August 7, 2014, Vancouver, B.C. – Finning International posted
strong second quarter financial results thanks, in part, to strong new equipment
sales in Canada.
August 7, 2014, Vancouver, B.C. – Finning International posted
strong second quarter financial results thanks, in part, to strong new equipment
sales in Canada.
Second quarter revenues increased by nine per cent to $1.8
billion thanks to strong sales in Canada, Ireland and the U.K. Product support
revenues grew by four per cent, primarily as a result of stronger parts sales in
Canada.
Canadian results
Revenues were up 21% as market activity was strong across
most segments in Western Canada. New equipment sales rose by 55%, driven
primarily by mining deliveries, and were also higher in construction and power systems.
Product support revenues increased by 6%, reflecting higher parts sales in all
sectors, most notably in mining.
Gross profit margin declined compared to Q2 2013 due to a
significant shift in revenue mix to new equipment sales (44% vs. 34% in Q2
2013) and a higher proportion of mining equipment and parts in the sales mix
which typically return a lower margin. SG&A expenses increased modestly despite
strong revenue growth. EBIT rose by 26% to $77 million and EBIT margin improved
to 8.3% from 7.9% in Q2 2013, reflecting higher revenues and progress with the
execution of operational improvement initiatives.
Invested capital increased by about $75 million from the end
of March primarily due to lower accounts payable and higher investment in
rental equipment. Inventory levels remained comparable to Q1 2014 with higherrevenues,
reflecting progress on the implementation of supply chain initiatives and
strong equipment deliveries in Q2. Invested capital turnover improved to 2.20
times from 2.11 times in Q1 2014 and 2.03 times in Q4 2013.
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