Vancouver, Canada-based Finning, the world’s largest Caterpillar dealer, posted CDN $2.332 billion in first quarter 2024 net revenue, compared to $2.144 billion in the first quarter of 2023, an 8.8-percent increase. Rental revenue was essentially flat, from $75 million in Q123 to $74 million in the just concluded quarter. Used equipment sales leaped from $92 million in the first quarter of 2023 to $135 million this year, a whopping 47.8-percent jump, while new equipment sales surged from $624 million to $779 million, a 24.8-percent hike.
“We are pleased with our new equipment deliveries in the quarter,” said Kevin Parkes, president and CEO. “Combined with the strong execution of our used equipment strategy, we continue to build equipment population, while also demonstrating resilience and helping offset the impact of lower product support revenue in the quarter.”
Parkes also expressed satisfaction with “strategically important wins in each region,” including contracts with multiple copper mines in Chile, the oil sands in Canada and data centers in the U.K. and Ireland. “These wins represent over $700 million of new equipment orders received in April, which bolster our backlog and demonstrate increasing customer confidence in their markets and our partnership,” Parkes said.
First quarter EBIT of $202 million was down 7 percent from adjusted EBIT in Q123, primarily driven by the shift in revenue mix to new and used equipment sales.
In Canada operations, net revenue was up 9 percent, driven by new and used equipment sales. In April, Finning received an order from an oil sands operator to supply 20 Caterpillar ultra-class trucks.
In South America, net revenue increased by 9 percent, led by new equipment sales, which jumped 20 percent. In U.K. and Ireland operations, net revenue increased by 3 percent, driven by used equipment sales, which nearly doubled year over year.
Outlook for 2024
Finning expects a strong year in Western Canada. While the completion of major pipelines has slowed some construction activities in the near term, it creates additional capacity to move heavy oil and liquefied natural gas to end markets, and Finning expects increased activity in the energy sector and production going forward. It expects its mining and energy customers to increase spending levels and for federal and provincial governments to boost infrastructure development.
Finning also expects increased opportunities in its power systems business.
In Chile, Finning expects healthy demand from large contractors supporting mining operations. In Power Systems, activity remains strong in the industrial and data center markets, driving growing demand for electric power solutions.
In the U.K. and Ireland, Finning expects demand in construction to remain soft, but expects a growing contribution from used equipment and power systems where quoting activity remains strong driven by healthy demand for primary and backup power generation.
