Finning International, Canadian and international Caterpillar dealer recorded a decline in third quarter revenues to CAD $1.7 billion, a 6-percent drop as a result of lower new equipment sales in Canada and South America compared to very strong deliveries in Canada in last year’s third quarter. Product support revenues grew by 4 percent to record levels, driven primarily by higher parts sales in Canada.
Equipment rental worldwide declined 11 percent in the third quarter compared to last year’s third, coming in at CAD $92.8 million, compared to $103.8 million a year ago. For the first nine months of 2014, equipment rental dropped 8 percent from $289.7 million a year ago, to $266.6 million this year. Still, CEO Scott Thomson told an investors’ conference call that rental is an increasing percentage of the overall market and that Finning will still spend more than CAD $100 million on fleet capex in 2015.
“We spent a lot of time on this business model with Cat and you are going to see more investments on the rental business next year in western Canada,” Thomson said.
“This is going to be a good business for us going forward.”
Looking ahead at the company’s worldwide business, Thomson added: “We expect demand for new equipment in South America to remain low through 2015, however I am encouraged by the fiscal clarity and recent infrastructure announcements in Chile, which provide support for the market. We are expecting the resumption of product support growth in South America in 2015, driven by improved economic activity.
“In Canada, despite the recent decline in the price of oil and other commodities, we continue to see healthy demand for equipment and product support across most market segments.”
Finning, based in Vancouver, B.C., Canada, is Caterpillar dealer in Western Canada, Argentina, Chile, Bolivia and Uruguay, as well as the United Kingdom and Ireland. Finning is No. 10 on the RER 100.
