BRP Inc. today reported its financial results for the three- and six month periods ended July 31, 2022. All financial information is in Canadian dollars unless otherwise noted.
“We delivered record second quarter results while continuing to advance on our strategic initiatives. Our team’s agility and resilience and the strength of our portfolio allowed us to continue to deliver robust performance in this unique operating environment,” said José Boisjoli, President and CEO.
The Company experienced a high level of demand for its products and a continuing level of supply chain related disruptions and inefficiencies in an increasingly inflationary environment when compared to the second quarter of Fiscal 2022 and the first quarter of Fiscal 2023. As a result, this limited the Company’s ability to satisfy consumer demand, most notably for PWC, and to replenish dealer inventories and in turn further limited product availability in the network compared to seasonal optimal levels. Such supply chain related disruptions also resulted in an increased level of substantially completed units awaiting missing components.
Despite these challenges, the Company optimized the shipment of missing components to its dealer network which resulted in a high conversion rate of substantially completed units available for retail and it revised its production schedule based on seasonality and component availability. The Company implemented strategic pricing initiatives aimed at reducing inflationary pressures, which nevertheless unfavorably impacted the Company’s profitability. The higher revenues achieved for the second quarter and first half of Fiscal 2023 compared to Fiscal 2022 were further supported by strong SSV retail sales, demonstrating the continued consumer interest, and by the ramping up of the new Juarez-3 facility dedicated to SSV production.
Revenues increased by $534.7 million, or 28.1%, to $2.438.5 billion for the three-month period ended July 31, 2022, compared to the $1.903.8 billion for the corresponding period ended July 31, 2021. The increase was primarily due to a higher wholesale volume of SSV and 3WV sold due to strong retail demand, favorable pricing across all product lines and the introduction of the Sea-Doo pontoon. The increase was partially offset by a lower volume of PWC sold due to supply chain disruptions. The increase includes a favorable foreign exchange rate variation of $10 million.
Revenues from Seasonal Products increased by $116.7 million, or 20.3%, to $691.2 million for the three-month period ended July 31, 2022, compared to $574.5 million for the corresponding period ended July 31, 2021. The increase in revenues was primarily attributable to the introduction of the Sea-Doo pontoon and favorable pricing on PWC units sold, combined with a favorable mix of PWC. The increase was partially offset by an unfavorable foreign exchange rate variation of $7 million.
Revenues from the Marine segment increased by $10.7 million, or 8.3%, to $139.5 million for the three-month period ended July 31, 2022, compared to $128.8 million for the corresponding period ended July 31, 2021. The increase was primarily due to a favorable mix of boats sold and favorable pricing, partially offset by lower volume of boats sold due to supply chain disruptions. The increase includes a favorable foreign exchange rate variation of $2 million.
The Company continues to expect another solid year with a Normalized EBITDA increase ranging from 14% to 17% compared to the previous year. The Company anticipates that its Normalized EPS – Diluted for the third quarter could be up over 50% compared to the third quarter of Fiscal 2022 as the Company intends to take advantage of an increase in planned production capacity towards the back half of the third quarter to accelerate the pace of product deliveries.
“As we are entering the second half of the year, demand for our products continues to be strong across our portfolio of products and markets,” Boisjoli said. “With current improvements in supply chain and our additional production capacity, we are in a favorable position to deliver an expected record second half of the year. Taking these factors into account and a stronger than expected second quarter, we are increasing our full-year guidance with an expected Normalized EPS of $11.30 to $11.65.”
You can find BRP’s full FY23 Q2 results here.