Algoma Central posts decline in earnings, revenues

The Canadian shipping company reported net earnings from continuing operations of $21.1 million for the full year of 2015 on revenues of $413.5 million, year-over-year drops of 57 percent and 12.7 percent, respectively.    Canadian shipping company Algoma Central Corporation posted net earnings from continuing operations of $9 million Canadian (U.S. $6.6 million) for the fourth quarter of 2015, a 73.8 percent decline from the corresponding period in 2014, according to the company’s most recent financial statements.
   Consolidated revenues fell 15.9 percent year-over-year in the fourth quarter of 2015 to C$119.2 million.
   Earnings and revenues from all business segments were hindered by softer market conditions that resulted in lower demand and reduced customer volumes.
   In the fourth quarter, Algoma announced its intention to divest of its real estate portfolio, consisting of over 1 million square feet of commercial real estate in Ontario, in order to focus its capital on domestic and international shipping opportunities, the company said. Therefore, the results for the periods reported on have been restated to reflect the real estate division as a discontinued operation.
   For the full year of 2015, Algoma posted net earnings from continuing operations of C$21.1 million, a 57 percent decline from 2014. The decrease was primarily fueled by the drop in revenues, which was partially offset by a gain resulting from the cancellation of shipbuilding contracts earlier in 2015.
   Revenues fell 12.7 percent year-over-year to C$413.5 million. “Fuel costs, which are largely passed on to customers through our freight rates, declined significantly during the year and approximately C$38 million of the decrease in revenue is a direct result of the pass-through effect of decreased fuel costs,” Algoma said. The decline in revenues also resulted from a decrease in rates earned due to stiff competition in Algoma’s domestic dry-bulk business and a drop in volumes carried in the company’s product tanker and ocean dry-bulk business units.
   In January 2016, Algoma announced the purchase of a 50 percent interest in an existing operator of pneumatic cement carriers. The transaction closed in January and will contribute to the company’s first quarter of 2016 earnings.
   Algoma operates 13 self-unloading dry-bulk carriers, seven gearless dry bulk carriers and six product tankers on the Great Lakes and St. Lawrence Seaway. In addition, the company has contracts for seven new Equinox Class domestic dry-bulk vessels, owns four ocean dry-bulk vessels that operate in international markets and has a 50 percent interest in three other ocean dry-bulk vessels.