Algoma Central Corporation reported net earnings for the three months ended June 30, 2012 of $20.5 million on revenues of $165.6 million compared to net earnings of $17.5 million on revenues of $156.2 million for the same period in 2011. The increase in earnings was due primarily to improved operating earnings of the Domestic Dry-Bulk segment.
The Domestic Dry-Bulk segment operating earnings, net of income tax, increased from $10,603 in 2011 to $20,460 in 2012. The increase was due primarily to the following factors:
• Improved mix of business resulting in more operating days for the self-unloaders,
• strong export ore volumes in the 2012 second quarter,
• lower repairs expense during the winter layup season,
• reduction in absorptions related to vessels incidents, and
• reduced general and administrative costs.
The Product Tanker segment operating earnings, net of income tax, decreased from $3.6 million to $3.3 million. Earnings from additional operating days were more than offset by an increase in direct costs.
Operating earnings, net of income tax, for the Ocean Shipping segment for the three months ended June 30, 2012 were $2.0 million compared to $4.1 million for the same period in 2011. The decrease was due primarily to the reduction in operating days and the repair costs associated with regulatory dry-dockings. There were no regulatory dry-dockings in the same period in 2011.
Real Estate segment operating earnings, net of income tax, decreased from $0.8 million to $0.7 million due primarily to an increase in general and administrative expenses.
Six-Month Results
The Corporation reports a net loss for the six months ended June 30, 2012 of $10.6 million, compared to net earnings of $0.5 million for the same period in 2011.
The Domestic Dry-Bulk segment’s operating loss, net of income tax, increased from $12.5 million in 2011 to $13.7 million in 2012. The increase in the loss was primarily due to the ULG transaction, resulting in the Corporation recognizing 100 per cent in 2012 versus 59 per cent in 2011 of the first quarter loss on the domestic dry-bulk fleet. Had the ULG Transaction occurred on January 1, 2011, the loss for the domestic dry-bulk segment for the first six months of 2011 would have been $27.6 million, an increase of $15.0 million compared to the reported figure. Taking this adjustment into account, the operating loss for the segment was reduced significantly in 2012 as a result of increased revenues, and reductions in repair, vessel incident and general and administrative costs.