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Thriving Manitou to beef up in North America

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Manitou revealed a drive to beef up in North America and northern Europe as the maker of farm and construction machinery underlined the threat of an "already pronounced" downturn in the farm sector.

The French-based maker of machinery such as telehandlers, particularly popular with livestock farmers for shifting feed and bales, and forklifts used in shifting produce such as potatoes unveiled a a jump to E14.2bn in earnings for the first half of 2014, from E1.06m a year before.

Revenues rose 8.6% to E641.9m, with operating profits tripling to E23.06m, ahead of market expectations for a figure of E20.0m.

The results reflected in part one-time factors, such as a weaker euro, which has fallen 4% so far in 2014 against the dollar, improving in euro terms the impact of foreign sales.

The group also highlighted a "decrease in overheads", with cost cutting efforts reducing administration expenses by 14.3% to E20.84m.

'Already pronounced slowdown'

The improvement comes despite difficult markets for agricultural machinery overall, a weakness which Manitou highlighted, along with weakness in broader equipment rental takings.

"We remain very attentive to market developments for the rental and agriculture markets, for the first because of its high volatility and for the second because of its already pronounced slowdown," said Michel Denis, the Manitou chief executive.

The dynamics are spurring Manitou to expand "development efforts in growth regions, especially in North America and Northern Europe", Mr Denis said.

The UK, for instance, has been quicker than that of the eurozone to recover from the world economic downturn, while the North American construction market has performed far better than that for farm machinery, data from the likes of Deere & Co show.

Currently, while Manitou's Northern European sales are booming, rising 24% to E239.0m in the first half of 2014, those in the Americas were up only 1.0% at E131.9m.

Livestock vs arable

The US agriculture market may also play to Manitou's strengths in showing some strength in the smaller equipment used by livestock farmers, even as sales drop of the larger machinery used by growers.

While US sales of four-wheel drive tractors fell 11.0% by volume in the first seven months of 2014, and combine sales by 15.2%, those of smaller tractors were 3.3% higher, according to the Association of Equipment Manufacturers.

Data on Thursday showed that US livestock farmers will earn more this year, in terms of cash receipts, than crop producers for the first time in nine years.

Manitou released its data after the close of trading on the Paris share market, where its stock ended down 0.7% at E12.81.


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