BRP reports fiscal year 2018 Q2 results

BRP Inc. reported its financial results for the three- and six-month periods ended July 31, 2017. All financial information is in Canadian dollars unless otherwise noted. The complete financial results are available at www.sedar.com, as well as in the Quarterly Reports section of BRP’s website.

“Our team’s execution has once again been excellent this quarter, leading to very positive financial results,” said José Boisjoli, president and CEO. “We are clearly seeing the effect of our product innovation strategy that responds to consumer needs as our side-by-side business, particularly the new Maverick X3 and Defender vehicles, is performing well in all regions, and our all-terrain and watercraft products are providing better than expected results in many countries around the world.

“BRP continues to outpace the off-road industry, due in part to the excellent momentum in our dealer network, which is an important factor in our success. The continued growth of our off-road business provided a solid first half and helped balance yearly profitability,” he continued. “For the back end of FY2018, I am confident that our retail momentum will continue as planned, leading to the successful delivery of our guidance, which was adjusted to reflect the impact of our recent SIB.”

Revenues increased by $170.9 million, or 20 percent, to $1,027.0 million for the three-month period ended July 31, 2017, compared with $856.1 million for the corresponding period ended July 31, 2016. The revenue increase was mainly due to higher wholesale in year-round products and seasonal products. The increase includes a favorable foreign exchange rate variation of $8 million.

Gross profit increased by $41.7 million, or 24.2 percent, to $213.7 million for the three-month period ended July 31, 2017, compared with $172.0 million for the corresponding period ended July 31, 2016. The gross profit increase includes an unfavorable foreign exchange rate variation of $4 million. Gross profit margin percentage increased by 70 basis points to 20.8 percent from 20.1 percent for the three-month period ended July 31, 2016. The increase in gross profit margin percentage was primarily due to a favorable product mix in SSV and a higher volume of SSV and PWC sold, partially offset by higher sales program costs driven by the increase in retail sales and higher production costs.

Revenues increased by $197.2 million, or 11.0 percent, to $1,983.2 million for the six-month period ended July 31, 2017, compared with $1,786.0 million for the corresponding period ended July 31, 2016. The revenue increase was primarily attributable to higher wholesale of year-round products and seasonal products. The increase includes a favourable foreign exchange rate variation of $7 million.

Gross profit increased by $54.8 million, or 15 percent, to $420.9 million for the six-month period ended July 31, 2017, compared with $366.1 million for the corresponding period ended July 31, 2016. The gross profit increase includes a favorable foreign exchange rate variation of $5 million. Gross profit margin percentage increased by 70 basis points to 21.2 percent from 20.5 percent for the six-month period ended July 31, 2016. The increase in gross profit margin percentage was primarily due to a favorable product mix in SSV, partially offset by higher production costs and higher sales program costs driven by the increase in retail sales.

Revenues from Propulsion Systems increased by $5.5 million, or 5.5 percent, to $105.4 million for the three-month period ended July 31, 2017, compared with $99.9 million for the corresponding period ended July 31, 2016. The increase in revenues was mainly attributable to a higher volume and a favorable product mix of outboard engines sold, partially offset by a lower volume of motorcycle engines sold.