Vancouver, B.C.-based Finning, one of the world’s largest Caterpillar dealerships, posted CDN $2.137 billion in second quarter revenue, compared to $1.729 billion in the second quarter last year, a 23.6-percent increase. Net revenue for the quarter was $1.995 billion, compared to $1.729 billion in the year-ago quarter, a 15.4-percent hike.
Finning was driven by higher revenues in all its regions and lines of business and was helped by the contributions from last year’s acquisition 4Refuel, which provided $28 million in net revenue.
Rental revenues in Canada hiked 21 percent, driven by power systems projects. Used equipment sales were up 36 percent, with strong sales especially in the mining sector. New equipment sales jumped 24 percent, with strong growth in all operations. Product support revenues increased 6 percent, driven by Canada. Canada’s new equipment revenues were up 24 percent, mostly from large mining equipment deliveries in the oil sands and higher sales in construction, particularly in Alberta. Product support revenues increased 7 percent with strong demand for parts, component changeouts, and rebuilds in mining.
In South America, net revenue jumped 10 percent, driven by a 32-percent leap in new equipment sales, mostly from higher mining equipment deliveries in Chile. In Argentina, business remained soft mostly because of political uncertainties. However, profitability improved because of restructuring measures in late 2018. In the U.K. and Ireland, net revenue was up 11 percent, with a 16-percent hike in new equipment sales, driven by deliveries to electric power projects and robust activity in industrial power systems markets. Construction sales also increased from the second quarter of 2018.
For the quarter, worldwide, equipment rental jumped 9 percent from $57 million to $62 million. For the first six months of the year, equipment rental leaped 12 percent from $107 million to $120 million.
“We are pleased with strong equipment sales in all our regions,” said Scott Thomson, president and CEO of Finning. “While we have not seen the benefit of large infrastructure projects or mining investment yet, we are capturing share in competitive markets. We expect continued growth in product support as product support revenues in Chile are back to normal run rates and demand in Canada remains healthy. Our strong second quarter results reflect continued focus on managing our cost base, improving the velocity of our supply chain, and leveraging digital technologies to support our customers with their productivity goals. Our priorities are to continue to improve South America’s profitability through the second half of 2019 and generate higher returns on invested capital in all our regions.”
Finning is No. 24 on the RER 100.