Algoma Central Corporation Reports Operating Results for the Three and Six Months Ended June 30, 2018

Aug 10, 2018


St. Catharines, Ontario (August 10, 2018) — Algoma Central Corporation (“Algoma” or “the Company”) (TSX: ALC), a leading provider of marine transportation services, today announced its results for the three and six months ended June 30, 2018.

All amounts reported below are in thousands of Canadian dollars, except for per share data and unless otherwise noted. Second quarter and year to date 2018 highlights include:

  • An increase in revenue of $15,295 in the second quarter and an increase of $23,691 for the six months ended June 30, 2018 compared to the same periods in 2017.
  • Net earnings and basic earnings per share from continuing operations for the six months ended June 30, 2018 were $5,303 and $0.14 compared to a loss of $4,048 and $0.10, respectively, during the same period last year. The increase was due to higher operating earnings including higher earnings from joint ventures.
  • For the second quarter of 2018:
    • Domestic Dry-Bulk revenues increased 11% and net earnings increased 19%, excluding impacts of gains and losses on foreign currency contracts, compared to 2017. The segment had strong volumes and a 4% increase in daily rates.
    • Product Tankers revenue increased $864 and net earnings increased by $1,127 compared to 2017. The segment experienced strong volumes and an increase in operating days.
    • Ocean Self-Unloaders net earnings increased 54% compared to the prior year. This was mainly as a result of the Algoma Integrity returning to full operations early in the quarter.
    • Global Short Sea Shipping revenue increased $7,831, resulting in a $3,496 increase in net earnings. Revenue for NACC increased as a result of the addition of three vessels to the fleet.

“We are very happy with the 2018 second quarter results,” said Ken Bloch Soerensen, President and CEO of Algoma. “Compared to last year, we experienced improved overall revenues, increased vessel utilization and further growth in the Global Short Sea fleet. The outlook for the second half of 2018 remains positive. Both the Domestic Dry-Bulk and Product Tanker fleets are fully booked for the season and we are exploring options to add capacity to the dry-bulk fleet,” Mr. Soerensen added.

“We are experiencing limited impact from the trade tensions,” said Gregg Ruhl, Chief Operating Officer of Algoma. “The Domestic Dry-Bulk fleet has been successful in securing replacement business to fill available days resulting from diversions of iron ore shipments to US destinations and we expect these changes to be earnings neutral,” Mr. Ruhl added.

Results from continuing operations for the second quarter 2018 and the six months ended June 30, 2018 compared to the same periods in 2017 were as follows:

Three Months ended
June 30

Six Months ended
June 30

2018

2017

2018

2017

Revenues

Domestic Dry-Bulk

$ 89,944

$ 80,979

$ 108,145

$ 99,380

Product Tankers

23,513

22,649

42,848

34,330

Ocean Self-Unloaders

23,097

17,515

42,001

36,172

136,554

121,143

192,994

169,882

Investment Properties

2,501

2,775

5,804

5,863

Corporate

387

229

1,132

494

$ 139,442

$ 124,147

$ 199,930

$ 176,239

Three Months ended
June 30

Six Months ended
June 30

2018

2017

2018

2017

Operating earnings (loss) net of income tax

Domestic Dry-Bulk

$ 15,126

$ 12,761

$ (939)

$ (2,247)

Unrealized (loss) gain of foreign currency exchange contracts

(2,454)

3,397

1,523

2,394

12,672

16,158

584

147

Product Tankers

1,794

667

2,475

(1,764)

Ocean Self-Unloaders

2,802

1,824

4,268

3,547

Global Short Sea Shipping

2,085

390

3,966

1,056

 

19,353

19,039

11,293

2,986

Investment Properties

91

(1,790)

492

(1,094)

Corporate

(2,348)

(3,374)

(4,200)

(5,762)

Segment operating earnings (loss)

17,096

13,875

7,585

(3,870)

Not specifically identifiable to segments

  Interest expense

(2,464)

(741)

(3,700)

(1,599)

  Interest income

197

201

404

405

  Foreign currency (loss) gain

(1,561)

1,864

1,164

914

  Income tax recovery (expense)

1,177

183

(150)

102

Net earnings (loss) from continuing operations

14,445

15,382

5,303

(4,048)

Net earnings from discontinued operations

 -

13,782

-

14,107

Net earnings

 $ 14,445

$ 29,164

 $ 5,303

$10,059

Basic Earnings (Loss) per Share

  Continuing operations

$ 0.38

$ 0.40

$ 0.14

($ 0.10)

  Discontinued operations

 -

0.35

 -

0.36

$ 0.38

$ 0.75

$ 0.14

$ 0.26

Diluted Earnings (Loss) per Share

  Continuing operations

$ 0.36

$ 0.37

$ 0.14

($ 0.10)

  Discontinued operations

-

0.15

-

0.32

$ 0.36

$ 0.68

$ 0.14

$ 0.22


Cash Dividends

On August 9, 2018 the Company’s Board of Directors authorized payment of a quarterly dividend to shareholders of $0.10 per common share. The dividend is payable on September 4, 2018 to shareholders of record on August 21, 2018.

Normal Course Issuer Bid

During the second quarter of 2018 and during the six months ended June 30, 2018, 45,800 and 52,400 shares, respectively, were purchased for cancellation.

About Algoma Central

Algoma Central Corporation is a publicly traded company which operates the largest 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 dry-bulk vessels operating in international markets. Algoma has expanded into international short sea markets through it 50% interests in NovaAlgoma Cement Carriers and NovaAlgoma Short Sea Carriers.  Algoma Central trades on the Toronto Stock Exchange under the symbol “ALC”. For more information, please visit www.algonet.com.

For further information please contact:


Ken Bloch Soerensen
President and Chief Executive Officer
+1 905-687-7885


Peter D. Winkley, CPA, CA
Chief Financial Officer
+1 905-687-7897