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Rocky Mountain on a Roll!

Rocky Mountain provided a view into the health of agriculture in western Canada

Rocky Mountain Dealerships Inc. (RME )announced their financial results today, for the six months ended June 30, 2017.  The results should be seen as very positive news by the stock market, as Rocky Mountain reports both an increase in sales, but also a noticeable increase in Net Earnings and EBITA.

Sales for the 6 months ended June 2017 were higher by 5.9% over the same period in 2016 – however, the gross margin percentage was a little lower in the 2017 period – resulting in a relatively flat gross profit of $62.4M for both periods.  

However, lower selling, general and administrative costs – along with lower financing costs helped Rocky Mountain to increase net earnings from $3.63 M to $5.66 M for the 6 month period ended June 30, 2017 – this represents a 56% increase in Net Earnings.

Likewise, the EBITA for the 2017 6 month period came in at $13.3 M versus $11.2 M in 2016 – a sizeable increase in cashflow.

On the balance sheet – Rocky Mountain has been able to continue to reduce its level of inventory investment in equipment – by approximately $50M as compared to June 2016.  This has helped the company to reduce the floor plan financing from $340 million in June 2016 to $282 million in June 2017.  With an interest cost of approximately 5%, this reduction in investment and increase in efficiency does yield results for the shareholders.

Rocky Mountain is Canada’s largest agriculture equipment dealer with full-service equipment stores in locations across the Canadian prairies.  As such, Rocky Mountain can provide an interesting view into the health of agriculture in western Canada.  With continued warm and dry weather in much of the west, and the harvest season upon us – it will be interesting to see how the October-December quarter – the busiest for RME – does in 2017.


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Discussion Panel: Canada’s Ag Trade Future

Video: Discussion Panel: Canada’s Ag Trade Future


Farm Management Canada

Discussion Panel: Canada’s Ag Trade Future

Sponsored by Canadian Canola Growers Association

Claire Citeau, Executive Director, Canadian Agri-Food Trade Alliance

• Fawn Jackson, Director of Government and International Affairs, Canadian Cattlemen’s Association
• Jennifer Marchand, Government Relations Leader and AVP, Cargill Limited
• Bernie McClean, Chair of Canadian Canola Growers Association, grains and oilseeds farmer from Saskatchewan (Moderator)

Canada’s capacity to produce safe, healthy food far exceeds the needs of our population and much of Canada’s agri-food sector is export- oriented. According to the Economic Strategy Table, in 2017 Canada exported $64.6 billion in agriculture and agri-food products and ranked 5th globally in agri-food exports. Today, over 90 percent of Canada’s farmers are dependent on exports.

Canada’s agriculture sector has grown substantially over the last decade and is well-positioned to grow further with an expanding, diverse global population creating new market opportunities. To capitalize, Canada has set an ambitious target of increasing exports by $20 billion by 2025.

Our industry experts, each representing different sectors and supply chains in agriculture, will dive into the future of trade, exploring the opportunities and challenges facing Canadian exports, including the impacts of the pandemic, and what lies ahead as Canada focuses on growing our agricultural exports.

 

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