ST. CATHARINES, Ontario--(BUSINESS WIRE)--Algoma Central Corporation (TSX: ALC) (“Algoma” – www.algonet.com), a leading provider of marine transportation services, today announced its results for the quarter ended September 30, 2017.
“We are very pleased with the results for our third quarter and particularly the sustained strength in our Domestic Dry-Bulk business,” said Ken Bloch Soerensen, Algoma CEO. “We have taken steps to position ourselves to take advantage of improving markets in our core business and to seize opportunities in short-sea shipping globally. We are now seeing these efforts pay off,” Mr. Soerensen continued.
Third quarter highlights include (all amounts in C$000s, except for per share data and unless otherwise noted):
- Revenue for Domestic Dry-Bulk was up 9.3% on strong volumes in the major commodity markets we serve. Net earnings from the Domestic Dry-Bulk segment in the third quarter increased 26.2% over the same period in 2016, excluding the impact of unrealized foreign currency losses and net gain on the cancellation of the shipbuilding contracts.
- Ocean Self-Unloaders revenues grew 30% and earnings for the quarter were up 10%.
- Revenues for Product Tankers were up 35.6% on strong customer volumes although earnings dropped as a result of lower contract rates.
- During the third quarter, the Company sold four properties held for sale in the discontinued real estate segment for net proceeds of $20,015.
- The Company experienced a 23.5% increase in net earnings from continuing operations for the third quarter over the same period in 2016 (excluding the net gain on the cancellation of the shipbuilding contracts recognized in 2016). Inclusive of this net gain, net earnings from continuing operation were $22,517 ($0.58 per share) for the third quarter in 2017.
- In July 2017, the Company acquired the partially completed Algoma Conveyor under the terms of a bankruptcy liquidation of the Nantong Mingde shipyard. The vessel is now at Yangzijiang Shipyard where final construction will be completed for delivery early in 2019.
- In September 2017, the Company took delivery of the Algoma Niagara in China and the vessel is expected to begin operating commercially in early November in the Domestic Dry-Bulk segment.
Results for the third quarter were as follows:
| Three Months | Nine Months | |||||||||||
| Ended September 30 | Ended September 30 | |||||||||||
| 2017 | 2016 | 2017 | 2016 | |||||||||
| Revenues | ||||||||||||
| Domestic Dry-Bulk | $ | 89,539 | $ | 81,900 | $ | 188,919 | $ | 157,671 | ||||
| Product Tankers | 25,247 | 18,839 | 59,577 | 43,395 | ||||||||
| Ocean Self-Unloaders | 18,902 | 14,594 | 55,074 | 50,946 | ||||||||
| Investment Properties | 2,868 | 2,895 | 8,731 | 8,816 | ||||||||
| $ | 136,556 | $ | 118,228 | $ | 312,301 | $ | 260,828 | |||||
| Three Months | Nine Months | |||||||||||
| Ended September 30 | Ended September 30 | |||||||||||
| 2017 | 2016 | 2017 | 2016 | |||||||||
| Operating earnings (loss) net of income tax | ||||||||||||
| Domestic Dry-Bulk | $ | 15,992 | $ | 12,673 | $ | 13,745 | $ | (7,058) | ||||
| Unrealized (loss) gain on foreign currency contracts | (1,291) | - | 1,103 | - | ||||||||
| Gain on cancellation of shipbuilding contracts | - | 6,126 | - | 22,322 | ||||||||
| 14,701 | 18,799 | 14,848 | 15,264 | |||||||||
| Product Tankers | 4,596 | 5,003 | 2,832 | 5,131 | ||||||||
| Ocean Self-Unloaders | 4,553 | 2,249 | 8,100 | 13,279 | ||||||||
| Global Short Sea Shipping | 1,472 | 734 | 2,529 | 2,126 | ||||||||
| Corporate | (2,310) | (2,429) | (8,128) | (7,726) | ||||||||
| Segment earnings | 23,012 | 24,356 | 20,181 | 28,074 | ||||||||
| Not specifically identifiable to segments: | ||||||||||||
| Investment properties | 810 | 1,047 | (679) | 2,692 | ||||||||
| Gain on foreign exchange | 693 | 1,081 | 1,937 | 3,524 | ||||||||
| Interest expense | (1,930) | (2,127) | (4,106) | (8,086) | ||||||||
| Interest income | 348 | (52) | 899 | 869 | ||||||||
| Income tax (expense) recovery | (416) | 120 | 237 | 2,743 | ||||||||
| Net earnings from continuing operations | 22,517 | 24,425 | 18,469 | 29,816 | ||||||||
| Net earnings from discontinued operations | 10,251 | 14,077 | 24,358 | 15,252 | ||||||||
| Net earnings | $ | 32,768 | $ | 38,502 | $ | 42,827 | $ | 45,068 | ||||
| Basic Earnings per Share | ||||||||||||
| Continuing operations | $ | 0.58 | $ | 0.63 | $ | 0.47 | $ | 0.77 | ||||
| Discontinued operations | 0.26 | 0.36 | 0.63 | 0.39 | ||||||||
| $ | 0.84 | $ | 0.99 | $ | 1.10 | $ | 1.16 | |||||
Cash Dividends
The Company also announces a 12.5% increase in its cash dividend to $0.09 per common share. The dividend will be paid on December 1, 2017 to shareholders of record on November 17, 2017.
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.