Finning rentals down 20% as Hewden falls 28.9%

By Patrick Hill15 May 2009

First quarter 2009 rental revenues for Finning International Inc were C$140.2 million (€88.33 million), down 20% on the same period in 2008.

UK rental revenues for the quarter - primarily from subsidiary Hewden - were $60.0 million (€37.8 million), down 38.7% from the previous year. The decline was 28.9% in local currency.

Finning's rental revenues were 10.3% of the company's total $1.36 billion (€ 857 million) sales in the period, compared to 12.4% of first quarter 2008 revenues of $1.430 billion (€ 901 million).

Rental activity in Canada in the quarter was $66.7 million (€ 42.0 million), down 2.9% from $68.7 million (€43.3 million) in 2008. Revenues were $13.5 million (€8.50 million) in South America, 4.2% less than the $14.1 million (€ 8.88 million) in the period in 2008.

Finning said it expected that challenging global economic conditions will continue to impact business levels. Business conditions in the UK "remain challenging", said Finning, "[and] for Hewden, the UK equipment rental market continues to be very soft and the industry remains oversupplied and very price competitive."

Finning's net profit for the quarter was $45.0 million (€28.4 million) compared to $70.8 million (€44.6 million) in the first quarter of 2008. During the quarter, the Canadian dollar was 24.0% weaker relative to the US dollar and 10.1% stronger than the UK pound sterling, compared to the same period last year, increasing revenues approximately $123 million (€77.5 million), or 9%.

Other adjustments included a $14.7 million (€9.26 million) pre-tax gain on the sale of Hewden properties and costs of approximately $2.5 million (€1.6 million) to restructure Hewden's depot network. These followed a full goodwill impairment charge of $151.4 million (€95.38 million) for Hewden in the fourth quarter of 2008.

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