Finning International, the world’s largest Caterpillar dealer reported a 19-percent second-quarter revenue jump, from CDN $1.48 billion in 2011 to $1.77 billion ($1.77 billion U.S.) in the recently concluded quarter. Healthy market conditions in the second quarter drove growth in new equipment sales and record product support revenues.
Strong results from South America and the U.K. and Ireland contributed to record quarterly EBIT of $122 million. EBIT margin of 6.9 percent showed sequential improvement over the past three quarters, as the ERP-related support and improvement costs in Canada were reduced.
Quarterly revenues grew in all regions and across all business lines. Equipment rental revenues across the company grew 12 percent, from $81.8 million a year ago to $91.3 million.
“I am pleased with our strong quarterly revenues fuelled by a third consecutive quarter of record product support as well as solid new equipment sales,” said Mike Waites, president and CEO of Finning International. “We reported sequential improvement in EBIT margin, and we continue to see healthy order intake levels and robust demand for product support, particularly in our resource-rich territories. In light of uncertain global economic conditions, we are monitoring our end markets closely and are simply taking prudent steps to manage our inventory levels, in order to maintain a strong financial position.”
Waites said a highlight of the quarter was the successful closing of the former Bucyrus distribution businesses in the U.K. and South America, with integration exceeding expectations. The company also during the quarter named Juan Carlos Villegas chief operating officer.
In the western Canada region, machine deliveries and equipment utilization remained robust, the company said, with total revenue increasing 29 percent compared with Q211.
Finning International is the Caterpillar dealer for western Canada, U.K. and Ireland, Argentina, Chile, Uruguay and Bolivia. The company’s rental division in Canada is No. 9 on the