Wacker Neuson cautious despite healthy Q2 results

Compact equipment manufacturer Wacker Neuson has revised its forecast for 2016 – despite second quarter revenues close to last year’s record total.

The new forecast is for revenue between €1.375 billion and €1.425 billion ($1.532 billion and $1.587 billion), a drop of €25 million from the previous figure.

The company said this was due to “increased market uncertainties and volatility” expected in the second half of the year.

Group revenue for the second quarter of 2016 was €381.4 million (US$424.9 million), compared to €382.1 million ($425.7 million) in 2015. The figure represented an increase of more than 20% on the €316.4 million ($352.5 million) posted in the first quarter of this year.

“We have every reason to be satisfied with our performance in the second quarter of 2016,” said CEO Cem Peksaglam.

“This is 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 United Kingdom, South Africa, Poland, Russia and Turkey, coupled with the difficult situation in South America and Australia.

“These challenging market conditions are having a significant impact on our customers across the globe and require exceptional initiative and flexibility from us,” he added.

“High volatility and growing uncertainties in the agriculture and construction business, increased risks in some European markets and the persistent market weaknesses in North America and Australia have forced us to lower our expectations for the second half.“

Geographically, the company increased revenue in Europe, where it does most of its business, by 6%, while revenue in the Americas and Asia-Pacific regions fell by 14 and 31% against 2015 levels.

Just over half of the total of €697.8 million ($777.3 million) revenue earned in the first half of 2016 came from compact equipment, 29% from light equipment and 19% from services.

Earnings before interest and tax remained almost unchanged from the previous year at €33.4 million ($37.2 million).

The group has earmarked around €100 million ($111 million) in for investments throughout 2016, compared to €118 million ($131.5 million) in 2015.

In June, it signed agreements to build a production facility in the Chinese city of Pinghu, around 30 km (18 miles) from Shanghai. Compact excavators will be manufactured for the local market from 2018 onwards.