expenses increases
Caterpillar Financial Services, part of Caterpillar’s global
Caterpillar Financial Products division, recorded strong new
business and profits for Q2 2008.
Go deeper with GlobalData
Access deeper industry intelligence
Experience unmatched clarity with a single platform that combines unique data, AI, and human expertise.
However, higher provisional expenses of $21m, as well as an
increase of $11m in general, operating and administrative expenses
saw Cat Financial’s pre-tax profit decrease by $11m, or 6 per cent,
from $187m in Q2 2007 to $176m in Q2 2008.
The group also saw an increase in operating costs. Write-offs
and net of recoveries was $19m for Q2 2008, up from $12m in Q2
2007, due to the continued softening in the US housing
industry.
This was offset by an increase of 5 per cent in revenues and a
marginal increase of $15m relating to wholesale, retail finance and
operating leasing revenues, as well as associated fee revenues and
depreciation on assets leased.
The margin increase was principally due to growth in average
earning assets over 2007 of $3.72bn.
US Tariffs are shifting - will you react or anticipate?
Don’t let policy changes catch you off guard. Stay proactive with real-time data and expert analysis.
By GlobalData
The 5 per cent increase in revenues can be broken down into
the following: $101m originated through growth in earning assets;
$7m through a net increase in other net revenue items; $12m related
to gains on the sales of receivables.
Cat Financial president, Kent M. Adams, said: “Although past
dues are up from last year, our portfolio continues to perform very
well with write-offs as a percentage of the retail portfolio
in-line with the five-year historical average.
“During this time of economic uncertainty in key markets, we
continue to work to be a reliable source of financing for
Caterpillar customers and dealers.”
New retail financing reached a record $4.6bn, an increase of
$944m, 26 per cent up from Q2 2007, which was primarily the result
of new retail financing business in the Asia-Pacific, diversified
services and Europe provision operating segments.
Caterpillar Financial includes Caterpillar Financial Services
Corporation (Cat Financial), Caterpillar Insurance Holdings, Inc
(Cat Insurance), Caterpillar Power Ventures Corporation (Cat Power
Ventures) and their respective subsidiaries. Cat Financial provides
a range of financing alternatives, including leasing to customers
and dealers for Caterpillar machinery and engines, solar gas
turbines and other equipment, including marine vessels.
For Q2 2008
Profit after tax: $130m (+6%)
Revenue: $785m (+5%)
Total assets: $32,413m (+17%)
For H1 2008
Profit after tax: $254m (+2.3%)
Revenue: $1,564m (+6.6%)
Katherine Gregory
