Toromont Industries, owners of one of the world’s largest Caterpillar dealership posted CDN $921.7 million in third quarter revenue, compared to $975.2 million in the third quarter of 2019, a 5.5-percent decline, a relatively small decrease in the age of COVID-19. Toromont reported $2,486.7 million for the first nine months of 2020, compared with $2,653.5 million for the first nine months of 2020, a 6.3-percent drop.
“We are pleased with the improvement experienced over last quarter, reflective of the Toromont team’s ability to adapt to an ever-changing environment, provide essential services and execute in a very challenging market,” said Scott Medhurst, president and CEO of Toromont Industries Ltd. “From the start of the COVID-19 pandemic, the Toromont team continues to drive improvements while remaining focused on our three priorities, namely, safeguarding our employees, servicing our customers’ needs and protecting our business for the future. There remains considerable uncertainty in the marketplace and we expect the cautious tone to persist. We appreciate our entire team’s effort and commitment to supporting our valued customers during this challenging time.”
While some recovery phased in during the quarter, revenues were still below prior year levels. Product support and rental revenues were lower by 3 percent and 11 percent respectively. Equipment sales were lower by 6 percent, reflecting lower new equipment sales across most markets.
Toromont’s Equipment Group, which makes up about 90 percent of the company’s business, revenues were down $46.8 million or 5 percent to $834.7 million for the quarter and $141.6 million or 6 percent to $2.3 billion year-to-date on reduced economic activity. New equipment sales, product support and rental activity were lower across all geographic markets and product groups. Operating income was down $0.8 million or 1 percent to $103.4 million in the quarter on lower revenues and gross profit margins. Operating income margin increased 60 basis points to 12.4 percent reflecting a lower expense ratio, due in part to a $6.5 million government wage subsidy in the current year.
“While market activity improved somewhat from the second quarter, it remained below last year’s level,” added Medhurst. “The diversity of our geographical landscape and markets served, extensive product and service offerings, and financial strength together with our disciplined operating culture, continue to position us well for the long term. We are very proud of our team’s ability to navigate through this pandemic and protect the interests of our employees, customers and stakeholders.”
Toromont is the parent company of Battlefield Equipment Rentals, No. 14 on the RER 100.
