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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