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Press release from CNW Group

Algoma Central Corporation - Operating Results

Friday, February 22, 2013

Algoma Central Corporation - Operating Results16:05 EST Friday, February 22, 2013ALC-TTORONTO, Feb. 22, 2013 /CNW/ -For the Three and Twelve Months Ended December 31, 2012 and 2011(In thousand of dollars except per share data)              Three Months EndedTwelve Months Ended    December 31December 31     2012 2011 2012 2011            Revenue    $155,176 $185,050 $560,377 $582,690            Net earnings   $24,527 $  33,358 $43,819 $68,844            Basic earnings per common share $0.63 $0.86 $1.13 $1.77            Diluted earnings per common share $0.60 $0.84 $1.10 $1.68            Dividends paid per common share $0.060 $0.045 $0.220 $0.180  Fourth Quarter ResultsThe Corporation is reporting net earnings for the three months ended December 31, 2012 of $24,527 compared to net earnings of $33,358 for the same period in 2011.The Domestic Dry-Bulk segment's operating earnings net of income tax decreased from $23,791 in 2011 to $21,026 in 2012.  The Product Tanker segment's operating earnings net of income tax also decreased from $3,779 in 2011 to $2,755 in 2012.  The decreases in both segments were the result of a reduction in vessel utilization during the fourth quarter and an unfavourable revenue variance versus 2011, offset by a reduction in vessel operating costs in both segments.The operating earnings net of income tax of the Ocean Shipping segment decreased to $3,552 in 2012 compared to $6,089 for the same period in 2011 due to the timing of regulatory dry-dockings which was partially offset by a gain on the sale of the vessel, the M.V. Ambassador.The Real Estate segment operating earnings net of income tax increased from $648 to $816 due primarily to income tax adjustments in 2012.Financial expense decreased from $3,724 in 2011 to $977 in 2012.  The decrease was due to the mark-to-market adjustment of the fair value of certain foreign exchange contracts, a result of the weakening of the Canadian dollar against the U.S. dollarTwelve-Month ResultsThe Corporation is reporting net earnings for the twelve months ended December 31, 2012 of $43,819 compared to net earnings of $68,844 for the same period in 2011. The main factor impacting the comparability of 2012 and 2011 was the timing of the acquisition of the Upper Lakes Group Inc. (ULG) transaction in 2011.  Had the transaction occurred at January 1, 2011 instead of April 14, 2011 the reported net earnings for 2011 would have been reduced by $14,197 million to $54,647.The Domestic Dry-Bulk segment's operating earnings net of income tax decreased from $36,573 in 2011 to $31,644. The comparability of the results for 2012 to 2011 for the Domestic Dry-Bulk segment has been affected by the ULG Transaction, resulting in the Corporation recognizing 100% domestic dry-bulk operations in 2012 while in 2011 we recognized only 59% of the first quarter loss on the domestic dry-bulk fleet.  Had the ULG Transaction occurred on January 1, 2011, the Domestic Dry-Bulk segment would have reported operating earnings net of income tax for 2011 of $22,376, a decrease of $14,197 compared to the reported figure.  Taking this adjustment into account, the operating earnings for this segment have increased significantly in 2012, primarily as a result of improved mix of business and reductions in direct costs.The Product Tanker segment operating earnings net of income tax decreased from $13,695 to $9,270 mainly as a result of fewer operating days due to two regulatory dry-dockings in 2012 versus none in 2011 and increased professional fees in connection with the arbitration process related to the refund of deposits on rescinded contracts to build three product tankers for international service.The operating earnings net of income tax of the Ocean Shipping segment for 2012 were $14,999 compared to $15,476 for 2011.  The decrease resulted from reduced vessel revenues due to sale of the Ambassador in 2012 and an increase in costs related to dry-dockings which offset other operating income improvements.The Real Estate segment operating earnings net of income tax decreased from $3,383 in 2011 to $3,114 in 2012 due to the decreases in occupancy and an increase in depreciation expense.Financial expense for 2012 was $11,640 compared to $8,568 for 2011.  The increase of $3,072 was due primarily to  mark-to-market adjustment recognizing the change in the period in the fair value of certain currency contracts.Other factors affecting the comparability of the 2012 results with 2011 include an increase in 2012 in the loss on the translation of foreign-denominated assets and liabilities, a revaluation gain recognized on an asset held for sale and a larger impairment reversal recorded in 2011 that were not reported in 2012.Income tax expense for 2012 was $18,758 compared to $13,685 for the previous year.  Included in 2012 is $3,254 relating to the Province of Ontario announcement that it will defer indefinitely planned reductions to the corporate tax rate.Conference Call Algoma will hold a conference call on Monday, February 25, 2012 at 11:00 pm EST to discuss the results for the three and twelve months ended December 31 ,2012.This call will be webcast live at, following which it will be available in archived format.About Algoma Central CorporationAlgoma Central Corporation owns and operates the largest Canadian flag fleet of dry and liquid bulk carriers operating on the Great Lakes - St. Lawrence Waterway, including 19 self-unloading dry-bulk carriers, seven gearless dry bulk carriers and seven product tankers. Algoma also has interests in ocean dry-bulk and product tanker vessels operating in international markets. Algoma owns a diversified ship repair and steel fabricating facility active in the Great Lakes and St. Lawrence regions of Canada. In addition, Algoma owns and manages commercial real estate properties in Sault Ste. Marie, St. Catharines and Waterloo, Ontario.A recently published economic impact study, commissioned by Marine Delivers, demonstrates the significant role that the Great Lakes / Seaway system plays in supporting the Canadian and U.S. economies.  Some 227,000 jobs and $35 billion in economic activity are supported by the movement of goods within the Great Lakes / Seaway waterway. For more information, including access to the full text of the economic impact study, please consult the website.Cautionary StatementsThis press release may include forward-looking information within the meaning of applicable securities laws including information concerning the business and future results of Algoma. Forward-looking statements in this press release include statements about the purchase of vessels by Algoma. Readers are cautioned to not place undue reliance on forward-looking information. Actual results and developments may differ materially from those contemplated by this information. The statements in this press release are made as of the date of this release and are based on current expectations. Algoma undertakes no obligation to update forward-looking information, other than as required by law, or to comment on analyses, expectations or statements made by third-parties in respect of Algoma, its financial or operating results or its securities. Algoma cautions that all forward-looking information is inherently uncertain and actual results may differ materially from the assumptions, estimates or expectations reflected or contained in the forward-looking information, and that actual future results could be affected by a number of factors, many of which are beyond Algoma's control, including economic circumstances, technological changes, weather conditions and the material risks and uncertainties identified by Algoma and discussed on pages 13 to 17 of Algoma's Annual Information Form for the year ended December 31, 2011, which is available on SEDAR at SOURCE: Algoma Central CorporationFor 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