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Zoomlion says 2015 worst for 15 years
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CHINA’S Zoomlion Heavy Industry Science and Technology Co, which is bidding to buy United States crane maker Terex Corp for about US$3.4 billion, yesterday reported its lowest annual profit in 15 years.
The company’s net income for 2015 fell 85 percent year on year to 89 million yuan (US$13.7 million), the company said in a stock exchange filing, its lowest since 2000 when the figure was 54 million yuan. Last year’s revenue fell 19.7 percent to 20.8 billion yuan, it said.
It was the fourth consecutive year of profit decline. The result, which was highly anticipated, might add momentum to the Terex bid, as Zoomlion seeks to tackle problems at home by acquiring assets overseas.
Chinese heavy equipment makers are battling a glut of unsold equipment, unused factories and tumbling earnings following a massive construction boom initiated by a US$644 billion government stimulus package announced in 2008.
Zoomlion’s acquisition of Terex could provide access for the maker of concrete and earth-moving heavy equipment to US markets, where its same-town rival Sany Heavy Industry Co already has an assembly plant.
Terex said last week that it was moving forward with negotiations after Zoomlion raised its bid for the company to US$31 per share, increasing its offer to about US$3.4 billion from US$3.29 billion, based on the company’s total diluted outstanding shares as of December 31.
Zoomlion earlier told investors that it has prepared a concrete financing plan for the Terex acquisition. The deal will be 40 percent funded by cash and the remainder by bank loans, it said.
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