MONTREAL, Que. -- TransForce saw its Q2 revenue and net income slide, which it blamed on “continued weakness in rig moving activities of the energy sector.”
Meanwhile, profit improvements were realized in its package and courier and LTL businesses, the company reported.
TransForce posted Q2 revenue of $792.3 million, down from $812 million in the same quarter of 2012. Net income was $26.6 million, down from $34.1 million in the second quarter of 2012.
For the first six months of the year, revenue was $1.542 billion, compared to $1.6 billion for the first half of 2012. Net income was $45.4 million, down from $64.2 million in the same period of 2012.
“On the operating front, margins from existing package and courier operations further improved, as additional efficiency gains more than offset a loss at Velocity Express, while overall volume held steady,” said chairman and CEO Alain Bedard. “In the LTL segment, successful measures to rationalize our asset base and reduce costs resulted in a higher year-over-year EBIT before gains on the disposal of property and equipment. A weak economy negatively impacted the truckload segment and we vigilantly allocated resources to reflect demand variations. Finally, services to the energy sector remained considerably affected by the severe decline in drilling activity in North America and we have taken proactive measures to better align supply to new demand levels.”
In its Q2 filings, TransFore announced it is acquiring E.L. Farmer and Company of Odessa, Texas. Farmer is an asset-light provider of pipe storage and hauling services for the oilfield industry. The transaction is expected to wrap up in the third quarter.
Bedard said he is not expecting business conditions in Canada to improve any time soon.
“Industry conditions remain difficult in Canada across all business segments and we do not expect the situation to improve for the remainder of 2013,” he said. “As these conditions limit organic growth, key drivers for revenue and EBIT growth remain efficiency improvement, asset rationalization and a disciplined acquisition strategy, like the proposed E.L. Farmer acquisition.”