Press release from CNW Group
Algoma Central Corporation - Operating Results
Thursday, August 08, 2013
Algoma Central Corporation - Operating Results17:08 EDT Thursday, August 08, 2013
For the Three and Six Months Ended June 30, 2013 and 2012
(In thousand of dollars except per share data)
TORONTO, Aug. 8, 2013 /CNW/ - The Corporation is reporting net earnings for the three months ended June 30, 2013 of $19,381 compared to $20,250 for the same period in 2012. Earnings per share for the quarter were $0.50 compared to $0.52 for the same period in 2012.
For the six-months ended June 30, 2013, the Corporation is reporting a net loss of $9,254 and a loss per share of $0.24 compared to a net loss of $11,716 and a loss per share of $0.30 for the same period in 2012.
Consolidated revenues for the three months ended June 30, 2013 decreased from $157,233 to $144,930. For the six-months ended June 30, 2013, revenues were $195,687 compared to $214,184 for the same period in 2012. The decreases were due primarily to reductions in operating days of the Domestic Dry Bulk segment related to vessel incidents, a return to more normal winter conditions in 2013, a slower start to the regular shipping season and low water levels early in the second quarter of 2013, which impacted cargo volumes.
The results from operations are as follows:
|Three Months Ended||Six Months Ended|
|June 30||June 30|
|Operating earnings (loss) net of income tax|
|Not specifically identifiable to segments|
|Net gain (loss) on foreign currency|
|Income tax recovery (expense)||325||(1,367)||(1,538)||(1,118)|
|Net earnings (loss)||$||19,381||$||20,250||$||(9,254)||$||(11,716)|
Domestic Dry Bulk
Domestic Dry-Bulk segment operating earnings net of income tax for the second quarter decreased from $20,193 in 2012 to $13,119 in 2013 due primarily to fewer operating days resulting from vessel incidents and increases in crew and repair costs. Great Lakes water levels also had an impact early in the quarter as low levels reduced the volumes of cargos that could be carried on some routes. By quarter end, water levels had returned to levels comparable to the prior year.
The Domestic Dry-Bulk segment operating loss net of income tax for the first six-months increased from $14,743 in 2012 to $18,736. A return to more normal winter conditions in 2013 and a slower start to the regular shipping season, combined with incidents that caused ships to be out of service and low water levels at the beginning of the quarter resulted in reduced operating days and lower cargo volumes. Partially offsetting these decreases were lower repair costs, depreciation and insurance expense.
The Product Tanker segment operating earnings net of income tax for the second quarter increased from $2,972 to $3,475 due to strong results from domestic tankers and a reduction in professional fees incurred in 2012 in connection with the arbitration process related to the refund of deposits on rescinded contracts to build three product tankers for international service. On April 30, the London Arbitration Panel found in favour of Algoma in all matters related to this cancellation. Algoma began collection activities for the refund of the construction deposits in the quarter; however, collection proceedings have been stayed while the shipyard seeks leave to appeal the decision.
The Product Tanker segment operating earnings net of income tax for the first six-months increased from $3,415 to $4,917. The factors contributing to the increase in earnings were additional operating days for the domestic tankers due to strong customer demand and fewer days in regulatory dry-docking combined with a decrease in repair costs. In 2013 to June 30, there were no regulatory dry-dockings versus two regulatory dry-dockings in the same 2012 period. Earnings for 2012 also reflected the legal cost associated with the contract cancellation arbitration.
Operating earnings net of income tax for the Ocean Shipping segment for the three months ended June 30, 2013 were $3,711 compared to $1,969 for the same period in 2012. The increase was due primarily to additional operating days in 2013 as there was a regulatory dry-docking in the 2012 second quarter compared to none in the current year quarter.
The operating earnings net of income tax for the Ocean Shipping segment for the six months ended June 30, 2013 were $7,216 compared to $6,473 for the same period in 2012. The improvement was a result of increased operating days as there were no regulatory dry-dockings in 2013 versus two in 2012. Earnings for 2012 included amounts recognized in the first quarter from the settlement and collection of revenue relating to contract periods prior to 2012 which had not previously met the Corporation's revenue recognition criteria. Partially offsetting the improvements in earnings is the reduced capacity due to the sale of the Ambassador in late 2012 and poor operating conditions during the month of February 2013.
The Real Estate segment operating earnings net of income tax decreased from $709 and $1,572 for the three and six month periods ended June 30, 2012 to $588 and $1,005 for the corresponding 2013 periods. The decreases were due primarily to vacancies in Sault Ste. Marie and Waterloo.
Net earnings for the second quarter include foreign currency gains totalling $711, compared to total foreign currency losses of $1,539 for the second quarter of 2012. Currency gains for the first six months of 2013 totalled $2,797 versus a loss of $1,574 for the same period last year.
The Board of Directors has authorized payment of a quarterly cash dividend to shareholders of $0.07 per common share. The cash dividend is payable on September 3, 2013 to shareholders of record on August 20, 2013.
Algoma will hold a conference call on Friday, August 9, 2013 at 10:00 am EST to discuss the results for the three and six months ended June 30, 2013.
This call will be webcast live at http://www.newswire.ca/en/webcast/detail/1203211/1319501, following which it will be available in archived format.
About Algoma Central Corporation
Algoma 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, six 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 - St. Lawrence Waterway 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 www.marinedelivers.com website.
This 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, 2012, which is available on SEDAR at www.sedar.com.
SOURCE: Algoma Central Corporation
For further information:
Greg D. Wight, FCA
President and Chief Executive Officer
Peter D. Winkley, CA
Vice President, Finance and Chief Financial Officer