Acquisitions, diversification help TransForce perform in slowing economy

by Canadian Shipper

MONTREAL, Que. — TransForce increased its fourth quarter revenues despite a tough operating environment, concluding a successful year in 2007.

Revenue for the fourth quarter, ending Dec. 31, 2007 was up to $493.5 million, up from $456.8 million the same quarter the previous year. However EBITDA (earnings before interest, taxes, depreciation and amortization) declined to $61.1 million, compared to $65.8 million in the fourth quarter of 2006.

“High fuel costs and the strong Canadian dollar in the fourth quarter of 2007 continued to be challenging for our industry and for some of the TransForce companies. However, our geographic and business line diversification meant that unitholders were able to benefit from gains in our parcel division as well as our waste management, logistics, fleet management and personnel and leasing businesses,” said Alain Bedard, chairman, president and CEO of TransForce Income Fund.

In 2007 as a whole, TransForce generated $1.9 billion in revenue, up from $1.8 billion in 2006. The company attributed the increase to its acquisitions. It also increased EBITDA in 2007 by 1%, totaling $243 million.

“The downturn in economic activity is unfortunate but not unexpected and we were prepared to respond effectively. While some businesses such as cross-border Less-than-Truckload and Truckload have been negatively affected by declines in trade activity, we have other businesses performing very well. Because of our investments in a range of activities, TransForce is better positioned than many for this environment,” Bedard said.

The company says its success in rough waters can be chalked up to its diversification across geographies and market segments.

“We do not expect a return to a more buoyant North American economy in the short-term but remain convinced that our strategy and operating management are working effectively,” Bedard said.

TransForce announced it will continue to be a ‘buyer’ in the market place. It has acquired more than 75 competitors over the past five years, and the company said in its outlook that “There continues to be a significant opportunity for TransForce to play a leading role in the consolidation of the Canadian transportation industry, particularly in light of the current business and economic environment.”

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