Stronger first half for Toromont Industries

Canadian company Toromont’s Equipment Group, which owns several large Caterpillar dealerships, has reported a strong first half fuelled by demand for rental, new and used equipment.

For the six months to 30 June, 2014, Equipment Group revenues were up 8% year-on-year to CA$632 million (€435 million).

Of this, rental revenues represented CA$91 million (€62.7 million), up 9% year-on-year. Toromont said light equipment rentals increased 6% for the first half, while heavy equipment rentals were up 16% and power rentals grew 81% on high demand.

It added that rental equipment with a purchase option decreased marginally in the first six months of 2014 (down 3%) mainly due to the slower start experienced at the beginning of the year.

Rental rates were fairly consistent year-on-year, according to the company.

Meanwhile, used equipment revenues were up 21% to CA$78.1 million (€67.5 million) and revenues from new equipment grew 3% to CA$236 million (€162 million).

Equipment Group operating income for the first half was up 9% year-on-year to CA$63.5 million (€43.7 million).

During the first half, Toromont invested CA$49.6 million (€34.2 million) in its rental fleet, compared to CA$45.9 million (€31.6 million) for the same period last year.

Improving conditions

“Continued investment in the rental fleet reflects strong demand on improved market conditions, the existing fleet age profile and continued expansion of heavy rental operations. Additionally, rental fleet investments generally occur during the first half of the year in advance of the busy rental period,” the company said.

Looking ahead, the company said competitive pressure in the Equipment market continued, exacerbated by a weakened Canadian dollar. Longer term, it said large infrastructure investment was expected to continue.