Tumultuous 2015 for Mills

By Euan Youdale10 March 2016

Mills has reported a challenging 2015 financial year, “in an adverse political and macroeconomic scene.”

The Brazil-based group completed its tumultuous 12 months with net revenues of R$576.1 million, 27.5% lower than in 2014.

This resulted in a net loss of R$97.8 million, compared to R$64.3 million net profit in 2014, explained by a R$170.9 million reduction in EBITA. Excluding non-recurring items, EBITA stood at R$186.7 million for the year, with a 32.4% EBITDA margin.

Sales of assets totalled R$53.9 million during the year, of which R$29.1 million was semi-new equipment, 89.9% higher than in 2014.

The company, fully named Mills Estruturas e Serviços de Engenharia, said only 425 powered access machines entered the Brazilian market in 2015, representing a 90% reduction year-on-year. “We believe in the growth drivers for this market in the medium and long term, and in the expansion due to safety and productivity gains,” said the company’s financial report.

“Falls from height are the main cause of fatalities in construction sector, not only in Brazil but also in US, so aerial platforms are recognised as the safest method for working at height, with the lowest accident index among different ways of access to heights. Therefore, aerial platforms should replace less safe access equipment as safety concerns grow in Brazil.”

The group reduced capex in 2015 by 85.8%, totalling R$28.2 million, R$11.7 million of which was rental equipment replacement.

Group CEO Sergio Kariya, said, “This year we have reduced all capex substantially in equipment rental and corporate goods and do not foresee any capex in 2016, given the high idleness of our business units.”

Mr Kariya added that there had been redundancies in backoffice staff, renegotiation of its depot lease agreements and it had shut down five Construction segment branches and three Rental segment branches.

In October, the head office was moved from Barra da Tijuca to Jacarepaguá where the company’s warehouse is based. And in a bid to reduce costs further the Heavy Construction and Real Estate commercial management segments were brought together in a single business unit, while Engineering and some operational functions were also consolidated, and the investor relations department was integrated with the finance department.

“In an extremely challenging year, we took the necessary actions to face this adverse scenario. Therefore, we are confident that we ended 2015 better structured than we began it. And if 2016 brings us new challenges, we are better prepared to face them from the company's internal perspective,” added Mr Kariya.

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