Construction and truck equipment dealer Ferronordic experienced a decrease in total revenue during the second quarter, largely due to uncertainties surrounding U.S. trade and tax policies.
The Sweden-based Ferronordic operates in the U.S. through Rudd Equipment, which it acquired for $95 million in November 2023. Rudd’s 13 facilities across nine states enable Ferronordic to distribute products from well-known manufacturers such as Volvo Construction Equipment, Hitachi Construction Machinery, Sandvik, Bergmann, and Link-belt Cranes.
Despite steady demand in the U.S. driven by infrastructure projects and a strong order backlog, Ferronordic’s sales and operating profit fell due to tariff uncertainties, according to Chief Executive Henrik Carlborg during the earnings call on August 14.
“We’re not pleased with these results, yet we are positioned well for future growth,” Carlborg commented.
“We currently do not foresee that tariffs will affect our U.S. operations worse than anyone else in the market.” — Henrik Carlborg, CEO, Ferronordic
Carlborg noted that the passage of the One Big Beautiful Bill in July should alleviate concerns regarding tax incentives and support future investments. U.S. operations accounted for 64% of the company’s revenue in Q2, according to its earnings report.
Having assumed the role of CEO in the second quarter, Carlborg took over from former CEO Lars Corneliusson, who transitioned to executive chairman.
Performance Overview
In Q2, Ferronordic reported the following:
- U.S. segment revenue: 695 million krona ($72.7 million), down 4.4% YoY;
- U.S. equipment and truck sales: $34.9 million, down 9.3% YoY;
- U.S. new unit sales: 59 units, down 15.7% YoY;
- U.S. operating profit: $2.7 million, down 49% YoY;
- Total equipment and truck sales: $56.1 million, down 8.1% YoY;
- Total new unit sales: 220 units, up 20.9% YoY;
- Total operating profit: a loss of $520,000, down 23%;
- Total revenue: $113.8 million, down 2.4% YoY.
Future Prospects
Despite weaker performance globally and in the U.S., Ferronordic is optimistic about the U.S. market, pointing to ongoing demand for infrastructure, according to Carlborg.
“We anticipate that infrastructure activity will remain strong, given the urgent need to maintain American roads and other critical structures,” he stated, adding that there are clear opportunities to grow U.S. operations in the future.
As of market close on August 14, Ferronordic shares [STO: FNM] were priced at $4.68, reflecting a 0.33% decline since the market opened. The shares traded at $4.70 at today’s close, up 0.22%. The company’s market capitalization stands at $651.78 million.
Note: All figures have been converted to U.S. dollars.
