The following is a summary of the Finning International Inc. (FINGF) Q1 2024 Earnings Call Transcript:
Financial Performance:
Finning International reported Q1 2024 net revenue of $2.3bn, an increase of 9% year-on-year, primarily due to new and used equipment sales.
Gross profit as a % of net revenue fell by 260 basis points due to a shift in sales mix.
Selling, General & Administrative expenses reduced by 130 basis points to 17.7% of net revenue.
Product support revenue was down 1% but used equipment sales increased by 48% and new equipment sales grew by 25%.
Earnings per share dropped by 5% mainly due to the shift in the mix to new and used equipment and lower margins.
Business Progress:
Robust demand in mining and power systems contributed to growth.
The company has launched FusEd Equipment, a platform specializing in selling used equipment globally.
Power system sales grew 37% year-on-year, and $700m of new equipment orders were secured for delivery in H2 2024.
Growth opportunities are being pursued in Chile, Canada, and the U.K. & Ireland.
An increased dividend shows commitment to returning capital to shareholders.
Finning plans to publish its 2023 sustainability report and continues to aim for improved safety, emission reduction, and customer support for decarbonization goals.
The company anticipates moderate order reduction due to improved availability of certain product lines and plans to unlock $450m of capital in H2 through inventory reduction and warehouse automation.
Through continuous evolution in the used equipment division and optimistic projections for the oil sands market, Finning demonstrates its strategic focus on business growth and resilience.
More details: FINNING INTERNATIONAL INC IR
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