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Canada’s Wajax Boosts Revenue 7.1 Percent in Q2

Canadian distributor Wajax Corp. posted CDN $409.4 million in second quarter revenue, the company reported, compared to $382.3 million for the second quarter of 2018, a 7.1-percent increase.

Canadian distributor Wajax Corp. posted CDN $409.4 million in second quarter revenue, the company reported, compared to $382.3 million for the second quarter of 2018, a 7.1-percent increase. For the first six months of 2019, Wajax posted $784 million in revenue, compared to $724.7 million in the first six months of 2018, an 8.2-percent hike.

Equipment rental in the second quarter brought in $9.2 million in revenue, compared to $8.9 million in the second quarter last year, a 2.7-percent increase. For the first six months of the year, rental was $18 million compared to $16.9 million in the first six months of 2018, a 6.5-percent leap.

On a regional basis, revenue in western Canada was $158.4 million, a 4 percent year-over-year jump, with strong mining equipment and parts and service sales and higher forestry equipment sales were partially offset by lower construction and power generation sales.

Revenue in central Canada of $82.7 million was an 11-percent decrease primarily because of lower construction and power generation sales. Revenue in eastern Canada of $168.3 million increased 23 percent year over year because of sales gains in the majority of product categories, including higher ERS sales resulting primarily frp, the acquisition of Delom in the fourth quarter of 2018 and higher power generation sales, partially offset by lowe mining equipment sales.

“Consolidated results in the second quarter were consistent with our expectations,” said president and CEO Mark Foote. “Revenue growth of 7 percent resulted from increased sales in ERS and product support while equipment and industrial parts sales were comparable year over year. Results in eastern Canada showed broad strength in the second quarter and there were indications of improvements in market conditions in western Canada. Central Canada revenue performance is an important focus area and we expect improvements as the year progresses.

“The gross profit rate of 19.1 percent was generally consistent with the prior year and the sequential improvement experienced in the first quarter. The selling and general administrative expenses rate of 13.9 percent reflects a strong focus on cost management during a key period of investment in our business in areas including personnel, systems and customer support. The sequential increase in inventory relates primarily to new equipment and secondarily to parts stock. The current levels of inventory support our sales plans and ongoing efforts to improve our customer service levels in parts. Leverage remains within acceptable boundaries and is expected to improve further as the year progresses. We are pleased with the increase in backlog that reflects continued strength in mining and sequential growth in forestry and construction.”

Foote added that the company expects stable market conditions in eastern and central Canada in 2019. “In western Canada, activity remains stable to positive in important end markets such as the oil sands and mining but is expected to slow temporarily in areas such as conventional oil and gas, forestry, construction and related markets. Wajax believes that 2019 market conditions in western Canada are more favourable than those that prevailed when energy prices were weak in 2015 and 2016.”

Wajax Corp., headquartered in Mississauga, Ontario, Canada is No. 72 on the RER 100.

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