The following is a summary of the Finning International Inc. (FINGF) Q4 2023 Earnings Call Transcript:

Financial Performance:

• Finning International's Q4 net revenue was $2.4 billion, up marginally from 2023.

• Adjusted EBIT and EPS were up 9% and 7%.

• The Q4 adjusted EPS of $0.96 brought the total for 2023 to $3.91.

• There was a foreign exchange loss of $56 million or $0.37 per share due to extreme currency controls in Argentina.

• A $12 million write-off was recorded related to decommissioning of low-ROIC IT systems.

• Growth in other lines of business offset a 4% decline in new equipment sales.

• Adjusted earnings per share increased by 20% YoY to an all-time high of $3.91.

• Adjusted return on invested capital in 2023 increased to 20%, led by their South American operations.

Business Progress:

• Positive outlook for Western Canada due to expected increased activity in the energy sector.

• Possible high returns from South America due to increased customer confidence and emerging policies in Chile and Argentina.

• Growth expectations from used equipment and power systems in the UK and Ireland despite soft new construction equipment demand.

• Plans to increase invested capital velocity to unlock $450 million of capital by 2025.

• Increased technical workforce by 7% in 2023 to support an increased number of product support contracts and a 14% YoY increase in demand for rebuilds.

• Continued growth in used rental and power systems businesses, with 60 ultra-class Caterpillar trucks delivered in Canada and Chile and 50 large mining trucks to contractors in 2023.

• Plans to prioritize cost and capital resources, improve free cash flow generation, and grow product support and used rental and power systems segments in 2024.

• Anticipated continued post-pandemic growth driven by commodity prices, supply chain improvements, and market share opportunities.

• Planned strategic investments, including in their cloud infrastructure, to support future sustainable growth.

More details: FINNING INTERNATIONAL INC IR

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