Algoma’s stronger quarter signals promising close to the year
(Posted on 04/11/24)
Algoma Central Corporation has reported its results for the three and nine months ended September 30, 2024. Algoma reported third quarter revenues of $204,644, compared to revenues of $205,888 in 2023. Net earnings for the 2024 third quarter were $39,914 compared to net earnings of $35,745 for the same period in 2023. All amounts reported below are in thousands of Canadian dollars, except for per share data and where the context dictates otherwise.
"Following a challenging second quarter, it's encouraging to see stability in demand this quarter, along with promising signs of continued improvement as we approach year-end," said Gregg Ruhl, President and CEO of Algoma Central Corporation. "Our Product Tanker segment is performing well, with the fleet at full utilization, including one vessel added to the domestic fleet this year. Our Ocean Self-Unloader segment has also seen stronger earnings, driven by increased on-hire days in the Pool and stable rates. In the Domestic Dry-Bulk segment, securing additional iron ore cargoes with a new customer helped offset the continuation of lower construction and salt volumes. Looking ahead to the end of 2024, customer demand remains stable although some weak spots persist. With a larger grain crop this year, grain volumes in the fourth quarter are expected to be very strong. As we move into the winter months, we remain optimistic that salt cargo demand will improve from our key customer in this sector," continued Mr. Ruhl.
Financial highlights include
- Ocean Self-Unloaders segment revenue increased 8% to $45,803 compared to $42,469, as revenue days increased 10% as a result of having one vessel on dry-dock during the third quarter compared to two in 2023 and improved Pool performance. Operating earnings increased to $11,558 from $4,773 in 2023, driven by a 9% increase in operating days.
- Revenue for Product Tankers increased 13% to $38,706 compared to $34,134 in 2023, mainly driven by higher rates on new vessels and a 12% increase in revenue days. The segment had operating earnings of $3,198 compared to earnings of $1,759 in 2023, reflecting fewer dry-dockings and an additional vessel operating within the domestic fleet compared to the prior year period.
- Domestic Dry-Bulk segment revenue decreased 7% to $119,522 compared to $128,449 in 2023, as lower volumes drove a 12% decrease in revenue days. Operating earnings decreased 7% to $32,879 compared to $35,341 in 2023 primarily as a result of the decreased demand.
- Global Short Sea Shipping segment equity earnings decreased 26% to $5,961 compared to $8,071 for the prior year period. Lower earnings were mainly attributable to lower rates in the mini-bulker fleet as well as higher operating costs and depreciation in the cement carrier fleet resulting from the larger fleet size this year.
- In the Domestic Dry-Bulk segment, a large grain crop is expected to lead to improved utilization for the balance of the year, with spot business expected to fill any available domestic dry-bulk capacity for the balance of the current navigation season. Looking ahead to the first quarter of 2025, typical winter cargo volumes are expected for both salt and iron ore, assuming a return to normal winter conditions around the Great Lakes region.
Algoma Central Corporation is a global provider of marine transportation that owns and operates dry and liquid bulk carriers, serving markets throughout the Great Lakes - St. Lawrence Seaway and internationally. Algoma is aiming to reach a carbon emissions reduction target of 40% by 2030 and net zero by 2050 across all business units with fuel efficient vessels, innovative technology, and alternate fuels.
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