Finning International boosted revenue 10 percent to $1.329 billion in the third quarter, driven by continued growth in new equipment sales in all operations and record product support revenues in South America, the U.K. and Ireland. Canadian revenues were weaker as a result of a five-week strike in British Columbia.
Equipment rental for the company jumped 22 percent worldwide in the quarter, from $71.8 million a year ago to $87.9 million.
"Our third-quarter results continue to reflect strong market conditions in our core businesses,” said Mike Waites, president and CEO, Finning International. “We posted higher new equipment sales in all operations and achieved outstanding product support revenues in South America and the U.K. and Ireland. Importantly, we demonstrated improved operating leverage in South America, where EBIT reached a new record, and our operations in the U.K. and Ireland more than tripled their EBIT contribution from a year ago. The functionality of our ERP system in Canada has improved considerably since go-live, and I am confident the system will deliver the expected operational benefits and support our growth objectives. As we continue to execute on our long-term strategy, I am optimistic about our growth opportunities going into 2012. Discussions continue with Caterpillar regarding the potential acquisition of the Bucyrus distribution business."
Finning said its outlook for mining, construction and power systems markets for 2012 and 2013 remains solid, and the strong backlog provides good visibility into 2012 business levels. The company remains committed to driving profitability improvements in all operations and achieving its 10 percent EBIT margin target in 2013.
In Canada, third-quarter revenues increased 4 percent from Q310. A 15-percent hike in new equipment sales was partly offset by a 10-percent decline in product support revenues, which were negatively impacted by the five-week strike and issues regarding implementation of the company’s new ERP system. The company expects its fourth-quarter performance in Canada to improve.
Last month Finning named Andy Fraser president of Finning Canada. Fraser has held a variety of senior roles during his 30 years with Finning. Most recently he served as executive vice president, power systems and global business development for Finning International.
Finning is the world’s largest Caterpillar dealer, with operations in western Canada, U.K., Ireland, Chile, Argentina, Bolivia and Uruguay. Its Canadian rental operation, based in Edmonton, Alberta, Canada, is No. 9 on the RER 100.
