Algoma Central Corporation
Announces Operating Results for the 2017 Second Quarter

ST. CATHARINES, Ontario--()--Algoma Central Corporation (“Algoma”) – www.algonet.com, a leading provider of marine transportation services, today announced its results for the quarter ended June 30, 2017.

Second quarter highlights include (all amounts in C$000s, except for per share data and unless otherwise noted):

  • A 21% increase in net earnings from continuing operation with earnings of $15,382 ($0.40 per share) compared to $12,736 ($0.33 per share) for the same period in 2016.
  • Revenue for Domestic Dry-Bulk was up 26% and the segment net earnings increased 102% on strong volumes in the major commodity markets we serve.
  • Revenues for Product Tankers were up 41% on strong customer volumes. Unfortuantely this did not translate into increased earnings as fleet availability was impacted by a vessel out-of-service issue.
  • Although Pool earnings increased 9% for the quarter, earnings for Ocean Self-Unloaders were down 52% reflecting the timing of dry-dockings and the sale of one of two Marbulk-owned vessels during the second quarter of 2016, which resulted in a gain in the 2016 second quarter.
  • The Company initiated a head count reduction in administrative support staff at its head office. These initiatives, which include early retirements and other terminations, will result in a 13% reduction in head office staff once completed later this year.
  • Sold three properties and our 50% interest in a fourth property for net proceeds of $33,900 and recorded a net gain of $13,920 on the transactions.
  • Eliminated refinancing risk and reduced overall borrowing costs by completing the issuance of $82,500 in 5.25% convertible debentures due June 30, 2024. The majority of the proceeds were used to redeem existing convertible debentures after the second quarter.

“We experienced continued strong volumes and performance in our Domestic Dry-Bulk business in the second quarter, building on the solid markets we saw developing earlier in the year” said Ken Bloch Soerensen, CEO of Algoma. We also saw very strong customer demand in Product Tankers; however, an unfortunate vessel breakdown prevented us from taking advantage of it. This vessel has since returned to service and we have taken other steps to meet this demand,” Mr. Soerensen continued.

Earnings from the discontinued real estate business were $13,782 compared to $525 last year, reflecting gains on properties sold during the quarter. In June, the Company suspended efforts to sell its Station Mall property as a result of uncertainty created by the restructuring of Sears Canada.

Results from operations for the second quarter were as follows:

  Three Months   Six Months
Ended June 30 Ended June 30
    2017       2016     2017       2016  
Revenues
 
Domestic Dry-Bulk $ 80,979 $ 64,112 $ 99,380 $ 75,771
Product Tankers 22,649 16,041 34,330 24,556
Ocean Self-Unloaders 17,515 16,049 36,172 36,352
Investment Properties   2,775     2,835     5,863     5,921  
  $ 123,918   $ 99,037   $ 175,745   $ 142,600  
 
Three Months Six Months
Ended June 30 Ended June 30
    2017     2016     2017     2016  
Operating earnings (loss) net of income tax
 
Domestic Dry-Bulk $ 12,761 $ 7,984 $ (2,247 ) $ (19,731 )
Unrealized gain of foreign currency exchange contracts 3,397 - 2,394 -
Gain on cancellation of shipbuilding contracts   -     -     -     16,196  
16,158 7,984 147 (3,535 )
 
Product Tankers 667 1,636 (1,764 ) 128
Ocean Self-Unloaders 1,824 3,762 3,547 11,030
Global Short Sea Shipping 391 902 1,057 1,392
Corporate   (3,179 )   (2,131 )   (5,818 )   (5,297 )
 
Segment earnings (loss) 15,861 12,153 (2,831 ) 3,718
 
Not specifically identifiable to segments:
Investment properties (2,436 ) 915 (1,489 ) 1,645
Gain on foreign exchange 2,537 2,468 1,244 2,443
Interest expense (1,010 ) (3,023 ) (2,177 ) (5,959 )
Interest income 274 434 551 921
Income tax (expense) recovery   156     (211 )   654     2,623  
 
Net earnings (loss) from continuing operations 15,382 12,736 (4,048 ) 5,391
Net earnings from discontinued operations   13,782     525     14,107     1,175  
 
Net earnings $ 29,164   $ 13,261   $ 10,059   $ 6,566  
 
Basic and Diluted Earnings (Loss) per Share
Continuing operations $ 0.40 $ 0.33 $ (0.10 ) $ 0.14
Discontinued operations   0.35     0.01     0.36     0.03  
 
  $ 0.75   $ 0.34   $ 0.26   $ 0.17  

Cash Dividends

The Board of Directors has declared a cash dividend of $0.08 per common share to be paid on September 1, 2017 to shareholders of record on August 18, 2017.

About Algoma Central

Algoma Central Corporation operates the largest Canadian flag fleet of dry and liquid bulk carriers 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 vessels operating in international markets. Algoma provides ship management services for other ship owners. The Company is expanding into global dry-bulk markets with investments in businesses specializing in pneumatic cement carrying vessels and in short-sea dry-bulk shipping.

Contacts

Algoma Central Corporation
Ken Bloch Soerensen
President and CEO
+1 905-687-7885
or
Peter D. Winkley, CPA, CA
Chief Financial Officer
+1 905-687-7897

Contacts

Algoma Central Corporation
Ken Bloch Soerensen
President and CEO
+1 905-687-7885
or
Peter D. Winkley, CPA, CA
Chief Financial Officer
+1 905-687-7897