Major Caterpillar dealer Finning International’s CEO Kevin Parkes says the company is “committed to growing our business in 2024” after it grew 2023 full-year revenue by 16% to C$9.54 billion and net income by 4% to $523 million.
“As we look ahead, 2024 will be a year of execution where we are focused on growing our business in a moderating growth environment through driving product support, building full-cycle resilience by unlocking invested capital, and delivering sustainable growth in used, rental, and power systems,” Parkes said.
Finning is a regional Caterpillar dealer in western Canada, South America and the UK and Ireland.
“Our outlook for Western Canada is positive,” Parkes said.
“While the completion of major pipelines has slowed some construction activities in the near-term, it creates additional capacity to move heavy oil and liquefied natural gas to end markets, and we expect to see increased activity in the energy sector and production growth going forward.
“Our mining and energy customers are expected to increase spending levels, including investment to renew, maintain, and rebuild aging fleets. In the oil sands, based on customer commitments and discussions, we anticipate strong demand for product support, including component remanufacturing and rebuilds.
“In Chile, our strong outlook is underpinned by growing global demand for copper, the recent approvals of large-scale brownfield expansions, and increasing customer confidence to invest in brownfield and greenfield projects. Mining activity is expected to remain strong, driving demand for equipment, product support, and technology solutions.
“In the Chilean construction sector, we continue to see healthy demand from large contractors supporting mining operations, and we expect infrastructure construction to remain stable. In the power systems sector, activity remains strong in the industrial and data centre markets, and we are well positioned to benefit from growing demand for electric power solutions.”
Amid continuing economic and political uncertainty in inflation and corruption riddled Argentina, Parkes said Finning had taken action to significantly reduce its financial exposure in the country and would be taking “a low-risk approach” in 2024.
“In Argentina, steps are being taken by the new government to rapidly address the fiscal imbalances in the country with the goal of ultimately stabilising inflation and opening the economy for free import and export of goods in the long-term,” he said.
“However, the near-term steps of significantly devaluing the currency, containing public spending, reducing subsidies, and lowering spending on public works are driving continued challenging market and operating conditions.
“The Q4 environment was very challenging.”
Finning’s 2023 Q4 revenue overall was flat yoy at $2.7 billion.
Excluding significant items adjusted EBIT was up 9% yoy to $232 million.
Finning said its equipment order backlog was $2 billion at December 31, 2023, compared with $2.3 billion at the end of September due to strong deliveries outpacing order intake in Q4 2023.