First Quarter Drop for TransForce, Softness to Persist

MONTREAL – While the oilsands are still a thriving business for TransForce, the company doesn’t see any drastic improvement coming from the Alberta oil fields this year, according to the Lethbridge Herald.

Alain Bédard, chairman, president and CEO of TransForce, told the Herald in a conference call that their oilsands’ business is “doing great,” but “the disaster in our company is the rig moving business. The rig moving business in Canada — it’s a mess.”

Bédard said he expects the U.S. energy sector to improve, while here at home, the outlook is “dark because of the challenges of moving oil to market.”

TransForce posted weaker than expected first quarter results yesterday. Total revenue decreased $38.4 million (4.9 percent) to $749.7 million due to what TransForce attribute to lower revenue in services to the Energy sector and in LTL. That drop was partially offset by a revenue contribution of $24.9 million from Velocity Express, which the company acquired in February. First-quarter EBIT amounted to $44.6 million, (or 5.9 percent) of total revenue, versus $47.4 million, or 6.0 percent, of total revenue from Q112.

Those results, said Bédard, “reflect persistent softness in certain key sectors of the North American economy and more normal seasonal demand patterns in 2013 compared with last year.”

In their first quarter report, Bédard wrote that given they don’t see significant improvement in business conditions before the end of the year, “TransForce will continue to focus on unlocking synergies from significant acquisitions made since 2011 and on maximizing return on assets in all segments. Achieving optimal efficiencies will further drive cash flow generation, which we will use to carry out our selective acquisition strategy, invest in cutting edge technology, repurchase shares and reimburse long-term debt.

“Above all, execution of TransForce’s operating strategy will remain firmly guided by the fundamental principle that all initiatives must create long-term value for shareholders,” he concluded.

You can read the full Lethbridge Herald story here or get TransForce’s first quarter results here.

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