Suppliers News (August 20, 2006)

Finning continues hot streak with strong quarter

Ongoing strength in equipment spending by resource-based and construction companies in Canada, as well as growth in support services both in Canada and South America, helped heavy machinery dealer Finning International (FTT-T, FINGF-O) post a second-quarter profit of $56.6 million or 63 per share on revenue of nearly $1.3 billion. The profit marks a 21.2% jump in earnings per share compared with the second quarter of 2005.

“The western Canadian economy continues to operate at very high levels and business is very strong,” says Mike Waites, executive vice-president and CFO of Finning. “As well, our South American operations are on track with our expectations for 2006 with higher parts and service revenues driving higher margins. In the U.K., our operations are effectively managing costs in a very competitive market.”

Finning says its global order book (the retail value of equipment units already ordered by customers) is at record levels.

In the second quarter of 2006, Finning secured the sale of 23 new Caterpillar (CAT-N) 797B mining trucks to Canadian Natural Resources (CNQ-T, CNQ-N) for the Horizon oilsands project, north of Fort McMurray, Alta. The deal is worth $264 million and includes 23 trucks scheduled for delivery in 2008, which will be serviced by a multi-year support agreement.

In other news, Juan Carlos Villegas, currently vice-president of power systems with Finning Canada, was appointed president of Finning South America effective Aug. 1. Villegas will be responsible for Finning’s operations in Chile, Argentina, Bolivia and Uruguay.

Brian Bell, currently president of Finning South America, will assume the role of executive vice-president of corporate strategy for Finning International, effective Sept. 1. And former Terasen CEO John Reid, and Bruce Turner, former Minera Escondida president, were appointed directors.

Terraquest adds plane

Terraquest Airborne Geophysics has added a Beechcraft twin-turbine King Air 90 to its fleet.

The King Air will be equipped with magnetics, radiometrics, a horizontal gradiometer, as well as XDS/VLF-EM instrumentation for conducting airborne geophysical surveys.

The King Air 90 has tanks capable of carrying about six hours of fuel, the equivalent of about 1,100 nautical miles. On the job, its mean terrain clearance of 80 metres means it’s safe, too.

Cruising speed clocks in at 370 km per hour whereas surveys are usually performed at around 220 km per hour.

Terraquest is accepting bookings for its addition.

Atlas Copco teams with Federal Equipment

Atlas Copco Construction and Mining Canada (ACCMC) together with Federal Equipment are partnering on a line of drilling products.

Montreal-based Federal Equipment sells and services hydraulic breakers, surface crawlers and will now offer the full range of Atlas Copco’s medium and large blasthole drill rigs, as well as rotary versions.

“In order to better meet customers’ needs, ACCMC has teamed with Federal Equipment, a leading supplier of heavy equipment to better promote Atlas Copco Construction and Mining products to the market,” explains Peter Walsh, vice-president of the construction product line.

Federal Equipment has branches in Quebec, Newfoundland and Labrador, and the Maritimes.

Sudbury, Ont.-based ACCMC is a company within the Sweden-based Atlas Copco Group serving mining and construction industries throughout Canada.

Cabo heads to Howard’s Pass

Cabo Drilling’s (CBE-V, CBEEF-O) Surrey, B.C.-based Advanced Drilling division will drill at least 6,000 metres at Pacifica Resources’ (PAX-V, PCFRF-O) Howard’s Pass Selwyn zinc-lead project in eastern Yukon.

The diamond-drilling program for the Vancouver-based company is under way as part of a $10-million exploration program aimed at defining the size of the deposit.

Advanced Drilling is operating three coring drills on the property under its contract with Pacifica. The drill program will include drill-testing of regional stratigraphy and definition drilling of three newly defined zones of lead-zinc sulphide mineralization.

Cabo Drilling is headquartered in Vancouver and has several divisions located throughout Canada.