G&W Q3 net income falls despite higher revenues

Jack Hellmann, chairman, president and CEO of short-line and regional railroad operator Genesee & Wyoming, said the company is continuing to evaluate various acquisition and investment opportunities across its global footprint of railroads.    Short-line and regional railroad operator Genesee & Wyoming (G&W) posted a net income of $53.4 million for the third quarter of 2017, a 6 percent decline from last year’s third quarter, according to the company’s latest financial statements.
   However, operating revenues for the third quarter of 2017 surged 15.2 percent year-over-year to $576.9 million.
   Based out of Darien, Conn., G&W owns or leases 122 locally managed freight railroads with approximately 8,000 employees and 3,000 customers.
   Through its subsidiaries and joint ventures, G&W also provides rail service at more than 40 major ports, rail-ferry service between the U.S. Southeast and Mexico, transload services, contract coal loading, and industrial railcar switching and repair.
   During the third quarter of the year, operating revenues from G&W’s North American operations totaled $318.9 million, ticking up 2.8 percent despite headwinds from hurricanes Harvey and Irma. The railway said the segment’s revenues boost was fueled by $9.7 million from new operations.
   In addition, North American operations traffic for the quarter increased 1.4 percent year-over-year to 407,697 carloads.
   “In North America, although we continue to face weather-driven variability in our grain and coal shipments, broader economic activity is solid and we expect to benefit from a tightening trucking market,” G&W Chairman, President and CEO Jack Hellmann said.
   Meanwhile, operating revenues from G&W’s 51.1 percent owned Australian operations stood at $81.3 million for the quarter, an increase of 50.1 percent year-over-year, primarily due to new operations, along with a boost in metallic ores revenues and agricultural products revenues.
   The remaining 48.9 percent of the segment is owned by a consortium of funds and clients managed by Macquarie Infrastructure and Real Assets.
   Australian operations traffic increased from 43,532 carloads during last year’s third quarter to 123,651 carloads.
   Operating revenues from G&W’s U.K./European operations reached $176.7 million for the quarter, up 29.3 year-over-year, mainly due to new operations.
   However, U.K./European operations traffic fell 3.9 percent year-over-year to 282,780 carloads, mainly due to decreases in intermodal traffic (primarily in Continental Europe), and coal and coke traffic (primarily in the U.K.), partially offset by an increase in minerals and stone traffic (primarily in Poland).
   “In the U.K., multiple revenue and efficiency measures have taken effect and we see a good peak season for intermodal shipments in the months ahead,” Hellmann said.
   Looking ahead, Hellmann said G&W continues to evaluate various acquisition and investment opportunities across its global footprint of railroads.