WesternOne recorded first quarter consolidated revenue from continuing operations of $26 million compared to $22.3 million in the first quarter of 2016, a 16.5-percent leap. The increase was primarily related to a comparatively colder winter season in Alberta, leading to a general rise in heat-related rental volume and fuel sales. Heat-related services to major project customers also contributed to the revenue growth, resulting in an increase of 66.1 percent in service revenues compared to the same period a year ago.
First quarter gross profit and adjusted EBITDA were $10.7 million and $6.1 million respectively, compared to the respective amounts of $10.3 million and $6.2 million in the first quarter of 2016. Despite the revenue growth, changes in gross profit and adjusted EBITDA were minimal because of challenges with rate-driven competition and supply-related factors that continued to weigh on operating margins.
Earlier this month, WesternOne completed its exit from the modular manufacturing and rental businesses with the closing of the sale of that operation for $2.5 million.
“We are pleased with the year-over-year growth in Q1 revenues as a result of our strategic focus on growing and servicing major project customers with the construction heat markets, along with favorable impact from cold temperatures, which bolstered rental and related service activity levels,” said Peter Blake, CEO of WesternOne. “The market remains challenging, however, with rate compression brought on by competition and an oversupply of fleet equipment. To maintain market share and competitiveness, we will continue to focus on effectively redeploying rental fleet to targeted markets and managing capital returns and liquidity.”
WesternOne Rentals & Sales, based in Vancouver, B.C., Canada, also provides equipment rentals, especially to the aerial market. The company is No. 57 on the new RER 100.
