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Press release from CNW Group

ALGOMA CENTRAL CORPORATION Operating Results

Wednesday, February 16, 2011

ALGOMA CENTRAL CORPORATION Operating Results17:02 EST Wednesday, February 16, 2011For the Three and Twelve Months Ended December 31, 2010 (In thousand of dollars except per share data) ALC-TTORONTO, Feb. 16 /CNW/ -   Three Months EndedYear Ended   December 31 December 31   2010200920102009           Revenue  $164,410$167,059$536,373$520,147           Segment operating earningsnet of income tax  $19,911$15,725$33,634$30,717           Net earnings  $20,969$23,169$32,602$38,845           Earnings per share  $5.39$5.95$8.38$9.98           Dividends paid per common share  $0.45$0.45$1.80$1.80Fourth Quarter ResultsThe Corporation is reporting net earnings for the three months ended December 31, 2010 of $20,969 compared to $23,169 for the same period in 2009. Segment operating earnings net of income tax for the fourth quarter were $19,911 compared to $15,725 for the prior year quarter, an increase of 27%.The increase in segment operating earnings net of income tax was primarily a result of an increase in the Product Tanker segment earnings resulting from increased operating days and a reduction in costs. The Ocean Shipping segment also increased over the 2009 quarter, as the prior year quarter included the impact of a planned regulatory dry-docking. The decrease in net earnings of $2,200 was due primarily to the following:Increased income tax expense of $2,415 due primarily to reductions in the Corporation's future tax liabilities recorded in the 2009 fourth quarter to reflect decreases in the Ontario corporate income tax rate and a tax reduction due to an environmental allowance.Increase in financing costs of $3,662 due to the unfavourable adjustment required to recognize the fair value of certain foreign exchange forward contracts.Twelve-Month ResultsThe Corporation is reporting 2010 net earnings of $32,602 compared to net earnings of $38,845 for 2009 and segment operating earnings net of income tax increased 9% in 2010 to $33,634 compared to $30,717 for the previous year.The factors affecting the comparability of the segment operating earnings net of income tax is as follows:The Domestic Dry-Bulk segment's operating earnings net of income tax in 2010 improved to $5, 078 compared to $3,230 for 2009, due primarily to increased operating days and a reduction in operating costs.The Product Tanker segment's operating earnings net of income tax in 2010 were up strongly at $11,260 compared to $8,107 also due to increased operating days and a reduction in operating costs.The Ocean Shipping segment's operating earnings net of income tax decreased from $15,943 in 2009 to $14,013 due primarily to the foreign exchange effect of the stronger Canadian dollar versus the U.S. dollar in 2010 compared to 2009.The Real Estate segment's operating earnings net of income tax decreased from $3,437 in 2009 to $3,283 in 2010 due primarily to a gain realized in 2009 on a sale of a property and an increase in 2010 in general and administrative expenses."Building on the improvements we have experienced in 2010, we are cautiously optimistic heading into 2011," said Greg Wight, President and CEO. "We are hopeful that this recovery and growth will extend to all of our primary markets and we are investing significantly in fleet renewal based on our confidence in the long-term future of the marine transportation industry."The decrease in net earnings of $6,243 was due primarily to increases in financial and income tax expenses and a decrease in net foreign exchange gains on the translation of foreign denominated assets and liabilities.Financial expense in 2010 increased to $10,493 from $4,941 in 2009 as a result of the impact of a non-cash mark-to-market adjustment to recognize the fair value of certain foreign exchange forward contracts relating to the construction of four new maximum Seaway-sized dry-bulk lake freighters. Amortization of financing costs incurred in 2009 associated with the Corporation's expanded credit facilities also contributed to the increase.The net foreign exchange gains on the translation of foreign denominated assets and liabilities were $652 compared to a gain of $3,387 in 2009. The decrease was due to larger realized losses on the return of capital from foreign subsidiaries and a reduction in the gains related to the translation to Canadian dollars of the Corporation's foreign denominated debt. Both of these decreases compared to last year are a result of the strengthening Canadian dollar relative to the U.S. dollar.For further information: Greg D. Wight, FCA                                        President and Chief Executive Officer     905-687-7850                                                 Peter D. Winkley, CA Vice President, Finance and Chief Financial Officer 905-687-7897