(TSX : ALC)
ST. CATHARINES, ON,
May 5, 2017 /CNW/ - Algoma
Central Corporation ("Algoma") – www.algonet.com, a leading
provider of marine transportation services, today announced its
results for the quarter ended March 31,
2017.
First quarter highlights include (all amounts in C$000s, except
for per share data and unless otherwise noted):
- A 16% reduction in the net loss for the first quarter to
$19.1 million compared to a net loss
in the first quarter of 2016 of $22.9
million, excluding the impact of an unusual $16.2 million gain on settlement of refund
guarantees in 2016. Results for the first quarter typically reflect
a loss due to the reduced level of shipping activity during the
winter and the timing of maintenance spending.
- Revenue for Domestic Dry-Bulk was up 58% and the segment loss
was reduced 42% (excluding the impact of the refund guarantees in
2016) compared to the prior year as the mild but wet winter
resulted in a 16% increase in volumes, particularly in salt, which
had increased usage due to the frequent freeze/thaw cycle.
- Revenues for Product Tankers were up 37% and fleet utilization
was higher than the prior year as customer volumes were above those
of fiscal 2016. The loss for the segment was higher by $923 compared to last year due to dry-dock
spending in 2017 and the impact of 2016 dry-dockings on
depreciation expense, as well as discounted rates applied under an
amended service agreement with a major customer.
- Earnings for Ocean Self-Unloaders were down 76% reflecting a
35% reduction in Pool earnings and a change in the number of
vessels generating earnings in our Marbulk joint venture. During
fiscal 2016, Marbulk had two vessels generating earnings in the
first quarter compared to none in 2017. A dry-docking of the
Marbulk-owned Venture occurred during the 2017 first quarter and
Marbulk retired the Eastern Power in April last year.
- We completed the acqusition and fit-out of the Algoma
Strongfield and the vessel departed China for Canada at the beginning of April.
- The NovaAlgoma Cement Carriers fleet comprised nine operating
vessels at the end of the first quarter compared to three at the
end of March 2016. Earnings from this
joint venture were $666 compared to
$490 in 2016.
- Reduced Corporate overhead by 18% with a focus on cutting
discretionary spending.
"Our fiscal 2017 first quarter results reflect a sustainable
improvement in Domestic Dry-Bulk earnings partially offset by some
weakness in Ocean Self-Unloaders," said Ken
Bloch Soerensen, President and CEO of Algoma. "Corporate
initiatives to expand in global short sea shipping are bearing
fruit, with increased earnings from NovaAlgoma Cement Carriers and
the creation of NovaAlgoma Short-Sea Carriers shortly after the end
of the quarter," Mr. Soerensen continued.
The net loss from continuing operations for the quarter, which
excludes income from our discontinued real estate business, was
$20,147 compared to $7,959 for 2016. Earnings for 2016 include a gain
of $16,196 from the settlement of
certain refund guarantees. Excluding this item, the 2016 loss was
$24,155.
Earnings from the discontinued real estate business were
$1,042 compared to $1,264 last year. Five of the 14 properties
slated for sale were disposed of over the course of fiscal 2016.
Marketing of the balance of the properties is in process.
Results from operations for the first quarter were as
follows:
|
|
Three
Months
|
|
|
Ended March
31
|
|
|
2017
|
2016
|
|
|
|
|
|
|
|
Revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
Domestic
Dry-Bulk
|
|
$
|
18,401
|
$
|
11,659
|
|
Product
Tankers
|
|
|
11,681
|
|
8,515
|
|
Ocean
Self-Unloaders
|
|
|
18,657
|
|
20,303
|
|
|
$
|
48,739
|
$
|
40,477
|
|
|
|
|
|
|
|
|
Three
Months
|
|
|
Ended March
31
|
|
|
2017
|
2016
|
|
|
|
|
|
|
|
Operating (loss)
earnings net of income tax
|
|
|
|
|
|
|
|
|
|
|
|
|
Domestic
Dry-Bulk
|
|
$
|
(15,008)
|
$
|
(27,715)
|
|
Unrealized loss of
foreign currency exchange contracts
|
|
|
(1,003)
|
|
-
|
|
Gain on shipbuilding
contracts
|
|
|
-
|
|
16,196
|
|
|
|
(16,011)
|
|
(11,519)
|
|
|
|
|
|
|
|
Product
Tankers
|
|
|
(2,431)
|
|
(1,508)
|
|
Ocean
Self-Unloaders
|
|
|
1,723
|
|
7,268
|
|
Global Short Sea
Shipping
|
|
|
666
|
|
490
|
|
Corporate
|
|
|
(2,660)
|
|
(3,243)
|
|
|
|
|
|
|
|
Segment
loss
|
|
|
(18,713)
|
|
(8,512)
|
|
|
|
|
|
|
|
Not specifically
identifiable to segments:
|
|
|
|
|
|
|
Net loss on foreign
currency translation
|
|
|
(1,293)
|
|
(25)
|
|
Interest
expense
|
|
|
(1,167)
|
|
(2,936)
|
|
Interest
income
|
|
|
277
|
|
487
|
|
Income tax
recovery
|
|
|
749
|
|
3,027
|
|
|
|
|
|
|
|
Net loss from
continuing operations
|
|
|
(20,147)
|
|
(7,959)
|
|
Net earnings from
discontinued operations
|
|
|
1,042
|
|
1,264
|
|
|
|
|
|
|
|
Net
loss
|
|
$
|
(19,105)
|
$
|
(6,695)
|
|
|
|
|
|
|
|
Basic and Diluted
(Loss) Earnings per Share
|
|
|
|
|
|
|
Continuing
operations
|
|
$
|
(0.52)
|
$
|
(0.20)
|
|
Discontinuing
operations
|
|
|
0.03
|
|
0.03
|
|
|
|
|
|
|
|
|
$
|
(0.49)
|
$
|
(0.17)
|
Cash Dividends
The Board of Directors has declared a cash dividend of
$0.08 per common share to be paid on
June 1, 2017 to shareholders of
record on May 18, 2017. This reflects
a 14% increase in the dividend rate.
About Algoma Central
Algoma Central Corporation operates the largest Canadian flag
fleet of dry and liquid bulk carriers on the Great Lakes - St.
Lawrence Waterway, including self-unloading dry-bulk carriers,
gearless dry bulk carriers and product tankers. Algoma also owns
ocean self-unloading vessels operating in international markets.
Algoma provides ship management services for other ship owners. The
Company is expanding into global dry-bulk markets with investments
in businesses specializing in pneumatic cement carrying vessels and
in short-sea dry-bulk shipping.
SOURCE Algoma Central Corporation