Canada’s Finning, believed to be the world’s largest Caterpillar dealership, reported CDN $2.539 billion in third quarter 2024 revenue compared to $2.437 billion for the third quarter of 2023, a 4.2-percent increase. Equipment rental revenue for the quarter tumbled from $86 million in the third quarter of 2023 to $76 million this year, an 11.6-percent decline. New equipment sales revenue increased from $870 million a year ago to $933 million in the recently concluded quarter, a 7.2-percent increase. Used equipment sales hiked from $72 million in Q323 to $89 million this year, a 23.6-percent climb. Product support revenue totaled $1.388 billion compared to $1.362 billion a year ago, a 1.9-percent increase.
“Our results in the third quarter were different by region and reflect the advantage of our diversified business,” said Kevin Parkes, Finning president and CEO. “We had strong growth in South America, resilient profitability in the UK & Ireland, excellent free cash flow in all regions and our backlog remains healthy. Deliberate actions to generate strong cash flow coupled with tougher market dynamics resulted in more challenging margin performance in our Canadian business. We are focused on cost control to drive improved profitability going forward.
“One year on from our Investor Day in Chile our product support growth overall is positive, and our working capital velocity is gaining momentum. We have acted to further align our cost base, maintain the quality of our inventory, and announced succession in our leadership team. We are all focused on driving the execution of our strategy. Our strategy is focused on maximizing product support, continuously improving our cost and capital position to drive full-cycle resilience and growing prudently in used, rental and power – all with the objective of achieving a sustainably higher ROIC going forward.”
In its Canada operations, Finning’s net revenue decreased 1 percent primarily because of lower product support revenues and lower rental utilization, partially offset by increased new equipment deliveries, which included a large proportion of mining rental equipment with purchase option conversions. In the U.K. and Ireland, net revenue decreased 1 percent with new equipment sales down 3 percent because of slower demand from certain industrial customers. In South America, net revenue increased 10 percent, up in all lines of business except rental.
Rental headwinds
Looking forward in Canada, the company expects headwinds in the used and rental markets following a period of strong sector activity and limited equipment supply. Finning expects normalization for the next several quarters, with a high proportion of mining deliveries in the fourth quarter of 2024.
With rental numbers for its Canadian operations only, Finning is No. 20 on the RER 100.
Finning is the Caterpillar in Western Canada – British Columbia, Yukon, Alberta, Saskatchewan, Northwest Territories and a portion of Nunavut; Chile, Argentina and Bolivia; the United Kingdom and Ireland.
