(TSX : ALC)
ST. CATHARINES, ON,
Feb. 19, 2016 /CNW/ - Algoma
Central Corporation ("Algoma" – www.algonet.com) today announced
results for its 2015 fourth quarter and fiscal year. During the
fourth quarter, the Company announced its intention to divest of
its real estate portfolio. The results for the periods reported on
have been restated to reflect the real estate segment as a
discontinued operation.
For the year, the Company's consolidated revenues were
$413.5 million compared to
$473.4 million in 2014. Fuel
costs, which are largely passed on to customers through our freight
rates, declined significantly during the year and approximately
$38 million of the decrease in
revenue is a direct result of the pass-through effect of decreased
fuel costs. The balance of the decrease in revenues results from a
drop in rates earned due to stiff competition in our domestic
dry-bulk business and to a drop in volumes carried in our product
tanker and ocean dry-bulk business units.
Net earnings and earnings per share from continuing operations
for the year were $21,069 and
$0.54, respectively, compared to
$48,977 and $1.26 for the prior year period. The decrease in
earnings year-over-year was driven primarily by the drop in
revenues and partially offset by a gain resulting from the
cancellation of shipbuilding contracts earlier in 2015.
Business conditions softened noticeably in the second half of
2015 and revenues for the fourth quarter were $119,170 compared to $141,646 in the same period last year. Net
earnings and earnings per share from continuing operations for the
fourth quarter were $8,973 and
$0.23, respectively, compared to
$34,222 and $0.88 in 2014. Revenues and earnings from all
business segments were negatively impacted by softer market
conditions that resulted in lower demand and reduced customer
volumes.
At year end we made the difficult decision to retire five
domestic dry-bulk vessels and a product tanker that had reached the
end of its economic life. Our decision to retire the dry-bulk
vessels reflects our view that the current domestic market capacity
exceeds customer demand and certain of our older vessels are no
longer economic to operate in these market conditions. As a result
of taking these vessels out of service we have accelerated
depreciation on them and recorded an additional depreciation charge
in the domestic dry-bulk segment in the fourth quarter of
$3.3 million.
During 2015, Algoma introduced its new strategic vision for the
Company to pursue growth opportunities beyond the traditional
domestic markets in which we operate. In November, we announced the
first growth investment with the acquisition of two vessels then
belonging to one of our partners in the International Pool and the
purchase of a 50% interest in a third vessel. This transaction
closed in January 2016 and these
vessels will contribute to Algoma earnings for all of 2016. As a
result of these purchases, our interest in the Pool has
doubled.
Shortly after year-end, we announced a second initiative with
the purchase of a 50% interest in an existing operator of pneumatic
cement carriers. This transaction also closed in January and will
contribute to earnings beginning in the first quarter.
On February 16, 2016, we announced
that the London Arbitration Panel hearing our Mingde shipbuilding
contract cancellation dispute issued an award in our favour on
three of the four outstanding claims. We have begun collection
proceedings on these refund claims, which are valued at
US$53,167 as at February 16th.
|
Three Months
Ended December 31
|
Twelve Months
Ended December 31
|
Revenues
|
2015
|
2014
|
2015
|
2014
|
|
|
|
|
|
Domestic
Dry-Bulk
|
$
|
92,081
|
$
|
106,567
|
$
|
299,553
|
$
|
337,244
|
Product
Tankers
|
16,426
|
25,221
|
75,335
|
95,152
|
Ocean
Shipping
|
10,663
|
9,858
|
38,605
|
41,050
|
|
|
|
|
|
|
$
|
119,170
|
$
|
141,646
|
$
|
413,493
|
$
|
473,446
|
|
|
|
|
|
Operating income
net of tax
|
|
|
|
|
|
|
|
|
|
Domestic
Dry-Bulk
|
$
|
6,531
|
$
|
16,221
|
$
|
5,803
|
$
|
16,172
|
Product
Tankers
|
788
|
15,218
|
10,185
|
24,456
|
Ocean
Shipping
|
2,273
|
3,321
|
10,806
|
13,648
|
|
|
|
|
|
|
9,592
|
34,760
|
26,794
|
54,276
|
Not specifically
identifiable to segments
|
|
|
|
|
|
Net gain on foreign
currency translation
|
558
|
(28)
|
3,789
|
885
|
|
Interest
expense
|
(3,765)
|
(2,568)
|
(13,280)
|
(10,139)
|
|
Interest
income
|
324
|
273
|
1,270
|
320
|
|
Income tax
recovery
|
2,264
|
1,785
|
2,496
|
3,635
|
|
|
|
|
|
Net earnings from
continuing operations
|
$
|
8,973
|
$
|
34,222
|
$
|
21,069
|
$
|
48,977
|
Basic earnings per
share
|
$
|
0.23
|
$
|
0.88
|
$
|
0.54
|
$
|
1.26
|
Additional details on the results can be found in the Company's
Consolidated Financial Statements and Management Discussion and
Analysis for the period.
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
will be paid on March 1, 2016 to
shareholders of record on February 16,
2016.
About Algoma Central Corporation
Algoma Central Corporation operates the largest Canadian flag
fleet of dry and liquid bulk carriers on the Great Lakes - St.
Lawrence Waterway, including 13 self-unloading dry-bulk carriers,
seven gearless dry bulk carriers and six product tankers. The
Company has announced contracts for seven new Equinox Class
domestic dry-bulk vessels as part of its on-going fleet renewal
program. Algoma also owns four ocean dry-bulk vessels operating in
international markets and has a 50% in three other oceans dry-bulk
vessels. 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 2016, Algoma announced a new
strategic initiative to grow into attractive global niche markets,
beginning with a fifty percent interest in a pneumatic cement
carrier business.
SOURCE Algoma Central Corporation