Algoma growth amidst changing markets and economic challenges
(Posted on 09/08/23)
Algoma Central Corporation has reported its results for the three and six months ended June 30, 2023.
"This year we have focused on driving long-term value for our stakeholders by optimizing our diversified growth, while maintaining our operating vigilance in changing markets," said Gregg Ruhl, President and CEO of Algoma. "Historically, we know shifting market demand and economic challenges have not stopped Algoma's progress, but instead made us think differently in order to adapt and effectively move our strategic plan forward. In the second quarter, we advanced several incremental growth investments demonstrating our ability to find and execute on attractive opportunities to deploy capital,” continued Mr. Ruhl.
Algoma reported revenues during the 2023 second quarter of $202,406, a 10% increase compared to the same period in 2022. Net earnings for the 2023 second quarter were $33,144 compared to $47,045 for the same period in 2022; earnings in 2022 included a $10,563 gain from the sale of Station Mall. The Company reported 2023 second quarter EBITDA of $65,204 compared to $61,412 for the same period in 2022. All amounts reported below are in thousands of Canadian dollars, except for per share data and where the context dictates otherwise.
Second quarter highlights 2023 compared to 2022
- Domestic Dry-Bulk segment revenue increased 27% to $126,584 compared to $99,288 in 2022, reflecting 17% higher volumes, which drove a 24% increase in revenue days. Operating earnings increased 53% to $32,806 compared to $21,504 for the prior year, mainly reflecting full fleet utilization this quarter, partially offset by higher operating costs.
- Revenue for Product Tankers decreased 12% to $28,046 compared to $31,923 in 2022. This was mainly driven by higher off-hire days on two vessels which resulted in 7% fewer revenue days, and a decrease in fuel cost recovery. Segment operating earnings decreased to $1,078 compared to $3,683 in 2022, reflecting the higher off-hire days and increased operating costs.
- Ocean Self-Unloaders segment revenue decreased 6% to $47,120 compared to $50,292 as a result of higher scheduled dry-dockings driving 8% fewer revenue days, and lower fuel pass through charges. Operating earnings decreased 28% to $8,003 compared to $11,139 in 2022, mainly as a result of dry-dockings and lower daily earning rates.
- Global Short Sea Shipping segment equity earnings were $5,155 compared to $9,454 for the prior year; 2022 equity earnings include a $4,782 gain on the sale of two vessels; excluding this gain, earnings increased 10%. The higher earnings were driven by increased earnings in the cement fleet due to the larger fleet size this year and strong freight rates, partially offset by lower earnings in the mini-bulker and handy fleets as a result of a softening of freight rates and the smaller mini-bulker fleet this year.
Looking ahead to the second half of 2023, typical seasonal weakness in grain shipments and a soft market for export iron ore has led to a brief summer layup on one vessel in the Domestic Dry-Bulk segment. Full fleet utilization is expected to resume in August and continue through the balance of the year, driven by strong demand for vessel capacity. Recent weather conditions in the Canadian prairies have resulted in some uncertainty about the 2023 grain harvest; however, demand in other sectors is expected to offset any weakness in agricultural products. Customer demand in the Product Tanker segment is projected to remain steady in the second quarter, although energy markets remain volatile due to ongoing hostilities in Europe. While vessel utilization is expected to be robust, inflation is anticipated to continue to impact costs going forward.
Latest News
Shipping takes major sustainable plastic step with toolkit from MACS
(Posted on 16/07/26)The Maritime Association for Clean Seas (MACS) has published a series of practical guides to enable... Read more
Shanghai climbs to second as Singapore retains top spot
(Posted on 16/07/26)Shanghai has officially become the world’s second-most prominent shipping hub, according to the... Read more
OceanScore sees growing port adoption of PortView
(Posted on 16/07/26)OceanScore, the maritime data and sustainability company helping shipping and ports turn regulatory... Read more
INTERCARGO highlights progress and priorities in bulk carrier safety
(Posted on 07/07/26)Bulk carrier safety continues to show steady long-term improvement, but the nature of risk facing seafarers... Read more
Norden raises full-year guidance following strong performance in dry cargo
(Posted on 07/07/26)Following stronger than expected operational performance in dry cargo, reduced costs associated with... Read more
Algoma announces refinancing of long-term debt
(Posted on 03/07/26)Algoma Central Corporation, a leading provider of marine transportation services, has announced that... Read more
Global maritime under threat from Fortibleed incident, warns Cydome
(Posted on 03/07/26)Major maritime, ports and energy companies have been identified by Cydome’s threat-intelligence... Read more
Crewing specialist expands global recruitment network with Indonesian seafarers
(Posted on 30/06/26)As the global shipping industry faces mounting concerns over future crew availability, Danica Crewing... Read more
IMO pauses evacuation in Strait of Hormuz following attack
(Posted on 29/06/26)Following an attack on a vessel in the Gulf of Oman, IMO has decided to temporarily pause its evacuation... Read more
Human cost of keeping world trade moving highlighted on Day of the Seafarer
(Posted on 25/06/26)Leading health and wellness platform OneCare Group is calling on shipping leaders to recognise the immense... Read more
