Finning International, one of the world’s largest Caterpillar dealers, posted CDN $1.729 billion in revenue in the second quarter compared to $1.584 billion in restated revenue in the second quarter of 2017, a 9.2-percent increase. EBITDA improved from $146 million in Q217 to $171 million, a 17.1-percent incline.
Canadian revenues increased 15 percent, reflecting strong market activity, and EBIT margin improved by 150 basis points to 8.5 percent, driven by leverage on fixed costs. South America revenues increased by 11 percent in functional currency, driven by 24 percent revenue growth in Chile. Adjusted return on invested capital was 14.2 percent, the company’s highest since Q215.
Rental revenues increased by 6 percent. New equipment sales jumped 12 percent, driven mostly by higher sales in construction and mining in Canada. Product support revenues grew 11 percent because of improved customer activity in the Canadian construction and South American mining industries. Used equipment sales dropped 19 percent, reflecting a tighter supply environment.
“I am pleased with the strong earnings leverage and improved return on invested capital we delivered this quarter,” said Scott Thomson, president and CEO of Finning International. “We expect positive market momentum to continue in our key regions. Significant infrastructure projects in Western Canada and the mining recovery in Chile are expected to provide further upside in 2019. Our focus remains on growing our business in a profitable and capital-efficient manner.”
Finning is Caterpillar dealer in British Columbia, Yukon, Alberta, Saskatchewan, Northwest Territories, and part of Nunavut in Canada. In South America it covers Argentina, Chile, and Bolivia. It also covers the United Kingdom and Ireland. Finning is a major rental player as well, No. 20 on the RER 100.
