Tag Archives: Scott Thomson

Finning International to start using natural gas in service vehicles next year

The world’s largest Caterpillar dealer, Finning International, has reported record September quarter earnings per share performance as it revealed plans to roll out the use of low-carbon fuels, including compressed natural gas (CNG), renewable natural gas (RNG) and hydrogen.

In the most recent three-month period, the company reported earnings per share of C$0.61/share ($0.49/share) – a record – while revenue of C$1.9 billion and net revenue of C$1.7 billion were up 23% and 21%, year-on-year, respectively, driven by stronger new equipment sales in South America and the UK & Ireland and product support revenue growth in all regions.

In September, the company acquired a 54.5% controlling ownership interest in Compression Technology Corporation (ComTech) through its subsidiary, 4Refuel, to expand its fuelling capabilities beyond diesel, while allowing Finning to support customers through their energy transition, starting with CNG and RNG, and eventually hydrogen.

ComTech, in announcing this investment, said the partnership would help it scale into “gas-as-a-service, achieve our vision and advance our strategic position in the market”.

Cash consideration for the acquisition was C$25 million, of which C$20 million is to support future growth.

“ComTech provides 4Refuel with the capability to be a leading provider of turnkey, low-carbon energy solutions,” Finning said in its results. “It expands our fuelling capabilities beyond diesel and allows us to support our customers’ energy transition journey, starting with solutions for CNG and RNG. Our investment in ComTech leverages 4Refuel’s leading mobile on-site refuelling platform to enable customers to reduce their emissions and improve productivity.”

Scott Thomson, President and CEO of Finning International, added: “Natural gas, hydrogen and electrification are becoming an increasingly important aspect of our business as our customers are progressing towards their long-term goals of achieving net zero greenhouse gas emissions. With Caterpillar accelerating the development of battery-powered mining equipment, as well as natural gas blending and fully hydrogen-capable power solutions, we are excited about future opportunities to help our customers meet their goals and utilise sustainable energy sources.”

Thomson said the company planned to start using natural gas to power a portion of 4Refuel and Finning service vehicle fleets in 2022, which will help the company achieve its own greenhouse gas emission reduction target.

Finning captures large Cat equipment order from Codelco’s Andina, Chuquicamata mines

Caterpillar’s relationship with Codelco in Chile continues to strengthen with the OEM, through its Finning dealer, set to deliver mining support equipment and underground loaders to two of the copper miners’ operations.

The orders, revealed in Finning’s June quarter 2021 results, contributed to a building equipment backlog in mining and construction registered during the three-month period in South America.

New equipment sales were up 48% year-on-year in the June quarter in South America and up 14% from the March quarter of this year, driven by improved market activity, mostly in construction, Finning noted.

Finning’s backlog in South America included the Codelco orders.

First was a recently awarded order for Caterpillar support equipment from Codelco’s Andina mine, valued at C$40 million ($32 million), for delivery in the first half of 2022. In addition, the company plans to provide 27 Caterpillar R3000H underground loaders to Codelco’s Chuquicamata mine, with 10 of these machines included in its June quarter backlog.

The 20 t class R3000H was launched in 2012 and remains Cat’s largest model. It replaced the R2900 XTRA, providing added value for hard rock mine operators with a significant increase in truck loading capacity, being able to three pass load 60 t class trucks, and having enhanced digging and breakout performance, faster speeds on grade, a strengthened front frame, and an available Ventilation Reduction Package. Since then there have been a number of deployments of the LHD but there are only a few underground mines in the world with a potential requirement for large numbers of loaders of this class at one operation. One of these is Codelco’s new Chuquicamata Underground blockcave copper mine. This is one of the largest single large LHD orders ever made and will help the mine achieve its intended production rate of 140,000 t/d which is a rate on a par with sister operation and the world’s largest existing underground copper mine, El Teniente. Chuqui Underground includes four levels of production; a 7.5 km main access tunnel, five clean air injection ramps and two air extraction shafts. It will produce 366,000 t of fine copper and more than 18,000 t of fine molybdenum per year & extending Chuqui’s minelife to 2060.

Overall, Finning registered June quarter revenue of C$1.8 billion and net revenue of C$1.7 billion, up 30% and 28%, respectively, from a year earlier when COVID-19-related reductions in market activity hit.

All regions delivered a strong quarter, demonstrating operating leverage in a recovering market, Finning noted. June quarter EBIT as a percentage of net revenue was 9.3% in Canada, 9.8% in South America and 5.3% in the UK & Ireland, representing a step-up in profitability levels for all regions, the company said.

The company’s consolidated equipment backlog at June 30, 2021, increased to C$1.4 billion, from C$1.2 billion at March 31, 2021, with order intake in Canada and South America outpacing deliveries in the quarter, Finning said.

“We are pleased with our strong execution and results in the second (June) quarter,” Scott Thomson, President and CEO of Finning International, said. “With a reduced cost base and more efficient operations and supply chain, we are confident in our improved earnings capacity, which puts us firmly on track to achieve the mid-cycle targets we set out during our Investor Day in June.”