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Finning sees mixed results in Q3 report


November 13, 2014
By Rock to Road

finningcatNovember 13, 2014, Vancouver, B.C. – Finning International
reported mixed results in the third quarter 0f 2014, as record product support
revenues could not offset the decline in new equipment sales.

finningcatNovember 13, 2014, Vancouver, B.C. – Finning International
reported mixed results in the third quarter 0f 2014, as record product support
revenues could not offset the decline in new equipment sales.

 

Product support revenues grew by 4% to record levels, driven
primarily by higher parts sales in Canada. However, that came as overall revenues
of $1.7 billion declined by 6% as a result of lower new equipment sales in
Canada and South America compared to very strong deliveries last year in
Canada.

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"Canada delivered a strong quarter, marked by improved
profitability and return on invested capital. I am very pleased with the
progress we are making on our operational priorities and the pace of
transformation in our Canadian operations," said Scott Thomson, President
and CEO of Finning International. "At the same time, we are managing
through a challenging macro-economic environment in South America, where our
results were negatively impacted by lower revenues and a number of one-time
charges. We continue to take steps to control costs and invested capital in the
region to maintain profitability.”

 

In Canada, EBIT of $80 million rose by 5%, despite a 10%
decline in

revenues compared to Q3 2013, which benefited from significant
mining deliveries. EBIT margin improved to 9.2%, reflecting continued progress
on the supply chain and service profitability initiatives, as well as a shift
in revenue mix to product support.

 

Canada's return on invested capital (ROIC) improved to 16.8%
from 15.9% in Q3 of last year; however, the consolidated ROIC declined to 15.4%
from 15.8% in Q3 2013, as a higher ROIC in Canada has been offset by lower ROIC
in South America due to reduction in activity levels and the ERP write-off.


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