Rental revenues slip at Toromont
By Helen Wright27 July 2016
Canadian company Toromont, which owns several large Caterpillar dealerships, has reported a 3% year-on-year dip in rental revenues in its equipment division for first six months of 2016 to CA$90 million (€62 million).
It said a lower rate environment following a slow start to the year was to blame, with heavy and power rental segments reporting lower revenues - heavy equipment rentals were down 14% year-to-date, while power rentals were down 7% year-to-date.
In contrast, it saw increases in rental revenues from light equipment (up 2% in the first half) and said this was partly due to the addition of two new rental stores last year, while same-store growth was stable for the first half year-on-year.
Toromont said it spent CA$51 million (€35 million) on net rental fleet additions for the six months ended 30 June, compared to CA$76.8 million (€53 million) for the same six months in 2015.
Overall, Toromont’s equipment division revenues were up 6% year-on-year in the first half to CA$769 million (€530 million), of which used equipment revenues jumped 23% to CA$117 million (€81 million).
Toromont said used equipment sales had grown to record levels, fuelled in part by increased rental dispositions and through increased purchasing of used by Toromont to meet customer demands.
It said that the increased price of new equipment on the weaker Canadian Dollar had led to used equipment being sought out by customers seeking a lower cost option.
Toromont’s equipment division’s operating income was up 6% in the first half to CA$81.7 million (€56.4 million).