Algoma Central Corporation - Operating Results

Nov 05, 2014

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(In thousand of dollars except per share data)

For the Three and Nine Months Ended September, 2014 and 2013

(TSX : ALC)

ST. CATHARINES, ON, Nov. 5, 2014 /CNW/ -

Third Quarter Results

The Corporation is reporting third quarter revenues of $163,950 compared to $146,947 for the same period in 2013. Most of the increase in revenue was from the Domestic Dry-Bulk segment as a result of strong customer demand and high fleet utilization. The other three segments reported revenues that were similar in both periods.

Segment earnings after income taxes were $25,879 compared to $29,831 for the third quarter in 2013. The decrease was due to an impairment recorded in the quarter relating to a decline in value of major vessel parts and spares and to costs associated with two incidents in the quarter in the Domestic Dry-Bulk segment. Combined, these factors resulted in a $6,433 reduction in the Domestic Dry-Bulk segment earnings.

Net earnings and basic earnings per share were $24,367 and $0.63, respectively, compared to $28,328 and $0.73, respectively, for the same period last year.

Nine-Month Results

The Corporation is reporting revenues for the 2014 nine month period of $354,021 compared to $342,634 for the first nine months of 2013. The increase was driven primarily by the Domestic Dry- Bulk segment due to strong customer demand and high fleet utilization.

Segment earnings after income taxes were $22,209 for the 2014 nine month period compared to $24,573 for the first nine months of 2013, reflecting the second quarter results that were below expectations resulting primarily from the poor operating conditions in April and early May and to the third quarter factors mentioned above. These items were partially offset by stronger first quarter results related to lower spending on winter maintenance.

The net earnings and basic earnings per share were $17,448 and $0.45, respectively, compared to $19,074 and $0.49, respectively, for the same period last year. The net earnings for 2014 include a lower net gain on foreign currency translation of $913 compared to $2,344 for the same period in 2013. A reduction in the number of currency contracts outstanding and less volatility in the value of the Canadian dollar compared to the US dollar drove the reduction.

The results from operations are as follows:

Equinox Class

On October 31, 2014 the Canadian Wheat Board took delivery of the third Equinox Class gearless bulker, the CWB Marquis. This vessel departed for its voyage to Canada on November 4 with an Algoma crew on board and is expected to arrive in Canada in late December. The vessel will be managed technically and commercially by the Corporation.

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 December 1, 2014 to shareholders of record on November 17, 2014.

Conference Call

Algoma will hold a conference call on Thursday, November 6, 2014 at 11:00 am EST to discuss the results for the three and nine months ended September 30, 2014.

This call will be webcast live at http://www.newswire.ca/en/webcast/detail/1430662/1589490 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 eight product tankers, including one that formerly operated in international markets. Algoma also has interests in ocean dry-bulk 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 www.sedar.com.

SOURCE Algoma Central Corporation