WINNIPEG — Global supply chain constraints, inflation and restructuring costs put pressure on NFI Group Inc.'s second quarter earnings, but the company said Wednesday that the outlook is improving.
The Winnipeg-based bus maker reported a loss of US$56.7 million or 74 cents per share in the quarter, compared with earnings of US$2.6 million or four cents per share in the same quarter last year.
Along with the general economic headwinds, the results were also down as the company received no wage subsidy support this year, compared with the US$56 million it received in the last fiscal year, while a lawsuit settlement and pension liability also weighed.
Looking ahead though, the company sees improvements in its supply chain issues, and in customer demand.
"The second quarter saw some improvement in certain parts supply related challenges," said Brian Dewsnup, president of NFI parts on an analyst call.
"Where there have been issues, our sourcing and supply team has been doing a masterful job navigating through these challenges."
Investors appeared to agree, with the company's shares up more than 10 per cent in early afternoon trading.
Semiconductor and other electronics parts have been a key challenge though, forcing the company to reduce its fiscal guidance for the year in an April update.
Longer term, the company has reaffirmed its fiscal 2025 target that it announced in January 2021 to deliver between US$3.9 billion and $4.1 billion in revenue, as it sees the supply issues easing.
Revenue in the second quarter totalled US$398 million, down from US$583 million in the second quarter of 2021.
On the labour side, the company said a softening of the economy in some areas, and its boosted pay, have helped increase retention and recruitment.
NFI Group chief executive Paul Sourby, who returned to work this week after being on medical leave for months, said that while the company continues to navigate challenges, it is seeing positive momentum in its order book with record bid activity within its North American business.
The company now has a backlog of the equivalent of 9,674 vehicles, either firm or on option, up from 8,168 last year, including 733 units added from the Toronto Transit Commission, its first major win in the market for over a decade.
NFI shares, which have been under pressure in recent years, were up $1.40, or 10.53 per cent, to $14.70 in midday trading Wednesday on the Toronto Stock Exchange.
This report by The Canadian Press was first published Aug. 3, 2022.
Companies in this story: (TSX:NFI)
The Canadian Press
Note to readers: This is a corrected story. A previous version had a contradictory headline.
