31.08.2004

Finning hit new sales records

Finning International Inc, the parent of Hewden Stuart, the UK’s second largest crane hirer and second largest powered access rental company as well as Finning UK the Caterpillar dealer, has announced its second quarter and half year results for 2004.

Sales revenues hit new records, with a 15 percent rise for the first six months and up by 20 percent in the last quarter. The six month revenues for the group were C$ two billion (£823 million).
Much of the increase was down to commodity price rises from the company’s South American and Canadian mining operations as well as the additional revenues from the Lex Harvey purchase in the UK in 2003.

Revenues for Hewden for the same period were C$341 million (£140 million) up by almost five percent on the first six months of 2003.

Net income for the businesses was a different story with profits continuing to fall at the consolidated level. For the group six months NI was C$52 million (£21 million) a fall of 23 percent on 2003 in spite of the substantial rise in revenues.

Looking at Hewdens earnings before interest and tax were C$16.9 million (£seven million) up by 12 percent on last year in spite of higher costs and depreciation.

The accounts also reveal the previously non disclosed cost of settlement for the Canary wharf tower crane accident (see Vertikal.Net July 9th 2004). The statement reads as follows:

“In June 2004, Hewden Tower Cranes Limited, a subsidiary of the company settled its legal claim with Yarm Road Limited and
Cleveland Bridge U.K. Limited for damages arising from the
collapse of a tower crane at the Canary Wharf site in the U.K. on
May 21, 2000. The final settlement amount totaled £4.875 million in full and final settlement of any claims, counter claims, cross claims or contra charges including interest and costs and incorporating the earlier adjudication award of £1.5 million in January 2004.

In addition, Hewden was responsible for the costs of the adjudication, trial and independent legal advice of approximately £293,000. An amount of £3.168 million pre-tax, net of previous accruals, was charged to the income statement as "other expenses" in the second quarter of 2004”.


Doug Whitehead, President and CEO of Finning International Inc.
said: "In the second quarter of 2004, Finning achieved the
highest quarterly revenue in its history, exceeding the one
billion dollar level. Our well-timed, accretive 2003
acquisitions, strong commodity prices and economic factors that
positively impacted our customers contributed to our solid
quarterly performance.

The combination of strong commodity prices, a record backlog, and our focus on cost savings and process reengineering provide an excellent platform for future earnings growth."

The full cost of the Lex Harvey acquisition has now been recorded following final settlements etc.. it was C$212.7 million (£87.5 million).