Revenue increased by 8 percent to $1.6 billion for Finning International in the first quarter, driven by significantly higher revenue from South America, which more than offset modest revenue reduction in Canada, the U.K. and Ireland. Product support revenue increased 13 percent to record levels reflecting incremental revenue from the expanded mining product line and solid machine utilization in mining and construction. On a worldwide basis, equipment revenue increased 2 percent to $93 million, compared to $91.2 million a year ago.
EBIT grew 21 percent to $117 million and consolidated EBIT margin was 7.4 percent compared to 6.6 percent in the first quarter of 2012, reflecting higher EBIT margin in Canada.
In Canada revenues declined by 3 percent compared to Q112, impacted by 20-percent lower new equipment sales, primarily to mining customers. However, Canada’s EBIT grew 46 percent to $57 million. The year-over-year improvement is largely the result of reduction of ERP system-related costs as well as a favorable shift in revenue mix to higher margin product support.
“Our ability to grow revenues during heightened economic uncertainty clearly demonstrates the benefit of our broad end-market and geographic diversification, as well as our product support capabilities,” said Mike Waites, president and CEO of Finning International. “As expected, slow activity in mining translated into lower order intake. However, our backlog remains solid, and high machine utilization levels are expected to continue driving strong product support revenues in 2013. Our priorities for the year ahead remain unchanged. We are executing on operational excellence initiatives with rigor and discipline to achieve sustainable improvements in our operating profitability.”
The company said consolidated 2013 revenues are expected to be flat to up 10 percent compared to 2012, with earnings growing at a higher rate than revenue.
Finning International is headquartered in Vancouver, B.C., Canada.