Hewden recovery 'progressing well' but still no decision from Finning

24 February 2010

Finning International is still considering whether to sell its UK rental subsidiary Hewden and will announce its decision by the end of the second quarter.

It said it had received enquiries from a number of potential buyers but added that it may still retain the business and that Hewden's recovery plan was "progressing well".

Finning's UK business, which includes Hewden, saw sales fall 29% in the final quarter of the year as difficult market conditions continued. Rental revenues fell by 20% compared to the same quarter in 2008. Hewden made a loss before tax and interest of C$10 million in the quarter.

The UK rental business reported revenues for the full year 2009 of C$238.1 million, down 33% from C$357.4 million in 2008. Finning's rental businesses in Latin America and Canada fared a little better: revenues in Canada were down 24% to C$296.6 million, and in Latin America fell 18% to C$47.9 million.

Total group revenues in the fourth quarter were 28% down to C$1.13 billion with net profits down 64% to C$16 million. Sales for the year were C$4.7 billion, down 20.9%.

Mike Waites, president and chief executive officer of Finning International, said the company was seeing signs of recovery, led by mining; "Quoting activity is strong, notably in South America, and our backlog has posted the first increase since 2008."

Mr Waites said the company was on track to reduce its annual costs by C$200 million and that, combined with a free cash flow of C$494 million in the year, "give us a great deal of flexibility and position us well for growth."

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