Finning reports Q2 2025 results, equipment backlog increases to $3 billion
VANCOUVER, British Columbia, Aug. 05, 2025 (GLOBE NEWSWIRE) -- Finning International Inc. (TSX:FTT) ("Finning", the "Company", "we", "our" or "us") reported second quarter 2025 results today. All monetary amounts are in Canadian dollars unless otherwise stated.
During the three months ended June 30, 2025, we sold our interests in ComTech (1) and 4Refuel (1). The results of operations of ComTech and 4Refuel up to their respective sale dates have been restated as discontinued operations for the full quarter. Comparative figures have been restated to exclude the results of discontinued operations.
Unless otherwise indicated, all financial information in this earnings release represents the results from continuing operations.
HIGHLIGHTSAll comparisons are to Q2 2024 results unless indicated otherwise.
Q2 2025 revenue of $2.6 billion was in line with the prior year and included a 5% increase in product support.
Equipment backlog (2) of $3.0 billion at June 30, 2025 was an all-time high and increased by 6% from March 31, 2025, and includes over $1.0 billion of power systems orders. At the same time, new equipment sales in the quarter reached nearly $1.0 billion. The growth in backlog reflects multiple large mining equipment orders in Canada.
Driven by strong execution and productivity initiatives, Q2 2025 SG&A (1) margin (2) was 15.5%. SG&A included long-term incentive plan compensation expense that was $16 million (or $0.09 per share) higher compared to Q2 2024, principally due to our 44% share price increase during the quarter.
Q2 2025 EBIT (1) was $203 million. Excluding severance costs of $12 million (further described on page 8), Q2 2025 Adjusted EBIT (3)(4) was $215 million. Adjusted EBIT margin (2)(4) was 8.3%. Adjusted EBIT margin was 10.1% in South America, 9.4% in Canada, and 5.2% in the UK & Ireland.
Q2 2025 Adjusted EPS (1)(2)(4) from continuing operations of $1.01 was up 5% from $0.97 in Q2 2024. This $1.01 excludes 4Refuel earnings of $0.05 per share (Q2 2024 $0.05 per share) which was moved to discontinued operations but does include the $0.09 per share higher LTIP expense.
Q2 2025 Adjusted ROIC (1) from continuing operations (2)(4) was 18.7%. Q2 2025 free cash flow from continuing operations (3) was a use of $164 million, driven primarily by higher inventory levels to support increased customer activity.
"We are pleased to see the results of the consistent execution of our strategy, which coupled with the geographic and end market diversity of our business, led to another solid quarter of results. Product support revenue grew by 5%, with growth in all three regions, continuing the momentum in 2025. We also built our backlog to a record level of $3 billion, while at the same time delivering nearly $1 billion of new equipment in the quarter. Our strong cost and capital discipline continued, with SG&A margin of 15.5%, and invested capital turnover from continuing operations (2) of approximately 2.3 times. We also took action to streamline our operations and position our business for further sustainable cost savings in Canada through the end of this year and beyond. And lastly, we completed the sale of 4Refuel and ComTech ahead of plan, which we expect will improve our return on invested capital and allow us to continue to sharpen focus on our core dealership operations," said Kevin Parkes, President and CEO.
"Our focus on strategy execution continues to strengthen and we will continue to maximize product support, drive full-cycle resilience and grow our used, rental and power businesses to improve our return on invested capital," said Mr. Parkes.
Q2 2025 FINANCIAL SUMMARY
3 months ended June 30
% change
2025
2024
fav(1)
($ millions, except per share amounts)
(Restated)
(unfav)(1)
New equipment
982
979
0%
Used equipment
83
146
(43)%
Equipment rental
73
70
4%
Product support
1,469
1,401
5%
Other
2
3
(8)%
Revenue
2,609
2,599
0%
Gross profit
619
606
2%
Gross profit margin (2)
23.7%
23.3%
SG&A
(404)
(391)
(3)%
SG&A margin
(15.5)%
(15.0)%
Equity earnings of joint ventures
—
5
Other expense
(12)
—
EBIT
203
220
(8)%
EBIT margin (2)
7.8%
8.5%
Adjusted EBIT
215
220
(2)%
Adjusted EBITmargin
8.3%
8.5%
Net income from continuing operations
126
137
(8)%
EPS
0.94
0.97
(3)%
Adjusted EPS
1.01
0.97
5%
Free cash flow from continuing operations
(164)
323
n/m (1)
Q2 2025 EBIT by Operation
South
UK &
Finning
($ millions, except per share amounts)
Canada
America
Ireland
Other
Total
EPS
EBIT / EPS
114
96
17
(24)
203
0.94
Severance costs
11
—
—
1
12
0.07
Adjusted EBIT / Adjusted EPS
125
96
17
(23)
215
1.01
Adjusted EBIT margin
9.4%
10.1%
5.2%
n/m
8.3%
Q2 2024 EBIT by Operation
South
UK &
Finning
($ millions, except per share amounts)
Canada
America
Ireland
Other
Total
EPS
EBIT / EPS
123
93
15
(11)
220
0.97
EBIT margin
8.9%
10.4%
4.6%
n/m
8.5%
QUARTERLY KEY PERFORMANCE MEASURES
2025 (Restated) (a)
2024 (Restated) (a)(b)
2023 (Restated) (a)(b)(c)
Q2
Q1
Q4
Q3
Q2
Q1
Q4
Q3
Q2
EBIT ($ millions)
203
205
212
160
220
195
168
246
235
Adjusted EBIT ($ millions)
215
205
212
193
220
195
223
246
235
EBIT margin
Consolidated
7.8%
8.4%
8.4%
6.4%
8.5%
8.5%
7.2%
10.2%
9.3%
Canada
8.5%
8.4%
7.5%
5.0%
8.9%
8.7%
8.9%
10.7%
9.7%
South America
10.1%
10.6%
10.9%
10.6%
10.4%
11.0%
6.7%
12.3%
12.1%
UK & Ireland
5.2%
4.7%
5.8%
4.9%
4.6%
4.5%
1.8%
5.9%
5.5%
Adjusted EBIT margin
Consolidated
8.3%
8.4%
8.4%
7.8%
8.5%
8.5%
9.5%
10.2%
9.3%
Canada
9.4%
8.4%
7.5%
6.9%
8.9%
8.7%
9.4%
10.7%
9.7%
South America
10.1%
10.6%
10.9%
10.9%
10.4%
11.0%
12.6%
12.3%
12.1%
UK & Ireland
5.2%
4.7%
5.8%
6.3%
4.6%
4.5%
2.7%
5.9%
5.5%
EPS
0.94
0.95
0.97
0.69
0.97
0.81
0.55
1.03
0.96
Adjusted EPS
1.01
0.95
0.97
0.88
0.97
0.81
0.92
1.03
0.96
Invested capital from
continuing operations (3) ($ millions)
4,580
4,333
4,275
4,495
4,683
4,843
4,473
4,592
4,334
Adjusted ROIC from continuing operations
Consolidated
18.7%
18.7%
17.9%
18.0%
19.0%
19.7%
20.7%
21.0%
21.0%
Canada
16.3%
15.9%
15.4%
15.9%
17.7%
18.5%
20.1%
21.4%
21.6%
South America
25.9%
26.3%
25.9%
26.5%
26.5%
27.4%
27.6%
27.6%
26.4%
UK & Ireland
18.4%
16.9%
15.0%
11.5%
11.0%
11.5%
12.3%
14.1%
15.9%
Invested capital turnover from
continuing operations (times)
2.28
2.26
2.16
2.10
2.07
2.09
2.12
2.19
2.18
Inventory from continuing
operations (3) ($ millions)
3,066
2,908
2,638
2,873
2,963
3,064
2,832
2,902
2,750
Inventory turns from
continuing operations (2) (times)
2.58
2.73
2.78
2.67
2.46
2.36
2.47
2.61
2.52
Working capital to sales from
continuing operations (2)
26.4%
26.6%
28.2%
29.0%
29.5%
29.0%
28.3%
27.2%
27.3%
Free cash flow from
continuing operations ($ millions)
(164)
124
399
330
323
(224)
260
2
23
Net debt to Adjusted EBITDA (1) ratio from
continuing operations (2)(4) (times)
1.6
1.6
1.7
1.9
1.9
2.0
1.8
1.9
1.8
(a) As a result of the sales of our interests in 4Refuel and ComTech, these businesses qualified as discontinued operations. Effective Q2 2025, the comparative figures have been restated to exclude the results of discontinued operations. For more information on the impact to the financial statements, please refer to Note 2 of our Interim Financial Statements (1).(b) Following a detailed review of our remanufacturing business in Canada, we determined that the correct classification of certain costs in SG&A should be cost of sales. Effective Q3 2024, the comparative figures for 2023 and Q1 2024 and Q2 2024 include an immaterial adjustment for a change in classification of certain expenses. For more information on the impact to financial statements, please refer to Note 11 of our Interim Financial Statements.(c) Comparative results for 2023 have been restated for our adoption of the amendments to IAS 1, Presentation of Financial Statements effective for the financial year beginning January 1, 2024.
Q2 2025 HIGHLIGHTS BY OPERATIONAll comparisons are to Q2 2024 results unless indicated otherwise. All numbers, except Adjusted ROIC from continuing operations, are in functional currency: Canada, Canadian dollar; South America, US dollar (USD); UK & Ireland, UK pound sterling (GBP). These variances and ratios for South America and UK & Ireland exclude the foreign currency translation impact from the CAD relative to the USD and GBP, respectively, and are therefore considered to be specified financial measures. We believe the variances and ratios in functional currency provide meaningful information about operational performance of the reporting segment.
South America Operations
Revenue increased 5%, higher across all lines of business except rental.
New equipment revenue was up 6%, driven by strong mining deliveries in Chile.
Product support revenue was up 4%, driven by strong demand from mining customers, coupled with higher rebuild activities in the construction sector.
EBIT was up 2% and EBIT margin of 10.1% was down 30 basis points, reflecting a higher proportion of lower margin mining equipment sales.
Canada Operations
Revenue decreased 3%. Lower used and new equipment sales, primarily in the construction sector, were partially offset by higher product support and rental revenues.
Product support revenue was up 4%, primarily reflecting higher spending by mining customers.
Adjusted EBIT increased 2% from Q2 2024 EBIT. Adjusted EBIT margin of 9.4% was up 50 basis points from Q2 2024 EBIT margin, primarily driven by a higher proportion of product support revenue.
In Q2 2025, we incurred $11 million of severance costs in ...
