Toromont Industries, which includes the Caterpillar dealership for Ontario, Manitoba, Newfoundland, and most of Labrador and Nunavut, posted a 15-percent revenue increase in the first quarter, although its equipment group dropped 5 percent with lower new and used machines sales. Toromont’s overall increase was the result of a 36-percent boost in U.S. natural gas compression sales.
“Our equipment group is experiencing reduced bookings due to the general economic slowdown,” said Robert Ogilvie, Toromont chairman and CEO. “We expect that recently announced infrastructure programs will have some positive impact beginning later this year.”
Toromont’s equipment rental division, Battlefield Equipment Rentals, had a strong first quarter. Rental revenues for the quarter were CAD $27.7 million (about U.S. $22.4 million), a 1-percent increase compared with $27.4 for the first quarter last year.
The increase in rental revenues was helped by a new location in Sault Ste. Marie, Ontario. First-quarter rental revenues were supported by seasonal equipment contracts and strength in Manitoba and Newfoundland. Rental activity in Ontario declined on lower demand from steel, auto and construction markets.
New and used equipment sales dropped 16 percent and 8 percent respectively. Mining and industrial power systems applications, including prime and backup power systems, recorded good deliveries in the quarter. However, some mining customers have significantly reduced activity and deferred new projects, the company said. Other market segments, most notably heavy and general construction, were lower.
The company also last week announced a regular quarterly dividend of $0.15 per share on outstanding common shares, payable July 2, to shareholders of record at the close of business on June 12.
Toromont Industries Ltd. operates through two business segments: The Equipment Group and the Compression Group. The Equipment Group includes Battlefield Equipment, one of the world's largest Caterpillar dealerships by revenue and geographic territory, which is No. 23 on the RER 100. The Compression Group is a North American leader specializing in the design, engineering, fabrication, and installation of compression systems for natural gas, coal bed methane, fuel gas and carbon dioxide in addition to process systems and industrial and recreational refrigeration systems.