ST. CATHARINES, Ontario--(BUSINESS WIRE)--
Algoma Central Corporation (“Algoma”) – www.algonet.com, a leading provider of marine transportation services, today announced its results for the quarter ended June 30, 2017.
Second quarter highlights include (all amounts in C$000s, except for per share data and unless otherwise noted):
- A 21% increase in net earnings from continuing operation with earnings of $15,382 ($0.40 per share) compared to $12,736 ($0.33 per share) for the same period in 2016.
- Revenue for Domestic Dry-Bulk was up 26% and the segment net earnings increased 102% on strong volumes in the major commodity markets we serve.
- Revenues for Product Tankers were up 41% on strong customer volumes. Unfortuantely this did not translate into increased earnings as fleet availability was impacted by a vessel out-of-service issue.
- Although Pool earnings increased 9% for the quarter, earnings for Ocean Self-Unloaders were down 52% reflecting the timing of dry-dockings and the sale of one of two Marbulk-owned vessels during the second quarter of 2016, which resulted in a gain in the 2016 second quarter.
- The Company initiated a head count reduction in administrative support staff at its head office. These initiatives, which include early retirements and other terminations, will result in a 13% reduction in head office staff once completed later this year.
- Sold three properties and our 50% interest in a fourth property for net proceeds of $33,900 and recorded a net gain of $13,920 on the transactions.
- Eliminated refinancing risk and reduced overall borrowing costs by completing the issuance of $82,500 in 5.25% convertible debentures due June 30, 2024. The majority of the proceeds were used to redeem existing convertible debentures after the second quarter.
“We experienced continued strong volumes and performance in our Domestic Dry-Bulk business in the second quarter, building on the solid markets we saw developing earlier in the year” said Ken Bloch Soerensen, CEO of Algoma. We also saw very strong customer demand in Product Tankers; however, an unfortunate vessel breakdown prevented us from taking advantage of it. This vessel has since returned to service and we have taken other steps to meet this demand,” Mr. Soerensen continued.
Earnings from the discontinued real estate business were $13,782 compared to $525 last year, reflecting gains on properties sold during the quarter. In June, the Company suspended efforts to sell its Station Mall property as a result of uncertainty created by the restructuring of Sears Canada.
Results from operations for the second quarter were as follows:
| Three Months | Six Months | ||||||||||||||||
| Ended June 30 | Ended June 30 | ||||||||||||||||
| 2017 | 2016 | 2017 | 2016 | ||||||||||||||
| Revenues | |||||||||||||||||
| Domestic Dry-Bulk | $ | 80,979 | $ | 64,112 | $ | 99,380 | $ | 75,771 | |||||||||
| Product Tankers | 22,649 | 16,041 | 34,330 | 24,556 | |||||||||||||
| Ocean Self-Unloaders | 17,515 | 16,049 | 36,172 | 36,352 | |||||||||||||
| Investment Properties | 2,775 | 2,835 | 5,863 | 5,921 | |||||||||||||
| $ | 123,918 | $ | 99,037 | $ | 175,745 | $ | 142,600 | ||||||||||
| Three Months | Six Months | ||||||||||||||||
| Ended June 30 | Ended June 30 | ||||||||||||||||
| 2017 | 2016 | 2017 | 2016 | ||||||||||||||
| Operating earnings (loss) net of income tax | |||||||||||||||||
| Domestic Dry-Bulk | $ | 12,761 | $ | 7,984 | $ | (2,247 | ) | $ | (19,731 | ) | |||||||
| Unrealized gain of foreign currency exchange contracts | 3,397 | - | 2,394 | - | |||||||||||||
| Gain on cancellation of shipbuilding contracts | - | - | - | 16,196 | |||||||||||||
| 16,158 | 7,984 | 147 | (3,535 | ) | |||||||||||||
| Product Tankers | 667 | 1,636 | (1,764 | ) | 128 | ||||||||||||
| Ocean Self-Unloaders | 1,824 | 3,762 | 3,547 | 11,030 | |||||||||||||
| Global Short Sea Shipping | 391 | 902 | 1,057 | 1,392 | |||||||||||||
| Corporate | (3,179 | ) | (2,131 | ) | (5,818 | ) | (5,297 | ) | |||||||||
| Segment earnings (loss) | 15,861 | 12,153 | (2,831 | ) | 3,718 | ||||||||||||
| Not specifically identifiable to segments: | |||||||||||||||||
| Investment properties | (2,436 | ) | 915 | (1,489 | ) | 1,645 | |||||||||||
| Gain on foreign exchange | 2,537 | 2,468 | 1,244 | 2,443 | |||||||||||||
| Interest expense | (1,010 | ) | (3,023 | ) | (2,177 | ) | (5,959 | ) | |||||||||
| Interest income | 274 | 434 | 551 | 921 | |||||||||||||
| Income tax (expense) recovery | 156 | (211 | ) | 654 | 2,623 | ||||||||||||
| Net earnings (loss) from continuing operations | 15,382 | 12,736 | (4,048 | ) | 5,391 | ||||||||||||
| Net earnings from discontinued operations | 13,782 | 525 | 14,107 | 1,175 | |||||||||||||
| Net earnings | $ | 29,164 | $ | 13,261 | $ | 10,059 | $ | 6,566 | |||||||||
| Basic and Diluted Earnings (Loss) per Share | |||||||||||||||||
| Continuing operations | $ | 0.40 | $ | 0.33 | $ | (0.10 | ) | $ | 0.14 | ||||||||
| Discontinued operations | 0.35 | 0.01 | 0.36 | 0.03 | |||||||||||||
| $ | 0.75 | $ | 0.34 | $ | 0.26 | $ | 0.17 | ||||||||||
Cash Dividends
The Board of Directors has declared a cash dividend of $0.08 per common share to be paid on September 1, 2017 to shareholders of record on August 18, 2017.
About Algoma Central
Algoma Central Corporation operates the largest Canadian flag fleet of dry and liquid bulk carriers on the Great Lakes - St. Lawrence Waterway, including self-unloading dry-bulk carriers, gearless dry bulk carriers and product tankers. Algoma also owns ocean self-unloading vessels operating in international markets. Algoma provides ship management services for other ship owners. The Company is expanding into global dry-bulk markets with investments in businesses specializing in pneumatic cement carrying vessels and in short-sea dry-bulk shipping.
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