Algoma Central Corporation - Operating Results

Aug 07, 2014

(In thousand of dollars except per share data)

For the Three and Six Months Ended June 30, 2014 and 2013


ST. CATHARINES, ON, Aug. 6, 2014 /CNW/ - The Corporation is reporting second quarter revenues of $138,333 compared to $144,930 for the same period in 2013. Increases in the Ocean Shipping and Real Estate segments were more than offset by reductions in the Domestic Dry-Bulk and Product Tankers segments related to the delayed start and difficult operating conditions at the beginning of the 2014 navigation season.

Segment earnings after income taxes were $16,641 compared to $20,953 for the second quarter in 2013. All segments are reporting decreased second quarter earnings, most significantly in the Domestic Dry-Bulk segment. The harsh winter conditions and extensive ice coverage lasting into May affected the start of the 2014 navigation season, causing significant schedule disruptions, delays, and extended trip times.

Net earnings and basic earnings per share were $14,946 and $0.38, respectively, compared to $19,381 and $0.50, respectively, for the same period last year. The lower net earnings were driven by the lower segment earnings.

Six Month Results

The Corporation is reporting revenues for the 2014 six month period of $190,071 compared to $195,687 for the first six months of 2013. The decrease was driven by the domestic fleets as a result of fewer domestic dry-bulk and domestic tanker operating days during the winter months in 2014, and a slower start to their respective seasons this year.

The segment loss after income taxes was $3,670 for the 2014 six month period compared to a loss of $5,258 for the first six months of 2013. Improved earnings for the Domestic Dry-Bulk segment as a result of reduced spending on winter maintenance more than offset lower earnings in the Product Tankers, Ocean Shipping and Real Estate segments year-over-year.

The net loss and basic loss per share were $6,920 and $0.18, respectively, compared to $9,254 and $0.24, respectively, for the same period last year. The net loss for 2014 includes a lower net gain on foreign currency translation of $1,705 compared to $2,797 for the same period in 2013.

The results from operations are as follows:

Three Months Ended
June 30
Six Months Ended
June 30
2014 2013 2014 2013
Business segment operating
earnings (loss) net of income tax
Domestic Dry-Bulk $ 9,979 $ 13,119 $ (15,958) $ (18,736)
Product Tankers 2,564 3,475 4,298 4,917
Ocean Shipping 3,559 3,771 7,243 7,556
Real Estate 539 588 747 1,005
16,641 20,953 (3,670) (5,258)
Not specifically identifiable to segments
Net gain on foreign currency
translation 985 711 1,705 2,797
Interest expense (1,961) (2,603) (5,181) (5,114)
Interest income (392) 55 (100) 199
Income tax (expense) recovery (327) 265 326 (1,878)
$ 14,946 $ 19,381 $ (6,920) $ (9,254)
Basic earnings per share $ 0.38 $ 0.50 $ (0.18) $ (0.24)

Cash Dividends
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 2, 2014 to shareholders of record on August 19, 2014.

Conference Call
Algoma will hold a conference call on Thursday, August 7, 2014 at 10:00 am EST to discuss the results for the three and six months ended June 30, 2014.

This call will be webcast live at 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 18 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 provides ship management services for other ship owners and 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.

Cautionary Statements
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 14 to 19 of Algoma's Annual Information Form for the year ended December 31, 2013, which is available on SEDAR at

SOURCE Algoma Central Corporation