Despite a 4% decline in the fourth quarter of 2021, Canada’s Toromont Industries revenues increased 12% to $3.9 billion for the year compared to 2020.
“Toromont delivered solid results in the fourth quarter and full year of 2021, reflective of our focus on operational execution and favorable operating leverage, including the benefit of ongoing integration and alignment of our dealership territory across Eastern Canada,” said Toromont Industries President and Chief Executive Officer Scott J. Medhurst.
Net earnings increased to $105.6 million – or 19% – in the quarter versus a year ago. For the year, net earnings were $332.7 million, up 31% from 2020, the company reports.
In the equipment group, changing buying patterns and supply chain disruptions contributed to a 3% decline in revenues for the quarter over the same period a year ago. Higher light equipment and power systems rental activity and higher RPO (rent with a purchase option) revenues drove growth, while product support revenues continued to increase as well.
“The Equipment Group reported strong prime product deliveries while rental activity and fleet utilization improved; however, pandemic and macroeconomic factors continued to affect customer buying patterns and prime product and parts availability. Product support activity improved in the Equipment Group, dampened somewhat by pandemic and supply chain related factors,” said Medhurst. “We continue to leverage the learnings from the past two years with respect to cost structures and new ways to do business, while maintaining focus on customer service and support. Our order backlog at the end of 2021 was $1.3 billion, reflecting strong activity and the current supply environment.”
Driven by improved activity in construction and power systems markets and a partial recovery from the pandemic and shutdowns, bookings in 2021 increased 58% to $2.5 billion. Material handling lift trucks, mining equipment and agricultural equipment saw lower orders.
“Our team has shown incredible effort and commitment over the past two years, adapting to a rapidly changing business environment, while maintaining focus on employee safety and executing on customer deliverables – we thank them for their resiliency and dedication,” said Medhurst.
“Current backlog levels are strong, and supportive of our future, however, the global supply chain, including vendor production, continues to be challenged. Product availability (prime equipment, components and parts) has been restricted and we will likely continue to see shifts in delivery schedules. Inflationary pressures, supply-demand dynamics and pandemic-related developments are monitored closely. Technician hiring remains a priority and is essential to support the growing demand for our product support and project construction business. The diversity of our business, extensive product and service offerings, technology investments and financial strength, together with our disciplined operating culture, continue to position us well. We are proud to continue to provide the essential services and solutions that our clients are looking for, while remaining diligently focused on safeguarding our employees, and protecting our business for the future.”
Toromont Industries’ Equipment Group includes Caterpillar dealer locations for the Canadian provinces of Newfoundland & Labrador, Nova Scotia, New Brunswick, Prince Edward Island, Québec, Ontario and Manitoba, in addition to most of the territory of Nunavut. The group also includes rental operations, an agricultural equipment operation and a material handling business. In addition to its Equipment Group, the company also designs and installs industrial and refrigeration systems through its CIMCO division.