenue in Europe. Here, revenue for the second quarter rose 6 percent compared with the previous year. Revenue in the Americas and Asia-Pacific regions fell by 14 and 31 percent respectively compared with the previous year.”
For the first six months of the year, group revenue totaled €697.8 million, compared to €706.4 million in the same period in 2015, a 1.2-percent drop. Performance varied significantly in the different business segments. The compact equipment segment comprised 52 percent of group revenue, the same level as the first six months of 2015. Light equipment revenue slipped 5 percent to account for 29 percent of group revenue, while service segment revenues increased 3 percent to account for 19 percent of revenue.
During the first half of 2016, Wacker Neuson opened its assembly plant in Itatiba, Sao Paulo, Brazil, where the facility is manufacturing mobile generators for the regional market. In June Wacker Neuson signed agreements for the construction of a new production facility in Pinghu, China, about 30 kilometers from Shanghai. The company will manufacture compact excavators for the local market beginning in 2018.
The executive board of Wacker Neuson lowered its forecast for the full year, now expecting revenue between €1,375 million and €1,425 million, down from the previously forecasted range of €1,400 million to €1,450 million, as a result of recent political and economic events.
“These challenging market conditions are having a significant impact on our customers across the globe and require exceptional initiative and flexibility from us,” said Peksaglam. “High volatility and growing uncertainties in the ag and construction business, increased risks in some European markets and the persistent market weaknesses in North America and Australia, forced us to lower our expectations for the second half.”