Canada’s Wajax Posts Strong Fourth Quarter
Canadian national distributor Wajax posted CDN $376.6 million in revenue in the fourth quarter of 2017 compared to $313.7 million in the fourth quarter or 2016, a 20-percent increase. For the full year of 2017, Wajax reported revenue of $1,319.3 million compared to $1,221.9 million in 2016, an 8 percent jump.
Rental revenue in the fourth quarter was $8.7 million compared to $8 million in Q416, an 8.8-percent increase. For the full year, rental revenue was $31.9 million compared to $34.7 million in 2016, an 8 percent drop.
Regionally, in the fourth quarter, revenue increased 40 percent in western Canada and 14 percent in eastern Canada, while decreasing 1 percent in central Canada. The company said equipment sales increase primarily because of higher construction and material handling sales in all regions and higher forestry and engine and transmission sales in the west. The increases were partly offset by a decline in mining equipment sales in western and eastern Canada and a decrease in power generation sales in central Canada.
“We are satisfied with the improvement in our fourth quarter financial results,” said Wajax president and CEO Mark Foote. “As compared to the same period last year, we saw strong gains in the construction, forestry and engine and transmission categories and regional strength in our eastern and western Canada performance. We are also very proud to report that 2017 was Wajax’s safest year on record, based on a 33 percent reduction in recordable incidents and a Total Reportable Incident Frequency (TRIF) rate of 1.45.”
Foote said Wajax expects adjusted net earnings to increase, primarily from organic revenue growth.
“Given the corporation’s plans to increase market share in highly competitive categories, gross margins are expected to be under pressure. While Wajax will make planned investments in programs that advance the corporation’s strategy, an ongoing focus on overall cost productivity is expected to assist Wajax in managing expected margin pressure. Regionally, market conditions in central and eastern Canada are expected to be generally stable, and while conditions in western Canada may continue to improve in 2018, year-over-year gains are not expected to be as significant as they were in 2017.”
For the full year, revenue in western Canada increased 15 percent compared to 2016 with strong gains in construction and forestry and reductions in mining. Revenue in central Canada was flat, while revenue in eastern Canada increased 5 percent.
Wajax is headquartered in Mississauga, Ontario, Canada.
About the Author
Michael Roth
Editor
Michael Roth has covered the equipment rental industry full time for RER since 1989 and has served as the magazine’s editor in chief since 1994. He has nearly 30 years experience as a professional journalist. Roth has visited hundreds of rental centers and industry manufacturers, written hundreds of feature stories for RER and thousands of news stories for the magazine and its electronic newsletter RER Reports. Roth has interviewed leading executives for most of the industry’s largest rental companies and manufacturers as well as hundreds of smaller independent companies. He has visited with and reported on rental companies and manufacturers in Europe, Central America and Asia as well as Mexico, Canada and the United States. Roth was co-founder of RER Reports, the industry’s first weekly newsletter, which began as a fax newsletter in 1996, and later became an online newsletter. Roth has spoken at conventions sponsored by the American Rental Association, Associated Equipment Distributors, California Rental Association and other industry events and has spoken before industry groups in several countries. He lives and works in Los Angeles when he’s not traveling to cover industry events.