TFI sees TForce Freight continue to suffer in 2022


The Canadian road-freight logistics provider TFI, announced its fourth quarter and full year results on the 8th February. Over the full-year, revenue fell by 14.6%, to US$7.52bn, influenced by the exceptional item of the sale of the truckload business CFI. This reduced sales volume by US$333.3m. In terms of profits, operating income fell by a third, from $1.146bn in Financial Year 2022 to $757.6m in FY2023. There are exceptional items in this number, although the sale of CFI only netted $46.1m. It seems that much of the decrease was driven by the underlying weakness of the market. ‘Adjusted’ net income was down 35% at $538.3m. In the fourth quarter, the performance of the business seems to have perked-up, both in terms of revenue and income, however, again there are a number of exceptional items obscuring the underlying performance. 

All but one of the constituent businesses saw results that pointed downwards over the full year. ‘Less-than-Truckload’ saw revenue fall 16%, ‘Package and Courier’ by 10%, ‘Truckload’ by 21% and ‘Logistics’ by 4% year-on-year. The profit numbers were similar, although ‘Less-than-Truckload’ fell by 34%, which ought to be seen as a little surprising bearing in-mind some other providers have seen strength in the market. It appears that the problem may be ‘TForce Freight’, the US LTL specialist which TFI bought from UPS in 2021. Volumes in this business have apparently fallen significantly and this must be driving-up unit-costs. It is unclear why this has happened, as UPS Freight was not under performing too badly when it was sold by TFI. However, the fourth quarter does suggest that the US LTL business is recovering gradually in terms of both sales and costs. 

The only exception to profit falls was ‘Logistics’ which increased operating income by 14% which apparently is due to recent acquisitions. 

In his comments around the results, Alain Bédard, Chairman, President and Chief Executive Officer of TFI made particular reference to the strength of the company’s balance sheet, mentioning its strong cash-flow. Although he described the “ongoing turnaround at LTL” as “a top priority”, the strong implication was that he was looking for further acquisitions.

Author: Thomas Cullen

Source: Ti 

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