Revenues down in Finning’s second quarter
By Andrew Macklin
August 8, 2015 – Finning International Inc. reported a decline in second quarter revenues, driven by lower activity levels in Canada and South America.
Revenues of $1.7 billion decreased by six per cent from Q2 2014. New equipment sales were down 18% reflecting lower demand from mining in South America and reduced construction and mining activity in Canada. Consolidated product support revenue was up slightly from Q2 2014, but down modestly in functional currencies.
“We remain focused on operating with discipline and managing through tough market conditions in Canada and South America. Company-wide cost reductions, including rationalization of our workforce and facilities network, enabled us to achieve sequential improvement in operating margins across all our regions. Going forward, we will continue to drive cost discipline and sustainable operating improvements to position Finning for long-term value creation when markets recover. For 2015, we continue to expect strong free cash flow driven by continued reductions in equipment inventory and tight controls over spending. Our healthy balance sheet and strong free cash flows have allowed us to fund the Saskatchewan acquisition and to begin repurchasing our shares. We consider share buybacks to be an effective use of excess cash when our shares are trading at a significant discount, and expect to continue repurchasing shares in step with free cash flow delivery,” said Scott Thomson, president and chief executive officer of Finning International.
Among the highlights of the second quarter was that, effective July 1, 2015, the Company completed the previously announced acquisition of the operating assets of the Caterpillar dealership in Saskatchewan, and has successfully transitioned the business into Finning Canada operations.
“I am pleased to welcome our new Saskatchewan employees to Finning. The transition of the Saskatchewan dealership to our Canadian operations has been successful due to a great team effort,” concluded Mr. Thomson.