CALGARY — Trimac Income Fund released the financial results of the fund and Trimac Transportation Services for the third quarter, with improved revenue results.
Trimac achieved strong results for the third quarter with a 5% increase in revenue to $88 million. Strong revenue growth of 16.2% in the B.C. and Prairie Provinces operations, and a short-term contract positively influenced revenues in the quarter.
“In the quarter, the partnership recorded improved profitability in the western division and BPL, while the eastern division’s profitability deteriorated due to difficult economic conditions in central Canada,” commented Terry Owen, president and CEO of Trimac. “Overall, our strategy of diversification by product, customer, industry and geography enabled us to deliver improvements in revenue and EBITDA over the same time period in the prior year.”
Bulk Plus Logistics (BPL) experienced strong revenue growth of approximately 55% to $6.5 million, as a result of increased volumes from a short-term contract in the freight brokerage business.
Partially offsetting this growth was a 26% decline in woodchip revenue. In the current quarter total revenues were $52.6 million, an increase of approximately 9% over the prior year’s quarter.
Eastern division experienced a modest decline in revenue to $28.9 million in the quarter that was predominantly the result of business losses due to highly competitive market conditions and lower revenue with existing customers in central Canada.
Western division profitability benefited from increased petroleum revenue; the second quarter 2007 acquisition of Ken Angeli Trucking and the purchase of certain assets of Logistics Express; and a short-term contract.
“As we have indicated in previous quarters, the forestry industry continues to struggle with the strengthening Canadian dollar and other adverse industry conditions, resulting in further mill closures in Ontario and B.C. and weaker demand for transportation throughout our woodchip operations,” explained Owen. “The eastern division’s profitability was negatively impacted by business losses and lower volumes with existing customers in the petroleum, cement, and chemical product lines; general economic weakness in central Canada; and a strengthening Canadian dollar.”
Looking ahead at the remainder of 2007, management expects a continuation of favourable economic conditions in B.C. and the Prairie Provinces, while the woodchips operation is expected to remain weak due to the ongoing challenges in the Canadian forestry sector.
In the eastern division, a strong Canadian dollar, chemical and auto manufacturing plant cutbacks and closures in central Canada, and a weak housing market in the U.S. are expected to continue to create a competitive pricing environment.
“Our expansive geographic footprint, diverse product line capabilities, and access to available capacity within regions with lower economic activity allow Trimac to capitalize on short-term contract opportunities from capacity within our trucking and logistics brokerage business,” added Owen.
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