Supply chain weighs on Manitou profits
29 July 2022
Manitou closed the first six months of its 2022 financial year with a 9% revenue rise to €1,057 million, compared to the same period last year.
However, the effects of supply chain issues and material pricing caused a drop in net income of 54% to €29.3 million, versus €64.2 million in the first half of 2021.
Earnings before interest, taxes, depreciation, and amortization (EBITDA) stand at €68.2 million for the first half of this year, compared to €109.6 million in same period last year.
At the end of the second quarter, the company’s order book stood at €3,554 million compared to €1,788 million in Q2 2021.
Michel Denis, Manitou’s CEO, said the growth in revenue came following an acceleration in production and deliveries, but that supply chain constraints had a major effect. “Our supply chain continues to be disrupted by capacity, availability and shipping problems, which continues to encourage our customers to secure their future supplies by taking orders at a consistently high level, which is reflected in our order book.”
“The sudden acceleration of inflation, particularly for steel, has led to a significant deterioration in margins. The measures put in place to deal with are having an effect, but gradually, given the depth of our order book.”
Looking at the results of the group’s different divisions, the Product Division reported revenues of €866 million, up 8% over six months compared to 2021, which had seen a strong rebound at +5%, at constant exchange rates.
However, this growth was slowed by supply chain tensions and the health crisis at the beginning of the year. To limit the effects of inflation, the group introduced adjustments to its sales prices upon delivery during in the first half of 2022. The company said, “These mechanisms will influence the valuation of the orderbook on equipment, which is booked and valued at the price on the day the order is placed.”
Recurring operating income for the Product division fell by €44.5 million in the first half of this year, or 66% to €22.8 million compared to a revenue if €67.4 million in the same sixth months in 2021.
With revenues of €191 million, the Services & Solutions Division (S&S) grew by 14% over six months, or 11% at constant exchange rates. The division benefited from very strong demand from its markets, enabling it to achieve a historic level of activity, said the company. Sales increased in all geographic regions, particularly in the Americas, and in all its markets. Recurring operating income was €22.9 million, up €5.4 million compared with the first half year of 2021.