TransForce profit powered by efficiency, acquisitions
(Reuters) - Canadian trucker TransForce Inc reported a big rise in second-quarter profit on Friday, reflecting gains from an efficiency drive and acquisitions.
Shares in the Montreal-based transportation and logistics company, which also announced a share buyback plan, rose more than 7 percent on the Toronto Stock Exchange after the news.
"While end market conditions are far from buoyant, we believe that TransForce can continue to grow earnings through a combination of improving operating efficiency and additional acquisitions," said National Bank Financial analyst Cameron Doerksen in a note.
Healthy free cash flow and a new credit facility help position TransForce to increase its acquisition activity over the next six months and buy back its shares, the analyst added.
TransForce said it had agreed to a new credit facility, extended to 2015 and increased to C$800 million ($792 million) from C$650 million, with more favorable terms and covenants.
The company, which has operations across Canada and the United States, said net income in the April-June period rose 30 percent to C$34.1 million, or 34 Canadian cents a share, from C$26.2 million, or 27 Canadian cents a share, a year earlier.
Closely watched EBIT, or earnings before finance income and costs and income taxes, rose 39 percent to C$69 million, which Doerksen said bettered his C$59 million forecast. The EBIT margin increased to 8.5 percent of revenue from 7.6 percent.
Revenue rose 25 percent to C$812 million, largely from acquisitions of Loomis Express, IE Miller and Quick X, TransForce said.
The company said it would buy back up to 7 million shares, or 7.3 percent of its outstanding shares, over the year. Continued...