Steel firm Canam says lower loonie, oil prices reducing foreign competition
The Quebec-based company's profits surged 28 per cent to $13.8 million on record sales
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MONTREAL—Structural steel fabricator Canam Group is facing less competition from foreign firms in Canada as the lower loonie, decreased energy activity and the U.S. economic recovery prompts American rivals to chase opportunities closer to home.
“These three things make the Canadian market less attractive to others and we ourselves have done OK,” CEO Marc Dutil said after releasing the company’s strongest fourth-quarter results in seven years.
The Quebec-based company’s profits surged 28 per cent to $13.8 million on record sales as a result of growing demand for bridge and building construction, up from $10.8 million a year earlier.
Sales increased 36 per cent to $383.6 million, mainly due to increased demand for joists and steel decks along with heavy and light structural steel.
The company had been expected to post $342.4 million of sales, according to analysts polled by Thomson Reuters.
Higher activity prompted the company to recall laid off workers, adding 350 jobs throughout its operations. It currently has about 3,900 employees.
Dutil said Alberta remains under pressure but is still busy and Ontario is slowly improving.
Canam is providing steel for Rogers Place, the new home of the Edmonton Oilers that is slated to open in the fall of 2016.
But it is the economic recovery in the United States, where Canam gets 80 per cent of its revenue, that is driving most new business with the company’s order backlog having soaring 70 per cent in one year to more than $1 billion.
Canam has provided steel to several new U.S. sports stadiums and expects more opportunities from professional soccer, hockey and football. It is also looking at other projects that including airports, convention centres and distribution centres.
For all of 2014, profits fell six per cent to $29.3 million despite higher sales, mainly because of severe winter conditions in northeastern North America in the first quarter.