Finning narrows options on Hewden
By Murray Pollok18 November 2009
Mike Waites, Finning's president and chief executive officer, said Caterpillar was aware of the review and that the Cat board had "given us the nod to consider all options." He added; "The review is proceeding well and we intend to reach our decision by year end."
Finning has not provided any more information, although the reference to retaining Hewden in a smaller form could mean the disposal of certain parts of the rental business unrelated to Caterpillar equipment, such as cranes, portable accommodation or aerial platforms.
Hewden's revenues for the third quarter were down 29.3% in local currency to C$59.5 million (€37.8 million), "affected by weak economic conditions in the UK." Finning UK's Caterpillar dealership saw new equipment sales fall by 37.1%, again in UK currency terms. Finning UK posted a loss before interest and tax (EBIT) of C$1.8 million (€1.1 million).
Overall, Finning reported sales down 27% to C$1.1 billion (€0.7 billion) and net profits of C$22 million (€14 million), down 66% compared to the same quarter in 2008.
"It was a tough quarter. Challenging economic conditions affected our business more severely than we had expected," said Mr Waites, "We have generally held and, in some cases, increased market share. Our South American operations continued to deliver strong results. However, Canada's revenue declined in all lines of business and the UK Group experienced difficult markets."