(All dollar amounts are stated in thousands of dollars)
Agoma Central reported that its consolidated revenues for the three months ended June 30, 2013 decreased from $157,233 to $144,930. For the six-months ended June 30, 2013, revenues were $195,687 compared to $214,184 for the same period in 2012. Net earnings for the three months ended June 30, 2013 of $19,381 were reported, compared to $20,250 for the same period in 2012. For the six-months ended June 30, 2013, the Corporation reported a net loss of $9,254, compared to a net loss of $11,716 for the same period in 2012.
The decreases in revenues were due primarily to reductions in operating days of the Domestic Dry-Bulk segment related to vessel incidents, a return to more normal winter conditions in 2013, a slower start to the regular shipping season and low water levels early in the second quarter of 2013, which impacted cargo volumes.
Domestic Dry-Bulk segment operating earnings net of income tax for the second quarter decreased from $20,193 in 2012 to $13,119 in 2013 due primarily to fewer operating days resulting from vessel incidents and increases in crew and repair costs. Great Lakes water levels also had an impact early in the quarter as low levels reduced the volumes of cargos that could be carried on some routes. By quarter end, water levels had returned to levels comparable to the prior year. The Domestic Dry-Bulk segment operating loss net of income tax for the first six-months increased from $14,743 in 2012 to $18,736. A return to more normal winter conditions in 2013 and a slower start to the regular shipping season, combined with incidents that caused ships to be out of service and low water levels at the beginning of the quarter resulted in reduced operating days and lower cargo volumes. Partially offsetting these decreases were lower repair costs, depreciation and insurance expense.
The Product Tanker segment operating earnings net of income tax for the second quarter increased from $2,972 to $3,475 due to strong results from domestic tankers and a reduction in professional fees incurred in 2012 in connection with the arbitration process related to the refund of deposits on rescinded contracts to build three product tankers for international service. On April 30, the London Arbitration Panel found in favour of Algoma in all matters related to this cancellation. Algoma began collection activities for the refund of the construction deposits in the quarter; however, collection proceedings have been stayed while the shipyard seeks leave to appeal the decision. The Product Tanker segment operating earnings net of income tax for the first six-months increased from $3,415 to $4,917. The factors contributing to the increase in earnings were additional operating days for the domestic tankers due to strong customer demand and fewer days in regulatory dry-docking combined with a decrease in repair costs. In 2013 to June 30, there were no regulatory dry-dockings versus two regulatory dry-dockings in the same 2012 period. Earnings for 2012 also reflected the legal cost associated with the contract cancellation arbitration.
Operating earnings net of income tax for the Ocean Shipping segment for the three months ended June 30, 2013 were $3,711 compared to $1,969 for the same period in 2012. The increase was due primarily to additional operating days in 2013 as there was a regulatory dry-docking in the 2012 second quarter compared to none in the current year quarter. The operating earnings net of income tax for the Ocean Shipping segment for the six months ended June 30, 2013 were $7,216 compared to $6,473 for the same period in 2012. The improvement was a result of increased operating days as there were no regulatory dry-dockings in 2013 versus two in 2012. Earnings for 2012 included amounts recognized in the first quarter from the settlement and collection of revenue relating to contract periods prior to 2012 which had not previously met the Corporation’s revenue recognition criteria. Partially offsetting the improvements in earnings is the reduced capacity due to the sale of the Ambassador in late 2012 and poor operating conditions during the month of February 2013.
The Real Estate segment operating earnings net of income tax decreased from $709 and $1,572 for the three and six month periods ended June 30, 2012 to $588 and $1,005 for the corresponding 2013 periods. The decreases were due primarily to vacancies in Sault Ste. Marie and Waterloo.
Net earnings for the second quarter include foreign currency gains totalling $711, compared to total foreign currency losses of $1,539 for the second quarter of 2012. Currency gains for the first six months of 2013 totalled $2,797 versus a loss of $1,574 for the same period last year.