Lack of snow, weak Western Canada economy hits BRP snowmobile sales
Valcourt, Quebec company posts loss for quarter, sees weak sales of Ski-Doo and Lynx snowmobiles compared to last year
VALCOURT, Que.—BRP Inc. had a $28.7-million net loss in its latest quarter as it felt the impact of a mild winter, weak economic conditions in Western Canada and a strong American dollar compared with other currencies.
The Quebec-based company’s loss for its fiscal fourth quarter amounted to 25 cents per share. That’s compared to last year’s net profit of seven cents per share or $8.5 million in the fourth quarter of its 2014-15 financial year.
Sales of BRP’s Ski-Doo and Lynx snowmobiles weakened compared with the previous year but that was partially offset by higher sales of year-around products.
The rising value of the American dollar also ate away at BRP’s profit by triggering a $70.3-million non-cash writedown of its outboard motor business
The writedown was the main reason operating expenses rose by 82.5 per cent to $210.6 million from $115.4 million but most other major expense categories also increased.
Revenue for the three months ended Jan. 31, 2016, was $1.11 billion—up $40.7 million or 3.8 per cent from $1.07 billion a year earlier. Much of the revenue increase was due to the higher value of the U.S. dollar compared with the loonie.
After adjusting for foreign exchange, restructuring and impairment costs and income taxes, BRP’s normalized profit was $86.8 million—down from $116.5 million a year earlier. On a per-share basis, normalized earnings dropped to 75 cents from 98 cents in the fourth quarter of 2015, when fewer shares were outstanding.