Finning International increased Canadian revenue 6 percent in the first quarter of 2016 compared to the same period in 2015. The company generated $30 million in free cash flow in the quarter compared to a loss of $232 million in the year-ago quarter, and Finning expects 2016 free cash flow to top $300 million.
The global workforce was reduced by 435 people year to date in response to difficult market conditions.
Revenue for the first quarter was $1.494 million, compared to $1.541 million in the first quarter of 2015, a 3-percent decline. Revenues were lower in South America and the U.K. and Ireland, but the company had higher revenues in Canada. New equipment sales dropped 7 percent, although they were up in Canada. Rental margins were lower and equipment rental volume declined 21 percent from $71 million in Q115 to $56 million this year.
“First quarter results were in line with our expectations as we continued to realize permanent cost savings and implement sustainable operating improvements to transform the business for long-term success,” said president and CEO Scott Thomson. “Importantly, we began generative positive free cash flow early in the year, demonstrating the resiliency of our business model and our focus on effectively managing working capital.
“Our Canadian operations delivered stronger revenues driven by equipment and parts sales. Margins were lower as expected due to large equipment deliveries and workforce reductions which occurred at the end of the quarter. “
Thomson said the company expected relatively strong EBITDA and free cash flow this year.
