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Press release from CNW Group

Algoma Central Corporation Operating Results For the Three and Six Months Ended June 30, 2011 and 2010

Thursday, August 04, 2011

Algoma Central Corporation Operating Results For the Three and Six Months Ended June 30, 2011 and 201009:49 EDT Thursday, August 04, 2011ALC-TTORONTO, Aug. 4, 2011 /CNW/ -(Reported under International Financial Reporting Standards)(In thousand of dollars except per share data) Three MonthsEnded June 30Six Months Ended June 30 20112010 20112010     Revenue  $ 156,220$  107,852$ 213,406$ 162,617     Net earnings (loss)  $ 17,496$ 10,939$ 483$ (6,263)     Basic earnings (loss) per common share  $ 4.50$ 2.81$ 0.12$ (1.61)     Dividends paid per common share  $ 0.45$ 0.45$ 0.90$ 0.90Second Quarter ResultsThe Corporation is reporting net earnings for the three months ended June 30, 2011 of $17,496 compared to net earnings of $10,939 for the same period in 2010.The increase was due primarily to improved operating results of the business units, the acquisition of the non-controlling interest in Seaway Marine Transport and increased foreign exchange gains. Partially offsetting these improvements were the adverse impact of a non-cash mark-to-market adjustment recognizing the fair value of certain foreign exchange forward contracts and an increase in financing costs.The Domestic Dry-Bulk segment's operating earnings net of income tax increased from $7,812 to $10,603. The improvement was due primarily to the increase in the Corporation's share of earnings in Seaway Marine Transport ("SMT"). Effective April 14, 2011 the Corporation acquired the Upper Lakes Group Inc. ("ULG") fleet of domestic dry-bulk vessels  and its partnership interest in SMT and related entities ("the ULG Transaction"), resulting in all of the earnings of SMT post acquisition being attributable to the Corporation compared to approximately 59% of the earnings prior to the acquisition.  Higher operating costs on certain vessels partially offset the improvement.The Product Tanker segment operating earnings net of income tax increased from $1,694 to $3,640 mainly as a result of more operating days due to an increase in market demand and a decrease in direct operating expenses.The operating earnings net of income tax of the Ocean Shipping segment for the three months ended June 30, 2011 were $4,117 compared to $2,222 for the same period in 2010.  Earnings and costs for 2010 reflected the impact of regulatory dry-dockings of the Algoma Spirit,Algoma Guardian and the Algoma Discovery in preparation for the transfer to Great Lakes dry-bulk service.The Real Estate segment operating earnings net of income tax decreased from $861 to $758 mainly attributable to reduced revenue for the Station Mall in Sault Ste. Marie reflecting a decrease in occupancy while renovations are completed in anticipation of the opening of the Sportchek location.The increase in earnings due to the gain on the translation of foreign- denominated monetary assets and liabilities was a result of the strengthening of the Canadian dollar against the U.S. dollar.Financial expense increased to $4,912 from $1,288 in 2010 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, a reduction in capitalized interest and an increase in debt due to the ULG Transaction.Six-Month ResultsThe Corporation is reporting net earnings for the six months ended June 30, 2011 of $483 compared to a net loss of $6,263 for the same period in 2010. The improvement was due primarily to  better results of all business units, a reversal recorded in the 2011 first quarter of an impairment charge taken in prior years, and an increase in the gain on the translation of foreign-denominated assets and liabilities. These increases were partially offset with higher financial expense.The Domestic Dry-Bulk segment's operating loss net of income tax increased marginally from $12,295 in 2010 to $12,524 in 2011. The decrease in the loss resulting from the ULG Transaction was offset by increased vessel operating costs.The Product Tanker segment operating earnings net of income tax increased from $1,715 to $4,994 mainly as a result of more operating days due to an increase in market demand and a decrease in direct operating expenses.The operating earnings net of income tax of the Ocean Shipping segment were $7,041 compared to $4,708 for the same period in 2010. The increase occurred in the second quarter as outlined above.The Real Estate segment operating earnings net of income tax increased from $1,384 to $1,617 due primarily to additional earnings realized from the hotel which was in operation for the full period in 2011. 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