Ritchie revenue slips

At Ritchie Bros, a global auctioneer of industrial equipment, net earnings for the year ended 31 December 2010 were US$65.9 million, or $0.62 per diluted share, and adjusted net earnings were $65.2 million, or $0.61 per diluted share. This compares to $93.5 million, or $0.88 per diluted share, and $92.0 million, or $0.87 per diluted share, respectively for 2009. This represents a year-over-year decrease of 29 percent in adjusted net earnings. The company's auction revenues for the year ended 31 December 2010 were $357.4 million, compared to $377.2 in 2009.

Gross auction proceeds in 2010 were $3.28 billion, 6 percent lower than in 2009. Excluding the impact of fluctuations in the value of the US dollar, gross auction proceeds and auction revenues in local currency decreased 9 percent and 7 percent, respectively, in 2010 compared to 2009. The company's auction revenue rate (auction revenues as a percentage of gross auction proceeds) was 10.90 percent in 2010, compared to 10.80 percent in 2009.

The company achieved gross auction proceeds of $798.6 million in the fourth quarter of 2010, a 10% decrease compared to $891.1 million in the fourth quarter of 2009. Auction revenues were $88.3 million for the three months ended 31 December 2010, a 9 percent decrease compared to $97.1 million for the fourth quarter of 2009. Excluding the impact of fluctuations in the value of the US dollar, gross auction proceeds and auction revenues decreased 10 percent and 8 percent, respectively, in the fourth quarter of 2010 compared to the fourth quarter of 2009.

Ritchie Bros. sold over $872 million of equipment, trucks and other assets to online bidders during 2010, representing a 5 percent increase compared to 2009 sales of approximately $830 million. Internet bidders represented approximately 43 percent of the total bidder registrations at Ritchie Bros. auctions in 2010. Since launching its real-time online bidding service in 2002, the company has now sold almost $4.2 billion worth of trucks, equipment, and other assets to online bidders.

"Our results in 2010 reflected the challenging environment in which we operated, like many companies in our industry, and the difficulties we faced securing equipment consignments to sell at our auctions," said Peter Blake, CEO. "The widely hoped-for recovery in the used equipment market did not materialize, and there was not a meaningful improvement in fundamentals or optimism during the year. That being said, we are confident about the decisions we made during the year that will sustain our business in the future and leave us well positioned to meet the needs of our customer base, which has grown substantially over the last several years."

He said that from the start of 2011, the company sees many signs of the used equipment market returning to a more balanced state. "Equipment owners are more optimistic, OEM production is increasing to satisfy growing demand, and pricing has improved on most equipment categories," he says. "There is a lot of cash waiting to be deployed in the economy, and some of that capital is likely to be invested in equipment. Although competition is intense, these are all positive signs for our ability to grow our business in 2011. We have ample capacity in our network, a well trained and highly motivated team, and as a result of our actions over the last several years and an updated strategic plan, we are well positioned to capitalize on the growing momentum in our industry. The success of our early auctions in 2011 and the flow of consignments for upcoming auctions provide clues to a return to brighter days ahead as we set about to offer compelling business solutions to enable the world's builders too easily and confidently exchange equipment."