Canadian Caterpillar Toromont Industries reported CDN $966 million in the fourth quarter compared to $822.8 million in the same period in 2017, a 17.4-percent increase. The results include the operations of Toromont’s acquisition of Hewitt, Caterpillar dealers in Quebec, the Maritime Provinces and Western Labrador as well as the MCFA lift truck dealership for Quebec and Ontario as well as other distribution rights.
As a result of Toromont’s addition of Toromont QM (the acquired dealerships) and having them as part of the company for all of 2018, for the full year, Toromont posted revenue of $3,504.2 million, compared with $2,350.2 million for the full year of 2017, a 49.1-percent surge.
“Toromont delivered solid results in the fourth quarter and full year of 2018,” said Scott Medhurst, president and CEO of Toromont Industries Ltd. “The Equipment Group recorded growth across its expanded territory and in most revenue streams. CIMCO, coming off a record year, continued to grow its product support business but faced specific challenges, which dampened their results.”
However, even without the acquisition, Toromont did well. Legacy Toromont net earnings increased $30.3 million or 17 percent with solid growth in the Equipment Group offsetting softer results at CIMCO (Toromont’s refrigeration division).
For the Equipment Group, revenues were up $1.1 billion to $3.2 billion for the year. Toromont QM contributed $1.3 billion for the year compared to $2426 million for the two-month period after the acquisition in late 2017. Legacy Toromont revenues were up $102.5 million or 6 percent on growth across most revenue streams.
Operating income rose $129.1 million for the year. In the legacy Equipment Group, operating income jumped $42.3 million or 20 percent and was up 160 basis points as a percentage of revenues (13.7 percent compared to 12.1 percent) the previous year, largely reflecting higher margins on higher revenues, partially offset by a higher expense ration. For the fourth quarter revenues increased $147.9 million to $873.9 million, with Toromont QM contributing an incremental $114.1 million, while the legacy Equipment Group revenues jumped $33.8 million or 7 percent with increases across most revenue streams.
Bookings in 2018 increased $524 million to $1.5 million, largely because of $508 million of incremental bookings at Toromont QM. Bookings in the legacy business increased 2 percent because of a large power systems order, along with higher construction and agriculture orders, offset by the impact of a large mining order in 2017.
“Infrastructure projects and broader construction activity continue to present opportunities for Toromont’s Equipment Group for equipment sales, product support and rentals,” said Medhurst. “Opportunities exist for equipment supply into the mining sector, especially in support of the replacement and expansion requirements at existing mine sites. Overall we are pleased with the progress achieved so far on the transition and integration fronts and remain cautiously optimistic about the significant potential which lies ahead.”
Toromont’s Equipment Group includes the Canadian provinces of Newfoundland & Labrador, Nova Scotia, New Brunswick, Prince Edward Island, Quebec, Ontario and Manitoba and most of the territory of Nunavut. It includes rental operations (Battlefield Equipment Rentals, No. 14 on the RER 100), a complementary material handling business and agricultural equipment.