Algoma to exceed expectations in strong market

(Posted on 09/11/22)

Algoma Central Corporation has reported its results for the three and nine months ended September 30, 2022. Revenues increased 14% during the 2022 third quarter to $199,327 compared to $174,734 for the same period in 2021 while net earnings increased 6% in the same period. The Company reported 2022 third quarter EBITDA(1) of $73,604 compared to $69,415 for the same period in 2021. All amounts reported below are in thousands of Canadian dollars, except for per share data and where the context dictates otherwise.

"Our strategic approach to maintain disciplined growth and a strong vessel portfolio continues to serve us well," said Gregg Ruhl, President and CEO of Algoma. "Driving our plan forward are our hard working seafarers and shoreside support teams who continue to deliver exceptional service to our customers and long-term value for our shareholders. We had another busy quarter and I am pleased to see the significant recovery of our tanker business and continued strength in our international segments, particularly in our joint ventures. As we are well into the fourth quarter, I am confident Algoma will deliver full-year results beyond our earlier expectations as we expect steady market demand and strong operating performance across all business units to continue through to the end of the year," concluded Mr. Ruhl.

Financial Highlights: Third Quarter 2022 Compared to 2021

• Net earnings increased 6% to $42,533 compared to $39,984 last year. Basic earnings per share were $1.13 compared to $1.06.
• Global Short Sea Shipping segment equity earnings increased 60% to $12,103 compared to $7,541 for the prior year driven by increased earnings in the cement and handy-size fleets as well as significant freight rate increases in the mini-bulker fleet that nearly offset the reduced revenue from three less vessels in that fleet. Earnings for the quarter include a $2,922 gain on the sale of two vessels in 2022 compared to a gain of $2,720 on the sale of two vessels in the same quarter in 2021.
• Revenue for Product Tankers increased 55% to $32,749 compared to $21,186. This was mainly driven by higher fuel cost recoveries and improved customer demand. The increase was also attributable to the addition of one vessel to the fleet during the second quarter that operates internationally under bareboat charter. Despite higher operating costs, operating earnings increased 48% to $5,888 compared to $3,969 driven by a 32% increase in revenue days primarily due to the increased demand.
• Ocean Self-Unloader segment revenue increased 21% to $49,927 compared to $41,221 driven by higher freight rates, fuel cost recoveries and a 10% increase in Pool volumes. Operating earnings decreased 24% to $7,856 compared to $10,366 in 2021 due to higher operating costs and increased dry-dock expenditures.
• Domestic Dry-Bulk segment revenue increased 6% to $115,996 compared to $109,591, reflecting increased fuel recoveries and improved overall base freight rates. Despite lower revenue days during the 2022 third quarter, overall volumes were slightly higher offsetting the impact of lower vessel utilization on two vessels. Operating earnings decreased 7% to $30,453 compared to $32,795 driven primarily by higher layup and repair spending to activate idled vessels in preparation for the fall grain harvest in Canada.

2022 Business Outlook(2)

Domestic dry-bulk cargo volumes are expected to be strong across all commodities, driving full fleet utilization for the balance of the year. The Western Canada grain crop size has returned to trend line level which, combined with continued demand for Eastern export capacity due to the Ukraine conflict, has allowed any open capacity to be filled at prices reflecting the strong market conditions. Product Tanker demand is expected to remain steady and we expect the fleet will continue to be well utilized in the fourth quarter.

Customer demand and vessel supply for the Ocean segment is fairly well balanced for the remainder of the year. Aggregate volumes are expected to be impacted by a facility closure in Mexico and the US residential market is expected to slow down but overall construction sector demand remains strong as infrastructure investments are picking up. We are expecting costs to continue to be impacted by inflation and global fuel prices will likely remain higher than normal.

Latest News

Posidonia 2026 takes centre stage amid global freedom of navigation challenges

From insurance and risk management to energy transition, digitalisation and maritime security, the Posidonia... Read more

First maritime compliance & prevention-focused organisation, PaS, joins DBCE

Prevention at Sea (PaS), a leading maritime compliance, auditing, and digital solutions provider, has... Read more

NorthStandard reports strong results and strategic momentum

NorthStandard has reported strong financial results, continued strategic progress and enhanced support... Read more

Latest guidance for vessel transit through Strait of Hormuz

Hundreds of vessels remain unable to transit the Strait of Hormuz and, in the event of a return to more... Read more

The Bahamas regains QUALSHIP 21 eligibility

The Bahamas has regained eligibility for the United States Coast Guard’s QUALSHIP 21 programme... Read more

First dedicated STS standard for dry bulk released by INTERCARGO

Ship to ship (STS) transfers are an established part of dry bulk operations, and they are growing. As... Read more

Columbia reinforces commitment to maritime talent

Columbia Group has strengthened its commitment to developing the next generation of maritime professionals... Read more

Jamaica marks 50 years at IMO with call for island states to shape future

The Maritime Authority of Jamaica has marked Jamaica’s 50th anniversary as a member of the International... Read more

Costamare Bulkers logs first profit after Cargill deal removes most legacy trading

Costamare Bulkers Holdings Limited has reported unaudited financial results for the first quarter ended... Read more

NORDEN strengthens fleet with the addition of four Handysize vessels

NORDEN have announced that they have expanded their fleet with the purchase of four dry cargo Handysize... Read more