Algoma Central Corporation reported a net loss for the three months ended March 31, 2012 of $31,140,000 compared to a net loss of $17,103,000 for the same period in 2011. The loss per common share was $8.00, compared with a loss of $4.37 during the same period in 2011. Revenues for the three months ended March 31, 2012 increased to $66,131,000, up from $57,186,000 during the period in 2011.
The increase in the loss was due primarily to the acquisition of the non-controlling interest in Seaway Marine Transport (SMT) in April 2011. Partially offsetting this increase was a reduction in the mark-to-market loss recognizing the fair value of certain foreign forward exchange contracts.
The comparability of the results for the first quarter of 2012 to those for the first quarter of 2011 is impacted significantly by the Corporation’s acquisition, in April 2011, of certain vessels and partnership interests owned by Upper Lakes Group (the ULG Transaction). The Corporation’s reported first quarter results for 2011 reflect only a 59 per cent interest in the business and the charter income from the Corporation’s vessels. Had the ULG Transaction occurred on January 1, 2011, the financial results for the first quarter of 2011 would have included additional revenues totaling $4,819,000 and the net loss would have increased by $15,405,000 ($3.96 per share-total loss for the 2011 quarter would therefore have been $8.33 per share) to reflect the inclusion of the former partner’s share of the first quarter loss from the business, net of charter income and depreciation expense on the vessels the Corporation acquired from Upper Lakes Group.
The Domestic Dry-Bulk segment operating loss net of income tax increased from $23,127,000 to $34,110,000. The increase was due primarily to the ULG Transaction, resulting in the Corporation recognizing 100 per cent versus 59 per cent of the first quarter loss of the domestic dry-bulk fleet. As noted above, had the ULG Transaction occurred on January 1, 2011, the loss for the domestic dry-bulk segment for the first quarter of 2011 would have been $38,532,000, an increase of $15,405,000 compared to the reported figure. Taking this adjustment into account, the operating loss for the segment improved quarter over quarter as a result of increased revenues from the business. Although, as is traditionally the case, portions of the Great Lakes / St. Lawrence Waterway were closed during the winter this year, the extremely mild winter conditions in much of the Great Lakes Basin allowed the Corporation to operate two dry-bulk vessels on the Great Lakes throughout the winter season.
The Product Tanker segment operating earnings net of income tax decreased from $1,354,000 to $433,000 mainly as a result of reduced operating days due to regulatory dry-dockings of two tankers and an increase in professional fees incurred in connection with the arbitration process related to the refund of deposits on contracts to build three product tankers which were rescinded by the Corporation.
The operating earnings net of income tax for the Ocean Shipping segment for the three months ended March 31, 2012 were $4,504,000 compared to $2,924,000 for the same period in 2011. The increase was due in part to increased revenue days as no vessels were on dry-dockings in 2012 versus one dry-docking in 2011and partly due to settlement and collection of dead freight revenue relating to contract periods prior to 2012.
The Real Estate segment operating earnings net of income tax increased from $859,000 to $863,000.
Algoma Central Corporation owns and operates the largest Canadian-flag fleet of dry and liquid-bulk carriers operating on the Great Lakes / St. Lawrence Waterway, including 19 self-unloading dry-bulk carriers, nine gearless dry bulk carriers and seven product tankers. Algoma also has interests in ocean dry-bulk and product tanker vessels operating in international markets. Algoma owns a diversified shiprepair and steel fabricating facility active in the Great Lakes and St. Lawrence regions of Canada. In addition, Algoma owns and manages commercial real estate properties in Sault Ste. Marie, St. Catharines and Waterloo, Ontario.