Ski-Doo maker BRP Inc.’s high-growth trajectory skidded this spring due to the coronavirus pandemic that eroded demand for some of its recreational products.
On Thursday, the Quebec company, originally part of Bombardier Inc. until it was spun off in 2003, reported a net loss of $226.1 million in the three months ended Apr. 30. The loss was driven by a $171.4-million writedown in its marine division, which will stop producing outboard engines thanks to troubles exacerbated by COVID-19.
BRP has been on a tear over the past several years, with its market value eclipsing that of its former parent earlier in 2020 before the pandemic took hold. But its revenue dropped 7.8 per cent to $1.23 billion in the first quarter, with an uptick in purchases of year-round utility vehicles offsetting the drop in people buying snowmobiles and boats.
“The sudden impact of the COVID-19 crisis has brought rapid changes that significantly disrupted our business and forced us to quickly and successfully adjust our plan,” chief executive José Boisjoli said in a statement.
BRP temporarily stopped or slowed down all of its marine and powersports manufacturing operations due to government restrictions during the pandemic. It implemented temporary layoffs and permanently cut approximately 900 positions around the world.
Most of its manufacturers and dealerships have since re-opened, Boisjoli said.
“With the new travel restrictions and vacation at home trend, our retail is returning strongly and showing very positive signs,” he said.
But the pandemic led BRP to permanently stop building outboard engines, a move that will result in 650 job losses globally. It will repurpose its facility in Sturtevant, Wisconsin, and permanently shutter its plant in Arkadelphia, Arkansas, as part of the reorganization.
“This business segment had already been facing some challenges and the impact from the current context has forced our hand,” Boisjoli said in a separate announcement Wednesday.
It will concentrate instead on the pontoon and aluminum fishing markets.
Copyright Postmedia Network Inc., 2020