MONTREAL, QC- Thanks to the completion of a number of acquisitions, including the takeover of Ontario-based Contrans trucking firm, TrandForce’s Q4 profits ballooned to $43.2 million.
Alain Bédard, TransForce CEO, commented: “In the fourth quarter, acquisitions boosted total revenue above the one-billion mark for the first time ever and, accompanied by efficiency gains across most of our existing network, resulted in strong increases in EBIT and adjusted net income.”
TransForce reported a profit of $43.2 million in the fourth quarter of 2014, versus $12.3 in Q4 2013. Revenue climbed to $1.074 billion for the quarter, versus $792.5 million a year earlier. That’s 36 percent higher. Net of fuel surcharge, revenue increased 34 percent to $946.9 million. This increase reflects acquisitions completed in the previous twelve months, including Contrans, which was consolidated as of November 14, 2014. Excluding acquisitions, revenue was stable.
“TransForce completed several significant business acquisitions in 2014, including Contrans, our largest ever. These network additions in all business segments expanded our service offering, geographic reach and, above all, our pool of talent. Going forward, these strengths will be leveraged by further improving operating efficiency and asset utilization with the stated objectives to maximize cash flow generation and create lasting shareholder value, as we have always done with previous acquisitions and as we constantly do with existing operations,” Bédard said.
Bédard said the package and courier segment was driven by improved returns from right-sizing U.S. same-day delivery activities and combining certain operations to enhance network efficiency.
“In the Less-Than-Truckload segment, existing operations accounted for the majority of the year-over-year EBIT growth as a result of asset rationalization and higher yields. The EBIT margin before fuel surcharge gained 50 basis points in the Truckload segment, as a 220 basis point improvement from existing operations was largely offset by non-cash intangible amortization charges of acquired businesses.”
But in the waste management segment, the Veolia assets are generating insufficient returns, Bédard said, adding: “our priority is to optimize these operations to unlock synergies.”
TransForce enters 2015 stronger than ever thanks to last year’s acquisitions, according to Bédard, who expects the firm’s U.S. operations to get a boost from a robust economy.
“The P&C and TL segments should result in greater efficiency and asset utilization. Although the Canadian economy is lagging, a weaker currency should create momentum to the manufacturing sector in Central Canada to the benefit of LTL and TL operations, where we also stand to gain from last year’s acquisitions,” he said. “Given this business environment, we expect 2015 total revenue to approach $4.5 billion.”
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