VANCOUVER — Finning International Inc. (TSX:FTT) said Wednesday it expects 2010 revenues to be down slightly from 2009 levels while earnings for the new year are forecast to see a modest increase.
The world’s largest Caterpillar equipment dealer said it expects to see lower new equipment sales in 2010, but predicts these will be partially offset by modest increases in product support revenues.
“Our sense is the economy is bottoming,” said Mike Waites, Finning’s president and chief executive officer. “We have a very strong company with a leaner cost structure. And we are driving further improvements in operations to take full advantage of growth going forward,” he added.
Finning said it expects business conditions to improve later in 2010 which leads it to anticipate earnings for the year to be up modestly over 2009.
The company’s fortunes depend a lot on conditions in the mining, construction and oilsands industries, which are major puchasers of its giant trucks, graders, engines and compression equipment.
The company said it expects to generate more than $200 million of free cash flow in 2010, with a net debt to total capital ratio falling to between 35 per cent and 40 per cent by the end of next year.
“The strong free cash flow and balance sheet will position the company well to take advantage of future opportunities,” Finning said.
Vancouver-based Finning sells, rents and services heavy equipment and engines. The company employed 13,600 people around the world at the end of 2008 and had annual revenues of just under $6 billion.
In Canada, the company operates in British Columbia, Alberta, the Yukon Territory, the Northwest Territories and Nunavut. Internationally, Caterpillar has businesses in Argentina, Bolivia, Chile, Uruguay, and the United Kingdom.
In trading on the TSX, shares of the company dropped 29 cents or 1.8 per cent to $15.90.