Canadian freight transport group TransForce improved its package and courier profits in thesecond quarter and first half of 2013 but results weakened in other business areas.
The Montreal-based group’s overall Q2 operating profits dropped back to C$62.3 million from lastyear’s $68 million while revenues declined by 2.4% to $792 million. Over the first half-year endingJune 30, EBIT declined to $106.8 million from $116.1 million and revenues dropped to $1,542 millionfrom $1,600 million.
Alain Bédard, Chairman, President and CEO, said: “Profit improvements in Package and Courier andLess-Than-Truckload activities were overshadowed by continued weakness in rig moving activities ofthe energy sector, resulting in lower year-over-year revenue and EBIT in the second quarter.”
The package and courier division, based around Canadian company Loomis Express and US same-daydelivery firms Dynamex and Velocity Express, was a bright spot in a mixed set of results. Q2revenues increased to $327.5 million and profits rose to $23.4 million, resulting in a 7.1% profitmargin. In the first half-year, revenues grew to $631.6 million, profits improved to $40.6 millionand the margin rose slightly to $6.4 million.
Revenue growth was largely due to consolidation of Velocity Express, which was acquired at thestart of this year, although the business remains loss-making at present, thus offsetting higherprofits at the other package businesses.
Bédard commented: “On the operating front, margins from existing Package and Courier operationsfurther improved, as additional efficiency gains more than offset a loss at Velocity Express, whileoverall volume held steady.”
In other business areas, LTL revenues rose slightly and profits improved in the second quarterbut revenues and profits fell in the full truckload business and the energy and other specialisedbusinesses.
Looking ahead, Bédard said: “In the United States, we are progressing well with the integrationof our same-day Package and Courier operations and the market for these services is growing, butsoftness persists in the energy sector and we do not see any short-term significant improvement.Meanwhile, industry conditions remain difficult in Canada across all business segments and we donot expect the situation to improve for the remainder of 2013.
“As these conditions limit organic growth, key drivers for revenue and EBIT growth remainefficiency improvement, asset rationalization and a disciplined acquisition strategy. Accordingly,we will deploy resources in initiatives that will allow us to maximise return on assets andgenerate a strong cash flow,” he concluded.
