Caterpillar dealer Finning posted CDN $1.310 billion in revenue, a 22-percent decline year over year. EBITDA dropped by half from $157 million to $77 million.
Finning reported improved profitability in Canada with a 4.4-percent EBIT margin, including unavoidable costs during the shutdown caused by the Alberta wildfires. Revenues declined by 27 percent in Canada with lower new equipment sales in all sectors and the impact of the wildfires on product support volumes in the oil sands. Rental revenues also dropped 27 percent, impacted by lower rental utilization and competitive pricing in a soft market. New equipment sales also dropped 54 percent, reflecting large mining deliveries in the second quarter of 2015 and lower industry activity in Q216, primarily in the oil and gas markets.
Revenues dropped 20 percent in South America, with weak market conditions as copper prices remained suppressed. Revenues decreased 9 percent in the United Kingdom and Ireland, because of reduced activity in key markets such as coal, steel and oil & gas.
“The second quarter results demonstrated the benefit of actions taken to improve our operating performance and reduce costs in our Canadian and South American operations,” said Finning CEO and president Scott Thomson. “I am pleased with the improvement in Canada’s profitability, particularly considering the impact of the recent wildfires in Northern Alberta. In South America, we continued to execute well in a tough market in Chile, and are encouraged by the opportunities emerging in Argentina.”
Finning International is the world’s largest Caterpillar dealer. It is based in Vancouver, B.C., operates in Western Canada, Chile, Argentina, Bolivia, the United Kingdom and Ireland, and is No. 18 on the RER 100.
