TORONTO — Martinrea International Inc. says it's only been minimally affected by tariffs and expects a boost from changes to the North America trade agreement.
Executive chairman Robert Wildeboer said in a conference call Friday that the company had seen about $2 million in terms of total costs from tariffs, but that an exemption will see those costs go down.
"Our U.S. tariffs that we have to pay on steel and aluminum, to the extent that we did have to pay, we received exemptions from the U.S. government the last month for most of them. So effectively, we're even less impacted on that going forward."
He said smaller industry players have, however, been more affected.
"That's one of the things that we say in terms of urging for the industry that the tariffs no matter how you look at it politically, they're hurting people in smaller suppliers, and things are going to pop in certain situations."
The Toronto-based company, which has sizeable operations in the U.S. as well as Canada and elsewhere, said Canadian tariffs still apply and that the whole situation is being complicated with exemption applications. Wildeboer said the solution is simply to get rid of the tariffs altogether.
"There are a lot of exemption applications piling up, but one way to deal with that and a potential need for exemptions is to get rid of tariffs. So that's why we're advocating that."
The U.S. administration imposed tariffs on Canadian and Mexican steel and aluminum at the end of April and has also ramped up tariffs against China.
Both Canada and Mexico have been pushing for an end to metal tariffs ahead of the signing of the United States-Mexico-Canada Agreement at the end of November.
Wildeboer said Martinrea is set to benefit from the increased North American content requirements on autos in the new trade agreement.
"If you're buying parts overseas, which a lot of OEMs still do, there's a lot of incentive under the new rules to bring that into the United States, Canada or Mexico. And so for us, we see this as a great opportunity."
The company earned a record $36.4 million in the third quarter despite modest tariff effects and foreign exchange losses.
The manufacturer said it earned 42 cents per share for the period ended Sept. 30. That's unchanged from the prior year when its net income was $36.2 million.
Excluding one-time items, adjusted profits rose for a 16th consecutive quarter, reaching $37.2 million or 43 cents per share, below analyst expectations but up from $36.3 million or 42 cents per share a year earlier.
Martinrea was expected to earn 45 cents per share on $856.2 million in revenues, according to analysts polled by Thomson Reuters Eikon.
Total sales grew 1.5 per cent to $851.1 million, from $838.5 million.