Algoma Central Corporation announced its results for the quarter ended June 30, 2017.
Second quarter highlights include:
• Total revenues of $123.9 million, up 25.1 per cent over the same period of 2016.
• Total net earnings more than doubled from $13.3 million to $29.2 million. Net earnings from continuing operation of $15.4 million represented an increase of 21 per cent, compared to $12.7 million for the same period in 2016.
• Revenue for Domestic Dry-Bulk up 26 per cent to $80.9 million. Net earnings for the segment increased 102% to $16.2 million, on strong volumes in the major commodity markets served by the company.
• Revenues for Product Tankers were up 41 per cent on strong customer volumes. Unfortunately this did not translate into increased earnings as fleet availability was impacted by a vessel out-of-service issue. Net segment earnings amounted to $0.7 million, compared to earnings of $1.6 million during the comparable period of 2016.
• Although Pool earnings increased 9 per cent for the quarter, earnings for Ocean Self-Unloaders were down 52 per cent to $1.8 million, reflecting the timing of dry-dockings and the sale of one of two Marbulk-owned vessels during the second quarter of 2016, which resulted in a gain in the 2016 second quarter.
• The Company initiated a head count reduction in administrative support staff at its head office. These initiatives, which include early retirements and other terminations, will result in a 13 per cent reduction in head office staff once completed later this year.
• Sold three properties and our 50 per cent interest in a fourth property for net proceeds of $33.9 million and a net gain of $13.9 million.
• Eliminated refinancing risk and reduced overall borrowing costs by completing the issuance of $82.5 million in 5.25 per cent convertible debentures due June 30, 2024. The majority of the proceeds were used to redeem existing convertible debentures after the second quarter.
• For the six months ended June 30, Algoma reported revenues of $175.7 million (2016: $142.6 million) and total net earnings of $10.1 million (2016:$6.6 million).
“We experienced continued strong volumes and performance in our Domestic Dry-Bulk business in the second quarter, building on the solid markets we saw developing earlier in the year” said Ken Bloch Soerensen, CEO. We also saw very strong customer demand in Product Tankers; however, an unfortunate vessel breakdown prevented us from taking advantage of it. This vessel has since returned to service and we have taken other steps to meet this demand,” Mr. Soerensen continued.
Earnings from the discontinued real estate business were $13.8 million compared to $0.5 million last year, reflecting gains on properties sold during the quarter. In June, the Company suspended efforts to sell its Station Mall property as a result of uncertainty created by the restructuring of Sears Canada.