Canada’s Finning Posts Record First Quarter

Finning International reported record first-quarter results with CDN $1,274.6 million (about U.S. $1,314 million) in total revenue, compared with $966.9 million in last year’s first quarter, a 32-percent increase. Equipment rental revenue totaled CDN $78.3 million (about U.S. $80.8 million), compared with $66.4 million a year ago, an 18-percent jump.

EBITDA totaled CDN $147.5 million, compared with $86.4 million a year ago, a 71-percent leap. Backlog increased by 20 percent compared with Dec. 31, 2010, topping $1.5 billion, the company’s sixth consecutive increase in quarterly backlog.

“Finning has made a tremendous start to the year with each of our operations firing on all cylinders,” said Mike Waites, Finning International president and CEO. “The market activity in the quarter increased faster than anticipated and the quarter exceeded our expectations all around. We continued to build on our product support momentum following a record year in 2010 with pent-up service requirements and increasing machine utilization driving demand.

“This quarter, once again, underscores the focused execution of our strategic priorities, included our ability to generate operating leverage. We have been diligent in improving our efficiencies and preparing to meet growing demand.”

Waites added that Finning expects revenues to grow by an average of 10 percent per year during the next three years.

The strongest increase in the first quarter was in new equipment sales, where revenues leapt 60 percent, with strong growth in all regions. Product support revenues grew 21 percent, particularly strong in Canada.

First-quarter revenues jumped 28 percent in Canada compared with the first quarter of 2010, with product support revenues a company record in the quarter. In the mining area, including the oil sands region, parts and service revenue growth is driven by the maintenance cycle for large mining equipment and growing demand for rebuilds. In heavy construction, product support revenues grew substantially as fleet utilization increased.

Based in Vancouver, B.C., Canada, Finning is the Caterpillar dealer for western Canada, the U.K., Ireland, Chile, Argentina, Bolivia and Uruguay. Its Canadian rental division, based in Edmonton, Alberta, is No. 9 on the new RER 100.

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