Cat dealer Finning sees used equipment sales soar 122%
Toromont new equipment sales dropped 15% YoY in Q3
Canadian Caterpillar dealers Finning International and Toromont Industries saw used equipment sales and rental revenue climb in the third quarter amid industry tailwinds.
Finning’s results especially reflected Caterpillar’s strong Q3 performance. The manufacturing giant posted a 13.3% year-over-year increase in North American sales and revenue while demand surged for power-generation products, contributing to a 4.4% YoY spike in revenue for Cat Financial.
Finning order backlog grows 26%
Finning, the world’s largest Caterpillar dealer, saw total revenue increase 14% YoY to CA$2.8 billion ($2 billion), according to its Nov. 11 earnings release.
The company’s new equipment sales rose 12% YoY to $746.5 million, and used equipment sales soared 122% YoY to $142 million largely due to rental-to-sale conversions for mining equipment, Chief Financial Officer David Primrose said during today’s earnings call.
Rental revenue rose 5% YoY to $56.4 million, and gross profit increased 6% YoY to $439.6 million.
Finning’s order backlog grew 26.1% YoY to $2.1 billion as it “secured multiple large orders for key mining customers as well as in the power system sector related to gas compression,” Primrose said.
The company also benefited from the data center development boom, contributing to a $714.6 million order backlog for its power system business, up 23% YoY, Chief Executive Kevin Parkes said.
“In Canada, we continue to see healthy demand in gas compression and oil and gas segments with a long-term potential for data center development in Alberta,” he said. “In South America, power systems activities are steady, supported by data center growth in Chile and oil and gas activity in Argentina.”
Toromont used equipment sales climb 7%
Revenue for Toromont’s Equipment Group totaled $827.9 million in Q3, down 4.2% YoY, according to its Oct. 30 earnings release.
The company, which is among the largest Caterpillar dealers in Canada, reported a 15% YoY decline in new equipment sales to $324.9 million. Meanwhile, used equipment sales jumped 6.8% YoY to $57.7 million, “largely driven by improved activity in mining and construction markets,” CFO John Doolittle said during Toromont’s Oct. 31 earnings call.
Rental revenue rose 5.5% YoY to $107.5 million as the company expanded its fleet, and gross profit for Toromont’s Equipment Group increased 7.4% YoY to $122.2 million.
The equipment group’s order backlog grew 15% and “reflects deliveries in progress on construction schedules,” Doolittle said.
Editor’s note: All amounts have been converted to U.S. dollars.
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