BRP's CEO hopes 'staycations' will boost sales of Sea-Doos and off-road vehicles - Yahoo Canada Finance | Canada News Media
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BRP's CEO hopes 'staycations' will boost sales of Sea-Doos and off-road vehicles – Yahoo Canada Finance

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Sea-Doo maker BRP Inc. is facing a rough ride after the COVID-19 pandemic sank profits last quarter, with the company scrambling to cut costs while ramping up production following factory shutdowns.

First-quarter sales fell in all regions except the United States as the virus prompted staggered closures at dealerships and plants between January and May.

Despite year-over-year retail sales growth of about 35 per cent in May, the Valcourt, Que.-based company expects a 40 per cent revenue decline in the second quarter, propped up only by sustained demand among Americans.

“We’re not seeing the pickup (in Europe or Asia) that we’re seeing in the U.S.,” chief financial officer Sebastien Martel said on a conference call with analysts Thursday.

Chief executive Jose Boisjoli said “staycations and social distancing” will work to the advantage of the power sports vehicle producer. But he acknowledged that the fallout of an ongoing recession could weigh more heavily on sales, with revenue expected to drop between 10 and 20 per cent in the second half of its financial year.

“The unemployment rate is going up, consumer confidence is low and housing starts have reduced. All of this at one point will catch up,” he said.

The softer prospects prompted the company to shore up liquidity with a US$600-million loan, which matures in 2027.

BRP manufacturing operations will have resumed by next week in all six countries where it has plants following shutdowns that began between January and March, Boisjoli said.

Production will not be hampered despite physical distancing measures, but shipping will likely remain less efficient until the company builds up its inventory to ship in greater bulk, he added.

The comments came a day after BRP said it would cut 650 jobs or about five per cent of its global workforce as it stopped producing outboard motors — where sales were lagging before the global health crisis — part of up to $450 million in cost reduction measures slated for this year.

“For us, it’s a bit sad that we discontinued the production of the Evinrude — the outboard engine,” Boisjoli said. “The impact of COVID-19 has left us no choice.”

Three-wheeled motorcycles, whose sales surged in 2019, saw revenue fall by more than 40 per cent year over year in the first quarter as driver licensing offices shut down in many regions.

“The on-road industry suffered the most from containment measures due to the closure of riding schools and licence issuers and the cancellation of demo tours,” Boisjoli said.

In December 2018, he told The Canadian Press he hoped to triple global sales of three-wheelers by 2023 to more than $1 billion.

Sales of luxury items such as sporty roadsters and new Ski-Doos often wither in a recession, aggravated by an unemployment rate hovering at around 13 per cent in Canada and 15 per cent in the U.S.

“We do not believe the recent retail strength is sustainable and expect weaker economic conditions later in the year,” National Bank analyst Cameron Doerksen said in a research note.

BRP reported a loss of $2.58 per diluted share for the quarter ended April 30 as it took a $171.4-million impairment charge related to its marine business compared with a profit of $23.8 million or 25 cents per diluted share a year ago.

Revenue in the quarter fell eight per cent to $1.23 billion compared with $1.33 billion during the same period in 2019.

Excluding the impairment charge and other items, BRP said its normalized earnings for the quarter amounted to a profit of $22.7 million or 26 cents per diluted share compared with a normalized profit of $52.7 million or 54 cents per diluted share a year ago.

Analysts had expected normalized earnings at 23 cents per diluted share, according to financial markets data firm Refinitiv.

This report by The Canadian Press was first published May 28, 2020.

Companies in this story: (TSX:DOO)

Christopher Reynolds, The Canadian Press

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Carry On Canadian Business. Carry On!

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October 22, 2024

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Human Resources Officers must be very busy these days what with the general turnover of employees in our retail and business sectors. It is hard enough to find skilled people let alone potential employees willing to be trained. Then after the training, a few weeks go by then they come to you and ask for a raise. You refuse as there simply is no excess money in the budget and away they fly to wherever they come from, trained but not willing to put in the time to achieve that wanted raise.

I have had potentials come in and we give them a test to see if they do indeed know how to weld, polish or work with wood. 2-10 we hire, and one of those is gone in a week or two. Ask that they want overtime, and their laughter leaving the building is loud and unsettling. Housing starts are doing well but way behind because those trades needed to finish a project simply don’t come to the site, with delay after delay. Some people’s attitudes are just too funny. A recent graduate from a Ivy League university came in for an interview. The position was mid-management potential, but when we told them a three month period was needed and then they would make the big bucks they disappeared as fast as they arrived.

Government agencies are really no help, sending us people unsuited or unwilling to carry out the jobs we offer. Handing money over to staffing firms whose referrals are weak and ineffectual. Perhaps with the Fall and Winter upon us, these folks will have to find work and stop playing on the golf course or cottaging away. Tried to hire new arrivals in Canada but it is truly difficult to find someone who has a real identity card and is approved to live and work here. Who do we hire? Several years ago my father’s firm was rocking and rolling with all sorts of work. It was a summer day when the immigration officers arrived and 30+ employees hit the bricks almost immediately. The investigation that followed had threats of fines thrown at us by the officials. Good thing we kept excellent records, photos and digital copies. We had to prove the illegal documents given to us were as good as the real McCoy.

Restauranteurs, builders, manufacturers, finishers, trades-based firms, and warehousing are all suspect in hiring illegals, yet that becomes secondary as Toronto increases its minimum wage again bringing our payroll up another $120,000. Survival in Canada’s financial and business sectors is questionable for many. Good luck Chuck!. at least your carbon tax refund check should be arriving soon.

Steven Kaszab
Bradford, Ontario
skaszab@yahoo.ca

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Imperial to cut prices in NWT community after low river prevented resupply by barges

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October 22, 2024

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NORMAN WELLS, N.W.T. – Imperial Oil says it will temporarily reduce its fuel prices in a Northwest Territories community that has seen costs skyrocket due to low water on the Mackenzie River forcing the cancellation of the summer barge resupply season.

Imperial says in a Facebook post it will cut the air transportation portion that’s included in its wholesale price in Norman Wells for diesel fuel, or heating oil, from $3.38 per litre to $1.69 per litre, starting Tuesday.

The air transportation increase, it further states, will be implemented over a longer period.

It says Imperial is closely monitoring how much fuel needs to be airlifted to the Norman Wells area to prevent runouts until the winter road season begins and supplies can be replenished.

Gasoline and heating fuel prices approached $5 a litre at the start of this month.

Norman Wells’ town council declared a local emergency on humanitarian grounds last week as some of its 700 residents said they were facing monthly fuel bills coming to more than $5,000.

“The wholesale price increase that Imperial has applied is strictly to cover the air transportation costs. There is no Imperial profit margin included on the wholesale price. Imperial does not set prices at the retail level,” Imperial’s statement on Monday said.

The statement further said Imperial is working closely with the Northwest Territories government on ways to help residents in the near term.

“Imperial Oil’s decision to lower the price of home heating fuel offers immediate relief to residents facing financial pressures. This step reflects a swift response by Imperial Oil to discussions with the GNWT and will help ease short-term financial burdens on residents,” Caroline Wawzonek, Deputy Premier and Minister of Finance and Infrastructure, said in a news release Monday.

Wawzonek also noted the Territories government has supported the community with implementation of a fund supporting businesses and communities impacted by barge cancellations. She said there have also been increases to the Senior Home Heating Subsidy in Norman Wells, and continued support for heating costs for eligible Income Assistance recipients.

Additionally, she said the government has donated $150,000 to the Norman Wells food bank.

In its declaration of a state of emergency, the town said the mayor and council recognized the recent hike in fuel prices has strained household budgets, raised transportation costs, and affected local businesses.

It added that for the next three months, water and sewer service fees will be waived for all residents and businesses.

This report by The Canadian Press was first published Oct. 21, 2024.

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U.S. vote has Canadian business leaders worried about protectionist policies: KPMG

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October 22, 2024

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TORONTO – A new report says many Canadian business leaders are worried about economic uncertainties related to the looming U.S. election.

The survey by KPMG in Canada of 735 small- and medium-sized businesses says 87 per cent fear the Canadian economy could become “collateral damage” from American protectionist policies that lead to less favourable trade deals and increased tariffs

It says that due to those concerns, 85 per cent of business leaders in Canada polled are reviewing their business strategies to prepare for a change in leadership.

The concerns are primarily being felt by larger Canadian companies and sectors that are highly integrated with the U.S. economy, such as manufacturing, automotive, transportation and warehousing, energy and natural resources, as well as technology, media and telecommunications.

Shaira Nanji, a KPMG Law partner in its tax practice, says the prospect of further changes to economic and trade policies in the U.S. means some Canadian firms will need to look for ways to mitigate added costs and take advantage of potential trade relief provisions to remain competitive.

Both presidential candidates have campaigned on protectionist policies that could cause uncertainty for Canadian trade, and whoever takes the White House will be in charge during the review of the United States-Mexico-Canada Agreement in 2026.

This report by The Canadian Press was first published Oct. 22, 2024.

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