First quarter of 2024 a busy one for Finning as revenues jump 9 percent

Finning International has reported a strong start to the financial year, riding good equipment sales numbers to increased revenues through the end of March 2024.

Revenue for the first quarter reached $2.6 billion, while net revenue was $2.3 billion, both up 9 percent from the same period in 2023. Finning said those numbers were driven by equipment sales - new equipment increased by 25 percent, and used equipment was up 48 percent in the quarter. Product support slipped by 1 percent compared to the previous year.

Finning's equipment backlog of $2.0 billion was maintained at December 31, 2023 levels. Order intake in South America, the UK, and Ireland all outpaced deliveries in Q1, driven by mining and power systems.

Earnings per share for the first quarter were $0.84, compared to $0.89 in Q1 of 2023.

"I would like to thank our team for their dedication to serving our customers and diligently building execution momentum through our strategic plan. We are pleased with our new equipment deliveries in the quarter. Combined with the strong execution of our used equipment strategy, we continue to build equipment population, while also demonstrating resilience and helping offset the impact of lower product support revenue in the quarter," said Kevin Parkes, president and CEO. "We are pleased with our recent strategically important wins in each region, including contracts with multiple copper mines in Chile, the oil sands in Canada, and data centers in the UK and Ireland. These wins represent over $700 million of new equipment orders received in April, which bolster our backlog and demonstrate increasing customer confidence in their markets and our partnership."

New equipment sales in the Canadian market were up 39 percent, with strong volumes across all sectors, Finning reported. Conversions of rental equipment with purchase options to sales, along with stronger volumes, saw used equipment sales jump 37 percent. Net revenue was up 9 percent for the region. Product support revenue was down 4 percent, due to completion of major projects impacting construction customer activity levels. Challenging operating conditions also reduced equipment utilization hours in most sectors.

Finning is projecting continued good activity, especially in western Canada, where the energy sector is showing signs of growth. The completion of major pipelines is slowing some construction activities near-term, Finning states, but added capacity for movement of oil and gas products is expected to drive increased spending in the energy sector. An order for 20 Caterpillar ultra-class trucks from an oil sands operator in April, with delivery beginning in Q3 of 2024, is an indication of strong product demand.