Wajax Income Fund, a major Canadian distributor with a strong rental division experienced a 2.5 percent decline in second quarter revenues on a year-over-year basis, the company said last week. The strength of the Canadian dollar negatively impacted Wajax revenues by about 6 percent — CA $18.7 million — as currency-related price reductions on products imported from the United States were generally passed on to customers.
Mobile equipment revenues increased 6 percent because of a 21 percent improvement in parts and service volumes. Power Systems sales dropped 20 percent for the quarter as a result of reduced G.E. Energy engine deliveries and the impact of the stronger dollar. Revenue in the Industrial Components division dropped 4 percent as a result of currency and reduced activity in the forestry, manufacturing and natural gas drilling sector.
“As we anticipated, strong market segments such as mining, including the oil sands, and infrastructure more than offset weaker areas of the Canadian economy,” said Neil Manning, president and CEO. “We are particularly pleased with the strength in Mobile Engineering parts and service sales as we benefit from servicing equipment sold in previous years. Looking forward, we continue to be concerned about the strength of several sectors of the Canadian economy, particularly manufacturing, forestry and residential construction. However, we anticipate a continuing benefit from strong sectors such as mining and infrastructure plus further growth in after-market support revenue. Management continues to be optimistic that an increase in natural gas drilling activity in western Canada may occur in the latter part of the year. As a result, we expect full year earnings to show improvement over the previous year.”
Wajax’s second quarter revenue totaled CA $311.2 million (about U.S. $295.6 million, according to current exchange rates), compared with $319.1 million for the same period in 2007. Revenue for the first six months was $596.9 million, compared with $621.4 million for the same period in 2007.
Based in Mississauga, Ontario, Wajax is No. 39 on the RER 100.