Positive first quarter for Terex
By Euan Youdale30 April 2021
Sales at Terex Corp stood at $864.2 million for the first quarter of its 2021 financial year, a 3.7% increase on the $833.6 million achieved in the same period in 2020.
Total income from operations saw a steep rise, totalling $61.5 million for the three months that ended 31 March, compared to the -$7.1 million drop the company had reported in the same period in 2020.
John L. Garrison, Terex chairman and CEO, said, “Our first quarter results reflect a strong start to the year, as the global markets recover from the pandemic. I am proud of our team members as they continue to overcome the disruptions caused by Covid-19 and deliver improved performance.”
However, net sales in Terex’s AWP segment dropped 6.8% in the quarter to $476.7 million, from the $511.7 million reported in the first quarter of 2020. Income from operations, on the other hand, improved considerably in the quarter, from -$5.9 million in 2020 to $26.6 million in 2021.
The Materials Processing division also experienced a positive Q1, with a 19.8% increase in sales revenue to $378.2 million, up from the $315.6 million reported in the first quarter of 2020. Its income from operations stood at $49.1 million for the quarter, up from $25 million.
“AWP continues to improve its execution and operating margins, while meeting strong customer demand. MP had another excellent quarter with strong performance across its portfolio of businesses,” said Garrison.
“Our portfolio of specialised machinery businesses will benefit from the global economic expansion,” Garrison added. “We are committed to aggressively implementing our Execute, Innovate and Grow strategy to improve margins and grow Terex.”
Due to improved market conditions, Terex has increased its full-year outlook for sales to approximately $3.7 billion. John Sheehan, senior vice president and CFO, said, “Through aggressive working capital management, we generated $40 million of free cash flow in the quarter. Our strong financial results and liquidity enabled us to prepay $196 million of term loans. We will continue to use our liquidity to fund future growth opportunities, such as the recent announcement of our new Monterrey, Mexico AWP facility.”
Sheehan added that it had taken advantage of low interest rates and refinanced a large amount of its capital investment, including a revolving credit facility and $600 million of bonds. “Our strong cash flow generation positioned us to obtain lower interest rates and extend debt maturities to the end of the decade.”