Canadian distributor posted a 7-percent increase in fourth quarter revenue of CDN $391.7 (about U.S. $355.1 million), compared to $364.9 million in the fourth quarter of 2012. The company posted gains in its equipment, power systems and industrial components segments, with the equipment segment jumping 8 percent on strong forestry and construction equipment sales. Power Systems increased revenue 8 percent on higher power generation equipment and on-highway parts and service volume.
For the full year 2013, revenue dropped 2.6 percent from $1.466 billion in 2012 to $1.428 billion in 2013. Industrial components increased slightly, while the equipment and power systems divisions’ revenues declined slightly.
Revenue associated with the oil-and-gas sector in western Canada began to decline in the second half of 2012, Wajax officials said, and continued to be soft throughout 2013. This primarily affected the Power Systems and Industrial Components segments as customers continued to limit capital and maintenance spending for exploration and well-servicing equipment. Mining activity, including the oil sands, was soft for all three segments as customers reduced spending because of weaker commodity prices.
“Our expectation is that market conditions in 2014 will be similar to those encountered in 2013 and the continuing weakness in the oil and gas and mining markets is expected to create challenges for growth in 2014,” said Mark Foote, Wajax president and CEO. “In particular, we anticipate earnings in the first quarter to be lower than last year. Despite these market conditions, our focus is to continue to invest in our strategic initiatives that focus on organic growth and continued expansion of our aftermarket business. At the same time, we are cautiously managing total costs, our asset base and leverage.”
Wajax Corp. is based in Mississauga, Ontario. The company is No. 50 on the RER 100.