Finning, the world’s largest Caterpillar dealer, posted a 2-percent revenue decline in the second quarter of 2010, with CA$1.075 billion (about U.S. $1.033 billion) in revenue, compared with CA$1.097 billion for last year’s second quarter. EBITDA was CA$67 million, compared with CA$73 million for the year-ago period, a 9-percent drop. EBITDA improved 61 percent compared with the first quarter.
Canadian rental revenue declined 17 percent for the quarter, year over year, while new equipment sales plunged 23 percent. However product support revenues leaped 18 percent driven primarily by mining, including the Alberta oil sands business. Order backlog increased in 2010.
“Market conditions are improving for all our operations and the recovery is unfolding earlier than we expected,” said president and CEO Mike Waites. “Mining remains strong and activity in non-mining markets is picking up. We are also starting to see the benefits of our operational excellence initiatives as we are generating improved EBIT margins.”
As previously reported, the company sold Hewden, its U.K. rental business, in May for an after-tax loss of $244 million, or $1.43 per share. Gross proceeds on the sale were £110 million.
Waites was optimistic about the company’s prospects, and emphasized the product support side of the business.
“We are making selective investments in capacity in South America and Canada to support the growing product support business,” he said. “The recently announced acquisition of the Caterpillar dealerships in Northern Ireland and The Republic of Ireland leverages our existing infrastructure and power systems expertise in the U.K. and will be accretive to EBIT.”
Based in Vancouver, B.C., Canada, Finning is No. 10 on the RER 100. The company operates in western Canada, the U.K., Chile, Argentina, Bolivia and Uruguay.