Canadian Caterpillar Dealer Finning Increases Revenues 22.6 Percent in Third Quarter
Canada’s Finning, one of the world’s largest Caterpillar dealers, posted CDN $1.904 billion in third quarter 2021 revenue, compared to $1.553 billion in the third quarter of 2020, a 22.6-percent year-over-year increase. EBIT in the quarter was $150 million compared to $138 million in the third quarter of 2020, while EBITDA increased from $215 million a year ago to $230 million this year.
“Our global team continues to successfully execute on our strategic plan to grow product support, reduce costs, and re-invest free cash flow to compound our earnings,” said CEO Scott Thomson. “Strong operating leverage drove a record third quarter EPS and now we expect to achieve our mid-cycle EPS and ROIC targets ahead of schedule. We are working closely with our customers to meet their equipment needs in an environment of increasingly constrained supply. We have been proactively managing our inventory, increasing it by $150 million year to date, sourcing used equipment, and offering equipment rebuilds and rental options. Our revenue outlook remains positive, supported by our healthy backlog and strong market conditions, and we continue to expect the mid-cycle environment to transition to up-cycle in 2022.
“As part of our growth strategy, we are expanding our 4Refuel capabilities to support our customers in their transition to low-carbon fuels, including CNG, RNG and hydrogen. Natural gas, hydrogen, and electrification are becoming an increasingly important aspect of our business as our customers are progressing towards their long-term goals of achieving net zero greenhouse gas emissions. With Caterpillar accelerating the development of battery-powered mining equipment as well as natural gas blending and fully hydrogen-capable power solutions, we are excited about future opportunities to help our customers meet their goals and utilize sustainable energy sources. In 2022, we will start using natural gas to power a portion of 4Refuel and Finning service vehicle fleets, which will help us achieve our own greenhouse gas emission reduction target set out in our Sustainability Report.”
In Canada, revenue increased by 11 percent year over year, driven primarily by higher product support revenue, as well as strong used equipment sales and rental revenue. Product support revenue hiked 12 percent, higher across all sectors. Construction product support revenue was up 16 percent, driven by a growing market share, including a significant increase in construction rebuilds. Used equipment sales jumped 35 percent and rental revenue increased 27 percent compared to the third quarter of 2020, with stronger demand for used equipment and rental equipment in construction. Finning is proactively sourcing used equipment to meet customer needs in a constrained supply environment.
New equipment sales decreased 3 percent in mining, but increased 13 percent in construction.
In South America, net revenue increased 41 percent, reflecting stronger market activity in Chile. New equipment sales jumped 126 percent compared to the third quarter a year ago, driven by deliveries to Chilean mining cusomers and improved demand for construction equipment to support mining infrastructure and general construction projects.
In the U.K. and Ireland, net revenue increased 28 percent from Q320, with increased deliveries to HS2 customers and stronger product support activity in all sectors. New equipment sales were up 45 percent.
Finning is headquartered in Vancouver, B.C., Canada.
