Caterpillar dealer Finning International posted CDN $1,547 million in revenue in the third quarter compared to $1,333 million in the third quarter of 2016, a 16-percent increase. EBITDA was $149 million, compared to $119 million a year ago, an 18.9-percent hike. Net income leapt from $36 million in Q316 to $52 million, a 44.4-percent jump.
“I am pleased with continued improvement in our financial performance, supported by strengthening activity in our key markets,” said Scott Thomson, president and CEO of Finning. “While pricing remains highly competitive, the reduced cost structure and operational discipline is having a positive impact on profitability. In addition, our working capital metrics continue to improve as we optimize our global supply chain while capitalizing on growing demand for parts and equipment. As a result, we are achieving a higher return on invested capital across all our regions.”
An increase in invested capital compared to the fourth quarter of 2016 was mostly the result of higher inventory levels to meet strengthening demand for parts and equipment. In Canada, rapid growth in product support and component rebuild activity resulted in higher parts and internal service work in progress inventories, as well as an increase in accounts receivable. Parts and internal service work in progress inventories were also higher in South America, in line with improving demand for product support. An increase in new equipment inventories was driven primarily by South America and the United Kingdom and Ireland.
Third quarter equipment rental revenue was $63 million compared to $61 million in the third quarter of 2016, a 3.3-percent hike. For the first nine months of 2017, equipment rental revenue was $168 million compared to $170 million for the first nine months of 2016, a slight drop.
Overall, revenues in Canada for the third quarter increased by 19 percent, with higher revenues in all lines of business and in key markets. New equipment sales were up 21 percent, driven by higher sales to mining and construction customers. Product support revenues grew by 19 percent, reflecting stronger demand for parts and component rebuilds in the oil sands and other mining regions, improved activity in construction markets, and higher engine parts sales and overhaul work in the oil-and-gas sector. Used and rental equipment revenues benefited from the integrated management of used equipment and rental fleets, as well as a recovery in general construction markets.
Headquartered in Vancouver, B.C., Canada, Finning operates in Western Canada, Chile, Argentina, Bolivia, U.K. and Ireland.
