Toronto, Ontario — In this weekly Tuesday Ticker, AutoCanada reports net income decreases and records in full-year reports, while Ontario auto parts manufacturer Martinrea marks 20 percent gains in Q4 2022 sales. Meanwhile, proxy advisors suggest Ritchie Brothers Auctioneers steers clear of its deal to acquire IAA Inc.
Record highs and lows
AutoCanada reported its Q4 2022 and full-year 2022 results last week, marking drops in net income for Q4 2022 as a result of used vehicle writedowns costing $12.4 million and floorplan financing interest with a $13.3 million price tag.
Net income for Q4 2022 was $14.8 million, versus $69.4 million in the prior year.
Even still, the company hit a record for Q4 2022, reporting revenues of $1.4 billion, up from $1.2 billion in Q4 2021.
For all of 2022, AutoCanada reported revenue of $6 billion; up from $4.6 billion 2021. Diluted earnings per share were 52 cents, a decrease of $1.86 from Q4 2021 diluted earnings per share of $2.38.
The company said contributions from acquisitions supported performance and “exceeded expectations.”
“Had all of the acquisitions completed as of Q4 2022 occurred on Jan. 1, 2022, pro forma net income would have been $91.6 million for the TTM ended Dec. 31, 2022,” wrote AutoCanada in a release.
Martinrea’s major gains
Vaughan, Ont.-based auto parts manufacturer Martinrea International reported its Q4 2022 financials last week, with sales for the quarter up 22.9 percent year-over-year.
The company reported $46.2 million in profits for Q4 2022. Profit amounted to 58 cents per diluted share for Q4 2022, compared with a loss of 12 cents per share in Q4 2021.
The company said financial results were “much improved” over Q4 2021 as a result of the “pronounced impact” of semiconductor and supply shortages on prior-year volumes.
Martinrea also reported yearly records for 2022, both in total sales (approx. $4.8 billion) and production sales (approx. $4.5 billion).
In its 2023 outlook, Martinrea calls for total sales of $4.8 billion to $5 billion.
Deal or no deal
On Monday, proxy advisory firms Glass Lewis and Institutional Shareholder Services recommended that shareholders reject Ritchie Brothers Auctioneers’ planned US$7 billion acquisition of IAA Inc.
Both advisors noted potential risks in the deal; ISS pointed to a drop in stock prices after the transaction was first announced in November 2022, as well as a lag in performance, as reasons for concern, said Reuters.
“It appears Ritchie Bros. Auctioneers’ strong standalone performance offers a better understood and verified path to shareholder value creation,” Reuters said ISS noted in its report.
Shareholders will vote on whether to approve the proposed deal on March 14.
As of Monday at 2 p.m. ET, Ritchie Bros. shares traded at $82.96 per share, up 3.31 percent from Friday’s close. Meanwhile, shares of IAA Inc. traded at US$35.36, down almost seven percent from Friday’s close.