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    1. News & Analysis
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    Caterpillar Dealer Finning Posts Moderate 3.4-Percent Revenue Increase in Second Quarter

    Aug. 11, 2024
    Equipment rental revenue declined from $78 million a year ago to $70 million, an 11.4-percent drop.

    Caterpillar dealer Finning International posted CDN $2.646 billion in second quarter 2024 revenues compared to $2.559 billion in the second quarter of 2023, a 3.4-percent increase. Sales of new equipment increased from $949 million a year ago to $979 million, a 3.2-percent incline. Equipment rental revenue declined from $78 million a year ago to $70 million, an 11.4-percent drop.

    Product support revenue was essentially flat. Sales of used equipment was a bright spot, jumping from $93 million a year ago to $146 million, a 57-percent jump. 

    “I would like to thank our team for delivering record EPS and free cash flow for Q2, which reflects diligent execution of our strategic plan,” said president and CEO Kevin Parkes. “We are pleased with continued momentum in our used equipment strategy and encouraged by sequential recovery in our product support revenue. Equipment order intake was very strong reflecting significant strategic wins in each region, including contracts with multiple copper mines in Chile, the oil sands in Canada, and data centers in the UK and Ireland. New orders are moving through our backlog faster, which supports our efforts to unlock working capital and deliver substantial free cash flow while continuing to build equipment population.

    “We remain focused on growing our business in a moderating but overall steady growth environment through driving product support, building full-cycle resilience by unlocking invested capital, and delivering sustainable growth in used, rental, and power systems. We anticipate the execution of our strategy will have an increasing impact through this year, with improving product support growth rates, greater working capital velocity, and substantial free cash flow generation in the second half of 2024.” 

    Finning said its outlook for Western Canada is positive. While the completion of major pipelines has slowed some construction activities in the near term, it creates additional capacity to move heavy oil and liquefied natural gas to end markets, and the company expects increased activity in the energy sector going forward. The company anticipates strong demand for product support, component remanufacturing and rebuilds. 

    “We expect ongoing commitments from federal and provincial governments for infrastructure development to support activity in the construction section,” the company said in its quarterly report. “In addition, growing demand for reliable, efficient, and sustainable electric power solutions across communities in Western Canada creates opportunities for our power systems business.”

    Headquartered in Vancouver, B.C., Canada, Finning is the world’s largest Caterpillar dealer, covering western Canada, United Kingdom and Ireland, Argentina, Bolivia and Chile.

    About the Author

    Michael Roth | Editor

    Michael Roth has covered the equipment rental industry full time for RER since 1989 and has served as the magazine’s editor in chief since 1994. He has nearly 30 years experience as a professional journalist. Roth has visited hundreds of rental centers and industry manufacturers, written hundreds of feature stories for RER and thousands of news stories for the magazine and its electronic newsletter RER Reports. Roth has interviewed leading executives for most of the industry’s largest rental companies and manufacturers as well as hundreds of smaller independent companies. He has visited with and reported on rental companies and manufacturers in Europe, Central America and Asia as well as Mexico, Canada and the United States. Roth was co-founder of RER Reports, the industry’s first weekly newsletter, which began as a fax newsletter in 1996, and later became an online newsletter. Roth has spoken at conventions sponsored by the American Rental Association, Associated Equipment Distributors, California Rental Association and other industry events and has spoken before industry groups in several countries. He lives and works in Los Angeles when he’s not traveling to cover industry events.