By Theo van de kletersteeg
Ridley Island, B.C.-based Ridley Terminals Inc. (RTI), a federal Crown Corporation operating a marine terminal exporting metallurgical and thermal coal, as well as petroleum coke, reported that, as a result of global oversupplies, shiploading volumes during the first quarter of 2015 dropped by 43 per cent compared to Q1 of the previous year, to 1.16 million tonnes. As a result of decreased volumes, an operating loss of $3.0 million was incurred during the quarter, compared with a profit of $4.8 million during the previous year’s quarter. Coal volumes accounted for 85 per cent of total terminal shipments in the first quarter, with petroleum coke covering the balance at 15 per cent. Revenues in the first quarter of 2015 reached $11 million, a drop of $8.1 million over the same period in 2014.
RTI has been for sale since December of 2012 when, in retrospect, it was close to reaching record volumes and profitability. However, a sale did not materialize, and still has not materialized. Meanwhile, the process has been hindered by aboriginal title claims, and significant global reductions in demand for both metallurgical and thermal coal.
As if these two impediments are not enough, minimum annual lease obligations to Prince Rupert Port Authority (PRPA) will weigh heavily on RTI. Under the lease agreement with PRPA, RTI has minimum annual rent obligatons of $12.1 million for 2015, which will rise to $13 million in 2016, and will further escalate until they reach $16.5 million by 2021.
While the management does not expect an early recovery of global coal markets, it considers the company well positioned to capture future growth as it is one of only a few Pacific west coast terminals providing terminal bulk services for the export coal market.