COMPETITION WATCH: TransForce weathering the storm, reports increased revenue
MONTREAL, Que. — Despite an industry slowdown and what TransForce terms a challenging operating environment, the fund reported Q3 revenues were up over last year by 8% to $486.2 million.
The company reported its EBITDA was $65.1 million in the quarter, compared to $65.2 million the same period last year. Profit was down to $28.5 million compared to $38.9 million the same quarter last year.
“The disciplined application of our acquisition strategy meant we could deliver increased revenues and solid bottom line results for our unit-holders while the North American industry continues to face difficult economic conditions. We have continued to add to our operations for future growth although this has meant an increase in interest expense for the shorter-term,” said Alain Bedard, Chairman, president and CEO of TransForce Income Fund.
Like other players in the oil and gas industry, TransForce voiced concerns about a proposed overhaul to the royalty system in Alberta.
In Western Canada, the oilfield services division is being affected by the decline in drilling activity that has worsened since the Alberta government’s announcement of possible changes to oil and gas royalties, the company announced. The new royalty policy is to be announced shortly and, depending on its effect on the energy industry, we will take the appropriate action possibly including layoffs as others serving the drilling segment have done.”
TransForce has achieved gains in the parcel delivery segment while seeing a decline in its truckload operations. LTL and truckload volumes are down in Central Canada as a result of the strengthening Canadian dollar and its impact on manufacturing.
The company has reported revenues of $1.447 billion during the first nine months of 2007, compared to $1.338 billion over the same period in 2006.,
“As expected, economic conditions continue to tighten as Canadian and US markets adjust to the significant changes in currency values, said Bedard. We see the marketplace remaining challenging for the balance of 2007 and into the next year. TransForce is benefiting from its diversification across geographies and market segments as a result of our acquisition strategy, and our operating companies are adjusting to evolving market conditions.”
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