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Finning Posts Record Worldwide Revenue but Canadian Rental Drop in Q2

Finning International last week reported record quarterly revenue of CA $1.53 billion (about U.S. $1.44 billion), a 2.3-percent year-over-year increase compared with $1.497 billion in last year’s second quarter. Revenues for the first six months of 2008 were CA $2.96 billion, a 3.1-percent increase compared with last year’s first-six-months revenue total of CA $2.87 billion.

However, second-quarter earnings from continuing operations before interest and taxes (EBIT) were $108 million in the second quarter of 2008, a 12.3-percent year-over-year decrease compared with last year’s second quarter. Second-quarter net income from continuing operations was $67.2 million or $0.39 per diluted share, a 7.1-percent year-over-year decrease compared with last year’s quarter.

Revenues from Finning’s Canadian operations in the second quarter were the highest quarterly revenues ever recorded by the Canadian division, CA $849.1 million up slightly from the previous year’s second quarter total of CA $846.4 million. The high revenues reflect the continued strong market demand and growth in the mining sectors, particularly in the Alberta oil sands. South American operations increased revenues 15.1 percent in the second quarter, with strong customer support services and new equipment sales. Revenues jumped 13.4 percent in local currency for Finning’s U.K. operations, but when translated to Canadian dollars, the U.K. group revenues increased 3.6 percent year-over-year for the second quarter.

Equipment rental volume in Canada was CA $65 million, a 5-percent decrease from CA $68.6 million in last year’s second quarter. International rental volume dropped year-over-year in the second quarter, from CA $390.4 million in 2007 to $352.2 million in Q208, a 9.8-percent decrease. For the first six months of 2008, equipment rental in Canada was flat year-over-year, posting CA $134.1 million in 2007 and $133.7 million this year.

Finning is the world’s largest Caterpillar dealer with operations in western Canada, the U.K., Chile, Argentina, Uruguay and Bolivia. Based in Vancouver, B.C., Canada, Finning is No. 10 on the RER 100.

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