(Photo Supplied: FINNING INTERNATIONAL)
Finning International is slashing 500 jobs across Canada in an effort to cut costs.
The company is the largest Caterpillar equipment dealer in the world.
Job losses come as the company made $107 million in the fourth quarter of 2014, a 15 per cent jump from the same quarter in 2013.
Job cuts equal to roughly nine per cent of the Canadian workforce.
“Our focus on cost and capital management will be integral to managing through the current lower oil price environment in Canada,” said Scott Thomson, President and Chief Executive Officer of Finning International in the company release. “In order to maintain profitability during soft market conditions, we are taking steps to align our cost base and invested capital to reduced demand, similar to actions we took in South America a year ago. While this is a difficult decision, it is a necessary step to adjust to expected business levels.”
Finning made $1.8 billion in revenues in the fourth quarter of 2014, an increase of $7 million from 2013.
Revenues were up 8 per cent higher in Canada driven by higher product support revenues, notably parts sales in mining.
New equipment sales increased by four per cent, driven by higher volumes in power systems.
Rental revenues were 12 per cent lower than last year, mostly due to increased competition in rental markets, as well as very strong demand in the fourth quarter of 2013.
Gross profit in Canada declined by three per cent from the fourth quarter of 2013, reflecting lower margins in all lines of business with the exception of service.
Invested capital decreased by about $240 million from the third quarter of 2014 due to lower working capital, including a lower parts inventory, and a decrease in rental inventory resulting from higher rental conversions.
Canada had the highest return on invested capital at a 17.1 per cent return, beating out South America, and the UK & Ireland. Canada’s positive numbers come as a result of improved capital efficiencies
