Expansion into the U.S. asset-based trucking market helped Titanium Transportation boost revenue 14% in Q3 compared to the previous quarter, as its acquisition of Crane Transport will generate about US$60 million in annual top line revenue.
Consolidated revenue totaled $112.7 million in the quarter, down from $113.4 million the same quarter last year. Truck transportation revenue grew to $62.4 million from $54.9 million in Q3 2022, while logistics revenue fell from $59.6 million to $51.5 million. Net income fell 71% year over year, to $1.87 million.
“During the third quarter of 2023, our industry continued to face significant headwinds including adverse economic conditions, soft demand and over-capacity,” Ted Daniel, CEO of Titanium Transportation Group, said in a release.
“Despite these challenging conditions, the strength of our company was demonstrated as we reported another strong and profitable quarter highlighted by growth in revenue from our trucking segment. Furthermore, we delivered on our commitment to sustainable growth by completing the acquisition of Crane, which provides a strategic foothold for our continued U.S. expansion. With the integration of Crane well underway and a solid foundation in place Titanium is well positioned to scale for future, long-term, sustainable growth.”
Integrating Crane Transport
Titanium is on pace to integrate Crane and will have rebranded the company by January, chief operating officer Marilyn Daniel said on a conference call with analysts.
“Having assets on the ground in the U.S. is definitely a market opener for us,” she said. “It’s definitely an opportunity for us and we see it as a significant growth opportunity.”
Looking ahead, Titanium anticipates a couple more sluggish quarters when it comes to rates.
“With the acquisition of Crane, as well as our new freight brokerage offices, we remain focused on cost control and profitability while building towards our future growth,” Ted Daniel said in a release. “We anticipate macroeconomic uncertainty for the remainder of 2023, but continue to be well-positioned to weather these conditions and drive growth when the trucking cycle turns. We expect the market to improve during the second half of 2024, with reductions in supply to the freight market, enabling additional organic growth and driving value for shareholders.”
The company’s tractor and trailer fleets are now up to date and no further tractor purchases are needed in the next year, the company said on its analyst call. Asked when market conditions will improve, Ted Daniel said there will likely be a couple more soft quarters as capacity leaves the market.
“Last winter, people survived a lot easier than I believe they are going to this winter,” he said. “I believe we will see accelerated shrinkage of capacity by late spring, early summer and I believe in the second half [of 2024] we’re going to be far more robust from a pricing perspective.”
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