Canadian parcel, logistics and road transport group TransForce yesterday reported strongthird-quarter results, achieving double-digit profit growth alongside revenue increases of 3 per
cent, and said it would continue its “disciplined” acquisition strategy.Chairman, president and CEO Alain Bédard said the group’s Package and Courier,Less-than-truckload (LTL) and Truckload operations all reported further profitability gains, “despite a challenging market environment, driven by our constant focus on maximising return onassets”, while business in the energy sector slowed due to lower industry-wide activity.
Total revenue reached C$761.7 million (€591 million), while income from operating activities(EBIT) rose more than 17 per cent year-over-year to C$66.9 million, or 8.8 per cent of totalrevenue, “as our focus on optimising operating efficiency and asset utilisation continued togenerate superior results for our shareholders”, Bédard commented.
Approximately half of the year-over-year monetary increase in EBIT stems from successfulmeasures to optimise operations, while the other half is attributable to acquisitions. Acquisitionscompleted this year include Quik X Transportation, an asset-light company specialising in theexpedited LTL market segment, with annual revenues of approximately C$200 million.
The group’s Package and Courier business saw revenues slide by almost 3 per cent to C$287.2million, although the division’s EBIT improved by around 20 per cent, reaching C$17.2 million,raising the margin from 5 to 6 per cent for the third quarter. This division includes the company’sLoomis Express business, the former loss-making DHL Express domestic Canadian operation thatTransForce bought last year, and which it has been restructuring in order to make it profitable.
For the nine-month period ending 30 September, total revenue was up 21 per cent to C$2.4billion, while EBIT rose 40 per cent to C$183.0 – or 7.7 per cent of total revenue.
Net cash from operating activities reached $89.6 million in the third quarter of 2012, whilefree cashflow for the period amounted to $79.5 million, which it used to repurchase $42 million incommon shares and to reduce its long-term debt, which decreased by $22.8 million during thequarter.
“Going forward, TransForce will continue to use its solid cash flow to partially finance itsdisciplined acquisition strategy, further reimburse long-term debt and remain active on its normalcourse issuer bid programme,” the company announced.
“As the North American economy remains hesitant, TransForce will maintain its relentlessfocus on maximising return on assets,” concluded Bédard. “This guiding principle will also dictateour approach to capital utilisation, including the execution of our selective acquisition strategy.Internally, our priority on cost control and asset optimisation should lead to further efficiencygains and additional strong cash flow generation. Above all, by leveraging its enhanced density andby providing innovative, value-added solutions to its growing North American customer base,TransForce will be a consistent source of value creation for shareholders.”
