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This article was published 13/8/2012 (2923 days ago), so information in it may no longer be current.
Diversification is paying big dividends for Winnipeg-based Exchange Income Corporation.
A strong performance by its manufacturing division helped to offset turbulence in its aviation operations and propel the company to record revenues and earnings for the second quarter of 2012.
Exchange owns four regional airlines in Canada, a local helicopter company and four manufacturing operations in Canada and the United States.
On Monday it reported a 46 per cent increase in revenue for the three months ended June 30, to $201.6 million from $138 million in the same period in 2011.
And adjusted net earnings jumped 38 per cent to $8.1 million, or 39 cents per share, from $5.8 million, or 34 cents per share.
It was a similar story for the first six months of the year. Consolidated revenues increased by 61 per cent to $348.3 million and adjusted net earnings jumped by eight per cent to $9.6 million. However, earnings per share fell by nine per cent to 49 cents from 54 cents.
Company president and CEO Mike Pyle said while the financial results were encouraging, the way they were achieved was even more exciting.
"The strength of our diversification model was made evident by the record results we achieved in each of our key financial metrics," he said. "Diversification works when it's done right."
He said the aviation division struggled, with revenues up only two per cent for the quarter and all of the increase coming from its recently acquired Custom Helicopters operation.
Exchange also owns Perimeter Aviation, Keewatin Air, Calm Air, and Bearskin Air. Pyle said Calm Air and Bearskin were both hurt by increased competition in their markets. Bearskin offers scheduled regional air service in Manitoba and Ontario, while Calm Air offers passenger and freight services to Nunavut.
But while the aviation division struggled, Pyle said the manufacturing division boosted its revenues by 93 per cent in the second quarter.
The strongest performer was WesTower Communications, which supplies cellphone towers to telecommunications firms in Canada and the United States. Its revenues soared by 42 per cent, thanks mainly to a large new AT&T contract it landed late last year.
"And we expect results to be good for manufacturing in the second half and beyond," he added.
Exchange Income's shares (TSX:EIF) closed down three cents to $25.46 on Monday.
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