Wajax Income Fund recently posted fourth-quarter and full-year results, and announced plans to seek unitholder approval to reorganize the company into a corporate structure effective 2011.
Consolidated fourth-quarter revenue for the Mississauga, Ontario, Canada-based company was CA$250.9 million (about U.S. $244 million), a 21-percent decline compared to the fourth quarter of 2008’s total revenue of CA$317.3 million. Mobile Equipment and Power Systems divisions decreased 14 and 29 percent respectively, as a result of lower equipment, parts and service sales. The Industrial Components division dropped 25 percent on weak demand for all product categories.
For the full-year 2009, total revenue was CA $973.1 million, compared to CA$1.213 billion for 2008, a decline of 19.8 percent.
Net earnings for the fourth quarter were CA $8.3 million, compared with CA $19.4 million for the year-ago quarter. Net earnings for the full year were CA$34.2 million, compared with CA$75.8 million for 2008, a 54.8-percent plunge.
“In 2009, we witnessed an unprecedented decline in market demand in most industry sectors we serve,” said Wajax president and CEO Neil Manning. “On a consolidated basis, revenue was down in every sector except for government and utilities. The largest reductions were evident in the construction and conventional oil and gas sectors with the smallest decline in the oil sands. We reacted to these rapidly deteriorating business conditions by reducing headcount by approximately 15 percent and aggressively cutting other overhead expenses. As well, capital spending was curtailed and non-cash working capital was lowered by more than $57 million.”
Manning said the company expects modest improvement in market demand in 2010, primarily in the second half of the year. “We anticipate that the early part of 2010 will continue to be challenging compared to 2009 as revenue in that period benefited from a larger backlog position at the end of 2008. It is expected that activity in the oil sands and the government and utilities sectors will remain strong, with increased activity in mining and metal processing anticipated as demand for commodities continues to grow. While we believe the construction and conventional oil and gas sectors have attractive longer-term growth prospects, in 2010 they are expected to continue to be well off activity levels experienced in the strong markets of 2008.”
Wajax has a significant rental business and is No. 41 on the RER 100.
