November 18, 2008

Finning International foresees slower sales of construction equipment

VANCOUVER

Finning International Inc., the world’s biggest seller and renter of Caterpillar heavy equipment, lowered its 2008 earnings guidance, due to a slowdown in some of its businesses in Western Canada and the United Kingdom.

However, president and CEO Mike Waites believes the company will weather the downturn better than other firms.

Waites said demand for new equipment will likely soften and some purchases may be deferred, but that will result in an increase in its parts and service business — Finning’s most profitable business.

“My nose is telling me that this (softening) is likely to be in the smaller equipment, building construction products, maybe some mid-sized product, but the heavy construction, mining business should continue to be very strong for us,” Waites said.

Vancouver-based Finning reported third-quarter net income of $64.8 million compared to $63.6 million for the same quarter last year.

Revenues in the quarter ended Sept. 30 were a record $1.46 million, compared to $1.33 million.

Finning said new equipment and engine sales were up 12 per cent and parts and service revenues were up 15 per cent compared with the same period last year.

Its order backlog has also grown to a new record of $2 billion, dominated by mining equipment, “and provides good revenue visibility for 2009 and into 2010.”

Canadian Press

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