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BRP Reports Fiscal Year 2019 First Quarter Results

FY2019 is off to a good start for BRP
RELATED TOPICS: BRP | SKI-DOO
BRP Bombardier Recreational Products
BRP Inc. today reported its financial results for the three-month period ended April 30, 2018. All financial information is in Canadian dollars unless otherwise noted. The complete financial results are available at www.sedar.com, as well as in the Quarterly Reports section of BRP’s website.

“Business is off to a very strong start. Record results for the first quarter are setting the stage for a solid year,” said José Boisjoli, President and CEO. “Our momentum continues with strong gains and we are outperforming in all product lines.”

“Our steady growth is largely attributable to the dedication and excellent execution of our teams globally. We are also encouraged by the global economic landscape. Even with the possible impact of commodities and transport costs, we are confident to be able to deliver our increased guidance,” Boisjoli concluded.
BRP 2018 Net Income Data
Highlights for the Three-Month Period Ended April 30, 2018

Revenues increased by $159.8 million, or 16.4%, to $1,136.7 million for the three-month period ended April 30, 2018, compared with $976.9 million for the corresponding period ended April 30, 2017. The revenue increase was primarily attributable to higher wholesale of Year-Round Products, partially offset by an unfavourable foreign exchange rate variation of $13 million.

BRP’s North American retail sales for powersports vehicles and outboard engines increased by 9% for the three-month period ended April 30, 2018 compared with the three-month period ended April 30, 2017, mainly due to an increase in SSV.

As at April 30, 2018, North American dealer inventories for powersports vehicles and outboard engines increased by 9% compared to April 30, 2017, driven mainly by PWC.
QUARTERLY REVIEW BY CATEGORIES

Year-Round Products
Revenues from Year-Round Products increased by $130.5 million, or 32.9%, to $526.6 million for the three-month period ended April 30, 2018, compared with $396.1 million for the corresponding period ended April 30, 2017. The increase was primarily attributable to a higher volume of SSV and 3WV sold, partially offset by an unfavorable foreign exchange rate variation of $8 million.

Seasonal Products
Revenues from Seasonal Products increased by $26.1 million, or 8.0%, to $350.4 million for the three-month period ended April 30, 2018, compared with $324.3 million for the corresponding period ended April 30, 2017. The increase resulted primarily from a higher volume of PWC sold, partially offset by an unfavourable foreign exchange rate variation of $5 million.

Propulsion Systems
Revenues from Propulsion Systems decreased by $10.8 million, or 10.6%, to $91.1 million for the three-month period ended April 30, 2018, compared with $101.9 million for the corresponding period ended April 30, 2017. The decrease was mainly attributable to a lower volume of motorcycle engines sold.

PAC (Parts, Accessories, Clothing and other services)
Revenues from PAC increased by $14.0 million, or 9.1%, to $168.6 million for the three-month period ended April 30, 2018, compared with $154.6 million for the corresponding period ended April 30, 2017. The increase was mainly attributable to a higher volume of SSV and PWC accessories.

Operating expenses increased by $28.7 million, or 17.2%, to $195.4 million for the three-month period ended April 30, 2018, compared with $166.7 million for the three-month period ended April 30, 2017. The increase was mainly attributable to higher selling and marketing expenses for continued product investments and to an unfavourable foreign exchange rate variation of $10 million.

Declaration of dividend
The Board of Directors approved a quarterly dividend of $0.09 per share for holders of its multiple voting shares and subordinate voting shares. The dividend will be paid on July 13, 2018 to shareholders of record at the close of business on June 29, 2018. The payment of each quarterly dividend remains subject to the declaration of that dividend by the Board of Directors. The actual amount, the declaration date, the record date and the payment date of each quarterly dividend are subject to the discretion of the Board of Directors.

Fiscal Year 2019 Guidance
The table below sets forth BRP’s financial guidance for Fiscal Year 2019 when compared to actual results for Fiscal Year 2018, as revised to reflect the adoption of new IFRS 9 Financial Page 4 instruments (IFRS 9) and IFRS 15 Revenue from contracts with customers (IFRS 15) standards effective as of February 1, 2018.
FY2018 BRP Income Data
Other guidance:
• Expecting ~$175M of Depreciation Expense (decreased from ~$180M) compared to $149M in FY18, ~$62M of Normalized Net Financing Costs (decreased from ~$65M) and ~100.5M shares (decreased from ~101.5M)
• Expecting Capital Expenditures of ~$315M to $330M in FY19 compared to $230M in FY18
[1] “Restated to reflect the adoption of IFRS 15 “Revenue from contracts with customers” and IFRS 9 “Financial instruments” standards as explained in Note 15 of the unaudited
condensed consolidated interim financial statements for the three-month period ended April 30, 2018. FY18 figures have not been audited.
[2] See “Non-IFRS Measures” section
[3] Effective tax rate based on Normalized Earnings before Normalized Income Tax
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