Construction and truck equipment dealer Ferronordic increased revenue in the second quarter despite a decline in overall sales due to the company’s recent acquisition of a U.S. equipment dealer.
Stockholm-based Ferronordic distributes Volvo Construction Equipment and Hitachi, Sandvik and Link-Belt lifts at 13 locations across nine states after acquiring Clearfield, Pa.-based Rudd Equipment for $95 million in November 2023.
While Ferronordic acknowledged a decline in the U.S. market to begin the year, the company had a strong quarter across its segments, Chief Executive Lars Corneliusson said on today’s earnings call.
“We saw the market in the U.S. [during] the first five months was going down slightly from a very high base in 2023,” he said. “We, however, delivered more machines to customers, and then we gained quite some market share, and as we saw the construction season started during the quarter, also we saw utilization of the rental fleet improving and demand for aftermarket increasing.”
Ferronordic’s used-equipment sales totaled 112 units in the second quarter, despite declining in Germany and Central Asia, Corneliusson said. The decline in Germany’s used-equipment sales improved compared with the first quarter, as the company implemented an efficiency program in the region.
“Used-vehicle sales performed better,” he said. “We are continuing to decrease our used-trucks inventory and rental fleet to reduce capital commitment and focus on how these operations can support new sales and the aftermarket business.”
U.S. operations represent 65% of Ferronordic’s total revenue, up 5% quarter over quarter, according to the company’s earnings presentation.
By the numbers
For the quarter ended June 30, construction equipment and truck sales revenue rose 16.7% year over year, according to the earnings presentation.
The presentation reported:
- U.S. equipment and truck sales landed at 356 million krona ($33.8 million);
- German equipment and truck sales finished at $16.3 million, down 59.8% YoY;
- Central Asian equipment and truck sales totaled $4.4 million, down 32.4% YoY;
- U.S. new unit sales reached 70;
- German unit sales ended at 101, down 64.1% YoY;
- Central Asian unit sales landed at 11, down 35.3% YoY;
- U.S. segment revenue closed at $67.1 million;
- German segment revenue reached $31.5 million, down 44.2% YoY;
- Central Asian segment revenue totaled $5.3 million, down 30% YoY; and
- Total revenue was $103.9 million, up 62.5% YoY.
With U.S. operations representing the company’s largest and strongest performing segment, Ferronordic sees the potential for more dealership consolidation in the industry and the possibility for more expansion itself, Corneliusson said.
“The last couple of years, there’s been a consolidation in the markets, and one of the reasons why we are there is because we’re part of that consolidation,” he said. “That’s why it makes the U.S. interesting. It is a consolidation that we believe will continue, and that’s why we see future opportunities in continued expansion.”
Shares of Ferronordic [STO: FNM] were trading at $72.00 as of market close, down 30 cents or 0.41%, from market open. The company has a market capitalization of $99.6 million.
Editor’s note: All amounts have been converted to U.S. dollars.
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