VALCOURT, Que. — Sea-Doo maker BRP Inc. says production shutdowns depleted its inventory and dragged down revenues in its second quarter, but rising demand pushed up profits as fun-seekers turned to power sports for pandemic recreation.
Net income rose 35 per cent, fuelled by a 40 per cent boost in sales of power sports vehicles — personal watercraft, Ski-Doos, all-terrain vehicles and others — in North America.
The earnings increase came despite a revenue decline of 16 per cent, due mainly to lower shipment volumes caused by the suspension of operations at most BRP plants in April and May, the company said.
Many purchases of its Can-Am off-road vehicles and other products came from first-time buyers, said CEO Jose Boisjoli.
“We knew that we were competing against cruise, airlines, amusement parks, swimming pools,” he said in an interview.
“A lot of people realized in May and June that they had not many options for going on vacation anywhere, and a lot of people turned around and decided to try power sports.”
Riding an ATV or Sea-Doo respects physical distancing while allowing friends and family to share a social activity, he said.
BRP laid off about 1,000 employees this year and slashed others’ hours, but plans to return to its pre-pandemic headcount of 13,500 by year’s end, Boisjoli said — minus the 650 workers on its outboard motor production line, which was halted permanently earlier this year.
BRP expects revenue to be down between five and nine per cent for the year, with normalized earnings per share down by between $3.65 and $3.95.
The company earned $126.1 million or $1.43 per share in net income for the quarter ended July 31, up from $93.3 million or 96 cents per diluted share a year earlier.
Revenue totalled $1.23 billion, down from $1.46 billion in the same quarter a year ago, the company said.
On a normalized basis, BRP said it earned $1.14 per diluted share for the quarter, up from a normalized profit of 71 cents per diluted share in the same quarter last year.
This report by The Canadian Press was first published Aug. 27, 2020.
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Christopher Reynolds, The Canadian Press