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

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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   Six Months
Ended June 30 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 Six Months
Ended June 30 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 on 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   -   0.31   - 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.

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Business Wire: 12:00 GMT Friday 10th August 2018

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