Vancouver, British Columbia-based Ritchie Bros. Auctioneers last week conducted its final unreserved auctions of 2008 and announced a preliminary gross auction proceeds estimate of U.S. $3.57 billion for the year. This represents a 12-percent increase over 2007 gross auction proceeds, making this the largest year in the company's 50-year history. Ritchie Bros. will release its full audited financial statements for 2008 on Feb. 26.
Ritchie Bros. conducted 193 unreserved industrial auctions in 13 countries throughout North America, Europe, the Middle East, Asia and Australia in 2008. It also conducted 147 unreserved agricultural auctions in 2008. During its last auction week of 2008, Ritchie Bros. attracted thousands of on-site and online bidders to several auctions, including the $26 million auction at its permanent auction site in North East, Md., and the $21 million auction at its permanent auction site in Olympia, Wash. (both held Dec. 16 & 17, 2008).
"We are very pleased with our 12 percent gross auction proceeds growth in 2008," said Peter Blake, Ritchie Bros. CEO. "We continued to grow our business and set records at our auction sites around the world, in spite of the global economic turmoil. When economies around the world took a sudden and dramatic downturn at the start of our fourth quarter, some of our customers decided to delay selling their idle or surplus equipment until the market found its level. We've seen more pricing stability at our auctions in recent weeks, which gives comfort to potential consignors and bodes well for 2009. We deliver value to our customers at all points in the economic cycle; however, demand for our services is probably highest in periods of economic turbulence. Unlike most other sales channels, our unreserved auctions provide almost instant liquidity and global fair market value for equipment sellers. When demand is volatile and unpredictable, sellers need access to the widest possible array of bidders, and that's what we offer.
"We faced unusual currency headwinds during the last quarter of 2008 that negatively impacted our reported fourth quarter gross auction proceeds by about $55 million. The Canadian dollar, Euro and Australian dollar all experienced significant erosion compared to the U.S. dollar during the period. We continued to see strong gross auction proceeds growth in Canada, Europe and Australia, where we conduct auctions in non-U.S. currencies. However, we report our consolidated results in U.S. dollars, and some of that growth is muted when we convert these non-U.S. dollar amounts from the local currency into U.S. dollars. Mitigating that effect is the fact that roughly 60 percent of our operating costs on an annual basis are in non-U.S. currencies, meaning our consolidated operating costs reported in U.S. dollars benefited from these currency fluctuations."
In 2008, Ritchie Bros. sold a record amount of equipment and trucks to online bidders using its real-time internet bidding service. Almost 16,000 online bidders from 85 countries purchased more than $700 million of equipment and trucks from Ritchie Bros. auctions in 2008, an increase of 17 percent over record 2007 results. In 2008, online bidders represented approximately 29 percent of the total number of bidders at Ritchie Bros. industrial auctions. Online bidders were winner or runner-up bidder on 30 percent of the lots offered online at these auctions.
Since introducing its real-time internet bidding service in 2002, Ritchie Bros. has sold almost $2.5 billion of equipment to online bidders. More than 99,000 people from 181 countries are registered and approved to use this service.
In 2008, Ritchie Bros. paid dividends of more than $35.6 million, an increase of 14 percent compared to 2007. In December 2008, Standard & Poor's named Ritchie Bros. to the S&P/TSX Composite Index.
One of Ritchie Bros.' strategic initiatives involves expanding and improving its international network of auction sites. The company made significant headway on this front in 2008, celebrating the grand opening of new permanent auction sites in Kansas City, Mo., and Saint Aubin sur Gaillon, France, as well as the establishment of a new regional auction unit in Las Vegas. The company also relocated its regional auction units in Melbourne, Australia, to a larger site in nearby Geelong, and Sagunto, Spain, to a larger site in nearby Moncofa.
Ritchie Bros. has new or replacement permanent auction sites currently under construction in Houston; Minneapolis; Grande Prairie, Alberta; London, Ontario; and Mexico City. It also recently purchased land in Vancouver, BC, and Tokyo, on which it intends to build a replacement and a new permanent auction site respectively, as well as approximately 74 acres of land for the expansion of its permanent auction site in Orlando, Florida.
Established in 1958, Ritchie Bros. Auctioneers is a leading international industrial auctioneer. The company has more than 110 locations in more than 25 countries including 38 auction sites worldwide.