Both of Canada’s major railways felt the effects of a poor weather and cold temperatures, and produced similar financial results. As is evident from the table, net income as a percentage of revenues tumbled dramatically from 34 per cent in the first quarter of 2016 to 21 per cent in 2018 at CP, but recovered to 24.6 per cent in the first quarter of 2019. At CN, net income as a percentage of revenues dropped from 26.7 per cent in 2016 to 23.2 per cent in 2018, and further declined to 22.2 per cent in Q1 of 2019. Both carriers eased up on their share repurchasing activities. Stock repurchases increase earnings per share numbers, as earnings are divided by a reduced number of outstanding shares. (more…)
CN maximizing the use of rail into Port of Prince Rupert, and reports record grain shipments in April
The first train of thermal coal from Coalspur’s Vista Mine in Hinton, Alberta has shipped to Ridley Terminals. CN is also delivering the first unit train of propane from Alberta for export via the new AltaGas Ridley Island Propane Export Terminal.
“I’m very proud to announce the start of these new export supply chains to Asia,” said JJ Ruest, CN’s President and CEO. “Our objective is to help create export supply chains that get national resources to the best markets for our customers. These projects support jobs and increase Canada’s role as an international energy provider into Asia. As these new projects and our record grain movements for the month of April demonstrate, our capital investments are strengthening our existing network and expanding our capacity to move more western Canadian natural resources to market safely and efficiently.” (more…)
By Keith Norbury
Canada’s two major railways are embarking on some cool endeavours to build their refrigerated and temperature-controlled cargo business. For instance, the larger of the two, Canadian National Railway, recently wrapped up the acquisition of a major trucking company that specializes in refrigerated cargo. Meanwhile, Canadian Pacific Railway, recently brought into service 423 new 53-foot refrigerated containers and another 363 heated 53-foot containers. (more…)
2018 was a great year for both of Canada’s railways.
For the fourth quarter CN’s revenues were up 16 per cent, and for the year revenues were up by 9.9 per cent to a record $14.3 billion. Operating income rose during the fourth quarter to $1.45 billion from $1.3 billion, resulting in a gross margin of 38.8 per cent. For the year, CN’s operating income rose to $5.5 billion from $5.25 billion, resulting in a gross margin of 38.4 per cent. Net income before taxes for the year rose 11.6 per cent to a record $5.7 billion. Cash flow from operations increased by 7.3 per cent to $5.9 billion. “Free” cash flow, the amount remaining from operating cash flow after subtracting net capital expenditures made during the year and dividends paid to investors, decreased from $1.6 billion to $1.25 billion. (more…)
Surging oil-by-rail brings provincially owned oil trains as a “stop-gap” – until more pipeline capacity is built
By R. Bruce Striegler
Canada’s oil industry has been facing record-low prices for its exports, a glaring lack of insufficient pipeline capacity to bring its product to market, and an uncertain long-term outlook. None of these factors, however, are stopping Alberta oil producers from increasing production, and relying more heavily than ever on rail to move the product. According to Statistics Canada, the volume of oil on Canada’s railroads has soared by 64.6 per cent in just the past year. And in the past seven years, the number of rail cars carrying oil across Canada has quadrupled. As one pipeline project after another fails to launch, the industry is relying more heavily on rail than ever to ship its oil. (more…)
By Alexander Whiteman
The main North American rail freight carriers are reporting record revenue growth and strong profits, even with diesel prices surging. In the nine months to September, Union Pacific (UP) revenue grew 8 per cent to $15.9 billion, with its premium intermodal business volumes growing 6 per cent year on year to three million carloads. Even with profit growth of 28 per cent to $4.4 billion as “efficiencies were implemented”, Chief Executive Lance Fritz lamented the carrier’s failure to achieve the third-quarter productivity targets it had set itself. “While we reported solid financials, we did not make the service and productivity gains we expected during the quarter,” said Mr. Fritz. “We are making progress implementing our new Unified Plan 2020 and we are well positioned to drive improvement, going forward.” (more…)