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.
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.
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.