Toromont Industries Jumps 14 Percent in Third Quarter 2024 Revenue

Toromont Industries, owner of one of the world’s largest Caterpillar Industries, posted CDN $1,338.0 million in revenue for the third quarter 2024 compared to $1,174.0 million in the third quarter of 2023, a 14-percent increase. For the first nine months of the year, Toromont’s revenue was $3,714.2 million compared to $3,395.4 million in the first nine months of 2023, a 9.4-percent jump.

"Results for the third quarter of 2024 reflect good activity levels across most markets as well as continued execution against a strong order backlog. Bottom line results have been dampened as expected against a strong comparator reflective of market dynamics in play last year," said Michael McMillan, president and CEO of Toromont Industries Ltd. "The Equipment Group executed well with solid new equipment deliveries. Rental markets, specifically light equipment, picked up in the quarter. CIMCO revenue and bottom line improved on good activity and execution. Our financial position remained strong as we continued to invest in the business through working capital and a business acquisition. Although residential related activities are experiencing a slower part of the business cycle, this is partially offset by the completion of deliveries in mining related to mine development and expansion in our territory. As we look out over the next cycle, we anticipate a more balanced revenue mix with a focus on Product Support as recent equipment deliveries are utilized. Our team remains focused on our long-term investment strategies and our operating disciplines, driving our aftermarket strategies and delivering customer solutions." 

In the Equipment Group, which is the majority of Toromont’s revenue, revenue was up $145.2 million or 14 percent to $1.2 billion for the quarter. New equipment sales increased 36 percent, with good activity and deliveries in the mining and construction markets. Rental revenue demonstrated a marginal recovery from earlier this year with improved light equipment activity. Product support activity was good, with a healthy increase in service, reflecting continued growth of Toromont's technician workforce, which was slightly offset by a modest decline in parts revenue. 

Revenue was up $278.4 million or 9 percent to $3.4 billion for the year-to-date period. New equipment sales and product support activity were higher across most markets and product groups, partially offset by lower used equipment and rental revenue.

Bookings in the third quarter were $367.5 million, an increase of 14 percent, with strong bookings in construction, power systems and material handling being partially offset with lower mining orders. Year-to-date bookings were $1.5 billion, an increase of 12 percent from the similar period last year. Construction bookings increased 22 percent, reflecting good market activity. Mining was also strong with good orders received through the first half of the year. Power systems order activity was lower, in part reflecting a large project received last year. Both mining and power systems orders have more variability over time because of the nature of orders. 

Backlog of $803.7 million at the end of September 2024 was down $167.4 million or 17 percent from the end of September 2023, reflecting deliveries against opening backlog offset by new bookings. 

Expanding the rental market

On September 9, 2024, the company completed the acquisition of the business and net operating assets of Tri-City Equipment Rentals for a total purchase price of $77.5 million. Tri-City is a strong player in heavy equipment rentals, with operations in Southwestern Ontario. The acquisition expands Toromont Cat's heavy rents business to better serve its customer base.

"Although rental markets have been challenged this year in some areas, we remain highly committed to this market for the longer term, as evidenced by our acquisition of Tri-City,” said John Doolittle, executive vice president and chief financial officer of Toromont Industries. “This acquisition expands our Toromont Cat heavy rents business to better serve existing and new customers and provides a rental hub in the Southwestern Ontario region. While market dynamics and better equipment availability within the Equipment Group mean returns are lower than last year, new bookings and equipment deliveries have been healthy. We will maintain our focus on operating and financial disciplines to manage our cost structure, while we invest in capacity and capabilities to provide exceptional service to our customers today and in the future.”

Toromont operates the Caterpillar dealership for Newfoundland and Labrador, Nova Scotia, New Brunswick, Prince Edward Island, Québec, Ontario and Manitoba, in addition to most of the territory of Nunavut. 

Based in Concord, Ontario, part of the Greater Toronto Area, Toromont Cat is No. 13 on the RER 100.