ST. CATHARINES, Ontario–(BUSINESS WIRE)–Algoma Central Corporation (“Algoma” or “the Company”) (TSX: ALC), a
leading provider of marine transportation services, today announced its
results for the three months ended March 31, 2019.
All amounts reported below are in thousands of Canadian dollars, except
for per share data and unless otherwise noted. First quarter 2019
highlights include:
-
Consolidated revenue for the 2019 first quarter increased 19% compared
to the same period in 2018. -
EBITDA for the 2019 first quarter was a loss of $6,914 compared to a
loss of $4,197 in the same period in 2018. The decrease in EBITDA is a
result of higher spending on winter lay-up in Domestic Dry-Bulk and on
a Tanker dry-docking. -
Domestic Dry-Bulk experienced steady business over the traditionally
quiet winter season; however, there was an increase in operating
expenses as four vessels, on which we are conducting significant
dry-dockings, had increased lay-up costs. -
Customer demand in the Product Tanker segment continues to be strong
and one additional Algoma vessel, the Algonorth, operated during the
quarter compared to last year. -
Customer demand remained steady in the Ocean Self-Unloader segment and
the fleet was in full utilization. -
Subsequent to the quarter, the Algoma Conveyor, the eighth Equinox
Class vessel to join Algoma’s Domestic Dry-Bulk fleet, arrived in
Canada and began operations on April 18, 2019 and the purchase of the
Algoterra was finalized and the vessel began operations on April 20,
2019. -
Our Global Short Sea Shipping joint venture generated a loss of $473
compared to income of $1,881 in the first quarter of 2018. The loss
was a result of higher than normal maintenance and repairs on certain
vessels and non-productive time resulting from certain vessels being
re-deployed to new customers.
Net loss and basic loss per share in the 2019 first quarter were $22,800
and $0.59, respectively, compared to $9,142 and $0.23, respectively, for
the same period in 2018. The higher loss was mainly a result of a
foreign exchange loss in 2019 due to the strengthening of the Canadian
dollar at the time the refund guarantees were received and higher lay-up
and dry-docking expenses.
“I am pleased to say that our three core businesses experienced steady
customer demand during the first quarter of 2019,” said Gregg Ruhl,
President and CEO of the Company. “Improving operational efficiency was
our focus over the winter months and the team here at Algoma worked hard
preparing our fleet for the opening of the season. I am disappointed our
Global Short Sea venture is not performing up to our expectations, but
we are confident returns from this segment will improve and grow over
the coming years” added Mr. Ruhl.
Subsequent to the 2019 first quarter, the Company has exercised an
option to build a new Equinox Class seawaymax gearless bulker at the
Jangzijiang Shipyard in China for US$38 million. The vessel is expected
to arrive in Canada for the 2021 navigation season.
Full first quarter 2019 results can be found on the Company’s website at www.algonet.com/investor-relations
and on SEDAR at www.sedar.com.
Normal Course Issuer Bid
On March 15, 2019, Algoma received acceptance from the TSX to renew the
normal course issuer bid (the “NCIB”) for the period of March 19, 2019
through March 18, 2020. Under the renewed NCIB, the Company may purchase
up to 1,000 common shares per day, representing 25% of the average daily
trading volume during the six months ending March 7, 2019, to a maximum
of 1,920,735 common shares (approximately 5% of the 38,414,715 common
shares issued and outstanding).
In conjunction with the renewal of the NCIB, the Company entered into an
automatic share purchase plan on March 18, 2019 with a designated broker
to allow for the purchase of its common shares under the NCIB at times
Algoma normally would not be active in the market due to applicable
regulatory restrictions or internal trading black-out periods.
Cash Dividends
The Company’s Board of Directors have authorized payment of a special
dividend of $0.75 per common share in addition to payment of the regular
quarterly dividend of $0.10 per common share. The dividends are payable
on June 3, 2019 to shareholders of record May 17, 2019.
Use of Non-GAAP Measures
There are measures included in this press release that do not have a
standardized meaning under generally accepted accounting principles
(GAAP). The Company includes these measures because it believes certain
investors use these measures as a means of assessing financial
performance. EBITDA is a non-GAAP measure that does not have any
standardized meaning prescribed by IFRS and may not be comparable to
similar measures presented by other companies. Please refer to the
Management’s Discussions and Analysis for the three months ended
March 31, 2019 for further information regarding non-GAAP measures.
About Algoma Central
Algoma owns and operates the largest fleet of dry and liquid bulk
carriers operating on the Great Lakes – St. Lawrence Waterway, including
self-unloading dry-bulk carriers, gearless dry-bulk carriers and product
tankers. Algoma also owns ocean self-unloading dry-bulk vessels
operating in international markets and a 50% interest in NovaAlgoma,
which owns and operates a diversified portfolio of dry-bulk fleets
serving customers internationally.
Contacts
Gregg A. Ruhl
President and CEO
+1 905-687-7890
Peter D. Winkley
Chief Financial Officer
+1 905-687-7897
Or visit
www.algonet.com
or www.sedar.com
