Finning International, the largest Caterpillar dealer, has reported a net loss for 2015, and its chairman has stepped down.
The Canada-headquartered company reported a 24% year-on-year fall in revenues for 2015 to CA$2.19 billion (€1.44 billion) and a net loss of CA$161 million (€106 million), compared to net income of CA$504 million (€330 million) in 2014.
Finning was hit by losses of CA$349 million (€229 million) in the fourth quarter, driven by impairments at its South American operation. The company also reported reduced market activity in all sectors in South America, with revenues down 11% for the region.
Meanwhile, group-wide full-year revenues from equipment rental were down 18% compared to the previous year to CA$293 million (€192 million) – a result of the weaker short-term rental market and increased competition in Finning’s Canadian operations, according to the company.
It added that its rental revenues in South America and the UK & Ireland were largely unchanged year-on-year.
Finning said its global workforce had been reduced by around 13% in 2015, with an additional reduction of up to 500 people planned by mid-2016. The company is targeting CA$150 million (€98 million) in cost savings.
Finning chairman Doug Whitehead said he would step down at the company’s annual general meeting in May this year. Mr Whitehead has been chairman since 2008, and will remain on the board of directors if he is re-elected.
Mike Wilson has been lined up to succeed Mr Whitehead as chairman. Mr Wilson joined Finning's board in January 2013, bringing decades of executive leadership experience, most recently as CEO of Agrium.
Finning also announced that Stuart Levenick would join the company’s board from March this year. Mr Levenick enjoyed a 37 year career at Caterpillar, which included 10 years as group president prior to his retirement from the company.
Commenting on Finning’s annual results, CEO Scott Thompson said the company was not immune to the challenges facing its customers across key markets and geographies.
“Our performance in the fourth quarter was impacted by a number of one-time items, which reflect the difficult realities of our marketplace.
“We enter 2016 with the journey to transform our business well underway. Our business model is robust. We remain committed to delivering greater customer value. And we have clear plans to improve our operating results.”