DBRS Morningstar Reviews Canadian National Railway Company’s New Strategic Plan
On September 17, 2021, Canadian National Railway Company (CN or the Company) reaffirmed its 2021 outlook and unveiled its strategic roadmap. The key announcements included the following:-- Cost reduction measures aimed at growing operating profits and reducing the operating ratio (OR).
-- A review of the nonrail assets, including freight-forwarding services and vessels, which could be either partly or fully divested, also with the aim of lowering the OR.
-- A reduction in CN's capital expenditures to approximately 17% of revenues starting in 2022 from more than 20%.
-- CN will recommence share repurchases under the plan previously approved by the Company's board of directors in January 2021 and expects to complete the remaining $1.1 billion of share repurchases by the end of January 2022.
-- A review of CN’s capital structure and financial leverage over the coming months.
-- A view toward increasing share buybacks in the range of $5 billion in 2022.
-- Confirmation of CN's commitment to a science-based target of 43% carbon emissions intensity reduction by 2030.
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