Finning International reported fourth quarter revenue of CDN $1.911 billion compared to CDN $1.842 billion in the fourth quarter of 2018, a 3.7-percent increase. Fourth quarter 2019 EBIT and EBITDA increased by 6 percent and 21 percent respectively from Q4 2018 despite lower consolidated revenue and the impact of the social unrest in Chile.
The company totaled $7.290 billion in net revenue for the full year compared to $6.996 billion in 2018, a 4.2 percent increase. Total revenue was $7.817 billion in 2019 compared to $6.996 billion in 2018, an 11.7-boost. The company posted $246 million in rental revenue in 2019, compared to $239 million in 2018, a 2.9-percent increase. In the fourth quarter rental revenue worldwide dropped from $64 million in the fourth quarter of 2018 to $55 million, a 14-percent skid.
Finning’s Canadian operations posted $3.927 in net revenue in 2019 compared to $ 3.674 billion in 2018, an 11.7-percent hike. For the full year, Finning Canada posted $164 million in equipment rental compared to $154 million in 2018, a 6.5-percent increase. Net revenue increased 2.6 percent year over year in South America, and dropped 1.3 percent in the United Kingdom and Ireland.
“We are pleased with 2019 results in Canada and the UK & Ireland which demonstrate improved execution, stable gross profit margins, disciplined cost management, and market share gains. However, a difficult year in South America resulted in flat consolidated earnings per share year over year,” said Scott Thomson, president and CEO of Finning.
In comments made before the dramatic business shutdowns as a result of the coronavirus, Thomson said, “In 2020, we expect to benefit from several profitability drivers, including improved execution in South America, a lower cost base in Canada, and reduced finance costs. We expect to generate strong free cash flow in 2020, driven by inventory reductions, lower working capital requirements, and continued improvements in our supply chain. We will prioritize maintaining our strong balance sheet and returning capital to shareholders through dividends and share repurchases.”
The world’s largest Caterpillar dealer, headquartered in Vancouver, B.C., Finning operates in Western Canada, Chile, Argentina, Bolivia, the United Kingdom and Ireland.
The Canadian operations sell, service, and rent mainly Caterpillar equipment and engines in British Columbia, Alberta, Saskatchewan, Yukon, the Northwest Territories, and a portion of Nunavut, and also provide mobile refueling services in British Columbia, Alberta, Saskatchewan, Manitoba, Ontario, Quebec, New Brunswick and Nova Scotia and in Texas, U.S.
Finning is No. 24 on the RER 100.
