Toromont, parent company of one of the world’s largest Caterpillar dealerships, posted $849.6 million in the second quarter of 2020, compared to $978.3 million in 2019, a 13.2-decrease. The dip was primarily caused by lower economic activity caused by the response to COVID-19. April experienced the lowest activity levels, with some recovery phasing in through May and June, although still below 2019 levels. Rental revenues were lower by 31 percent, while product support revenues dipped 15 percent.
For the first six months of the year, revenue was $1,561.5 million, compared to $1,678.3 million, a 7-percent drop after a fairly strong first quarter before the pandemic hit. For the first half of the year, net earnings decreased $28.1 million or 24 percent and EPS was down 25 percent.
“From the start of the COVID-19 pandemic, Toromont has continued to focus efforts on three areas: safeguarding our employees, servicing our customers’ needs and protecting our business for the future,” said Scott Medhurst, president and CEO of Toromont Industries Ltd. “As a result of reduced economic activity, caused by the response to the COVID-19 pandemic, we experienced lower earnings and net income in the quarter. Revenue decline lessened as the quarter progressed while remaining below prior year levels. We appreciate our entire team’s effort and commitment to supporting our customers during this challenging time.”
The company maintained its very strong financial position. Leverage as represented by the net debt to total capitalization ratio was 12 percent at the end June 2020, compared to 15 percent at the end of December 2019, and 26 percent at the end of June 2019. Medhurst praised the company’s attention to safety of employees and customers.
“We are proud of our team’s ability to navigate through this pandemic and support our customers through the provision of essential services,” continued Medhurst. “Our Critical Incident Executive Response Team was activated at an early stage and continues to meet regularly to focus on developing trends and pronouncements, assessing best course of action and responding appropriately. The management and leadership teams continue to monitor the situation closely and are taking responsible measures to manage and protect the interests of our people and customers while managing the long-term health of the business. The diversity of our geographical landscape and markets served, extensive product and service offerings and financial strength together with a disciplined operating culture, position us well to weather this situation for the long term.”
Toromont Cat covers Manitoba, Ontario, Quebec, New Brunswick, Nova Scotia, Prince Edward Island, Newfoundland and Labrador, and Nunavut. Its Battlefield Equipment Rentals is No. 14 on the RER 100.
