Ritchie Bros. Auctioneers Incorporated had another record-breaking quarter, with net earnings for the six months ending on June 30 hitting $37.7 million, or $1.08 per diluted weighted average share.
The figures compare to $34.8 million, or $1 per diluted share, in 2005.
Adjusted net earnings for the first half of 2006, as described below, were 19 percent higher than the comparable amount in the first half of 2005. Net earnings for the first half of 2006 would have been $36.6 million, or $1.05 per diluted share, had the results excluded the effect of after-tax gains of $1.1 million recorded on the sale of property that was not being used in the company’s operations, which is not considered part of its normal operating results.
Net earnings for the first half of 2005 would have been $30.7 million, or 89 cents per diluted weighted average share, excluding after tax gains of $4.1 million recorded in 2005 on the sale of excess property.
Gross auction sales for the six months ending June 30 were a record $1.4 billion, which is a 23 percent increase over the first half of 2005, making this the largest ever first half gross auction sales in the company’s history. Auction revenues for the first six months of 2006 were $134.7 million, an increase of 18 percent compared to the prior year’s first half. The company’s auction revenue rate (auction revenues as a percentage of gross auction sales) was 9.6 percent for the first six months of 2006, compared to 10.03 percent in the equivalent period in 2005.
During the first six months of 2006, Ritchie Bros. held 85 unreserved industrial auctions at locations throughout North America, Europe, the Middle East, Australia, Asia and Mexico (seven more than 2005) and broke nine regional gross auction sales records, including the largest auction held in the company’s history in February in Orlando, FL, which posted gross auction sales of more than $113 million.
Ritchie Bros. also held 115 unreserved agricultural auctions in the first half of 2006, generating gross auction sales of $99 million, which compares to 73 agricultural auctions with gross auction sales of $53 million in the corresponding period in 2005.
The company sold in excess of 116,000 lots from more than 15,000 industrial consignments and had more than 118,000 bidder registrations at its industrial auctions during the six-month period.
Internet bidding continued to enhance the Ritchie Bros.’ live auctions, and in the first half of 2006 the company sold nearly $222 million worth of trucks and equipment to on-line buyers using the rbauctionBid-Live system.
Internet bidders were buyer or runner-up bidder on more than 20 percent of the lots available for on-line bidding during the period. The rbauctionBid-Live system now has more than 50,000 approved users.
While the auctions varied in size over the trailing 12 months the average Ritchie Bros. industrial auction during this period attracted more than 1,300 bidder registrations and featured more than 1,300 lots consigned by 183 consignors, generating average gross auction sales of approximately $14 million per auction.
Gross auction sales for the quarter ending June 30 were $830.5 million, the largest quarterly gross auction sales in the company’s history. Auction revenues for the second quarter of 2006 were $78.7 million and the auction revenue rate was 9.47 percent.
Peter Blake, the company’s CEO, remarked: “I am very pleased with our results to date in 2006. We have been successful growing both our sales and our earnings in a tight equipment market, which is a clear indication that our strategy is working.
“Strong economies in most of our markets have meant that we have continued to be faced with challenges securing equipment to sell at our auctions. However, we have still been able to grow our gross auction sales, mainly because an increasing number of buyers and sellers are choosing to participate in our unreserved auctions. We believe that we have been successful demonstrating to equipment owners that our unreserved auctions are a more efficient way of accessing the global marketplace than alternative channels, and that we are able to create value by matching local supply with global demand in an open and transparent manner.”
In Other News…
The company’s board of directors announced the declaration of a quarterly cash dividend of 21 cents per common share payable on Sept. 15 to shareholders of record on Aug. 25. This is an increase of 17 percent compared to the previous quarterly dividend of 18 cents per share.
The board also announced the appointment of a new independent director, Edward Pitoniak, effective July 28. Pitoniak is currently president and CEO of Canadian Hotel Income Properties Real Estate Investment Trust, and brings a proven track record in marketing, brand management and product development, along with strong people development skills. Pitoniak has also been appointed to the Audit Committee.
For more information, please visit www.rbauction.com.
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