November 12, 2015 - 7:09 AM
VANCOUVER - Finning International, the world's largest Caterpillar heavy equipment dealer, has announced it will lay off 1,100 people in several countries, representing eight per cent of its workforce.
The job cuts will include 440 people in Western Canada, 550 in South America and a smaller number in Europe where the Vancouver-based company has operations in the United Kingdom and Ireland.
Combined with previous downsizing efforts, Finning is on track to cut its global workforce by 1,900 in 2015, including 1,100 in Canada.
Finning also said Thursday that 11 locations in Western Canada will close, on top of 16 shutdowns that were previously announced.
"While these are difficult decisions, we believe we are taking the right path to adjust our business to market realities and ensure financial strength, while simultaneously positioning Finning to deliver customer service more effectively and efficiently over the long-term," CEO Scott Thomson said in a statement Thursday.
Finning sells heavy equipment used in the mining and energy sectors, which have been hit by a sustained drop in commodity prices.
In its latest results released Thursday, the company said new-equipment sales dropped by 27 per cent between its second quarter and its third quarter ended Sept. 30.
The third-quarter financial report also showed that revenue was down 10 per cent from a year earlier to $1.5 billion from $1.67 billion. Net income fell 42 per cent to $33 million from $57 million. But free cash flow, which is what's left after providing for servicing debt, increased 28 per cent to $140 million from $109 million.
"Our focus on managing the factors within our control has contributed to preserving a strong balance sheet and allowed us to improve profitability in our Canadian operations on a quarter-by-quarter basis throughout 2015 despite a very challenging business environment," Thomson said.
"Being able to achieve these outcomes under current market conditions gives me confidence that we will be well-positioned when demand strengthens."
News from © The Canadian Press, 2015