Diverse Algoma fleet contributes to revenue growth
(Posted on 29/02/24)
Algoma Central Corporation has reported its results for the year ended December 31, 2023. Algoma reported revenues of $721,220, a 6% increase compared to the same period in 2022. Net earnings for 2023 were $82,870 compared to $119,966 for the same period in 2022. Prior year results included a $9,977 gain from the sale of Station Mall and a $10,848 impairment reversal. The Company, based in Canada, reported 2023 EBITDA of $187,115 compared to $204,961 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.
"Despite rate pressures in some markets and a high dry-docking year, our solid 2023 financial results underscores our resilience and adaptability," said Gregg Ruhl, President and CEO of Algoma. "As we look forward into 2024, we remain agile and committed to navigating economic uncertainty and changing markets with a strong and dependable fleet of vessels and strategic foresight. The Fure Vanguard, the first of 10 newbuild tankers under construction for our FureBear joint venture, was delivered in February and will load her first cargo in March, while the Algoma Bear, our newest Equinox Class self-unloader, is set to arrive this spring. As we eagerly await their arrivals, our teams are diligently preparing our domestic fleets for the upcoming 2024 navigation season," concluded Mr. Ruhl.
Net earnings decreased 31% to $82,870 compared to $119,966 in 2022. Basic earnings per share were $2.15 compared to $3.17 and diluted earnings per share were $2.00 compared to $2.89. Earnings in 2022 include a $9,977 gain on the sale of Station Mall within the Investment Properties segment and an impairment reversal of $10,848 within the Domestic Dry-Bulk segment. Excluding these other items, earnings decreased 16%.
Domestic Dry-Bulk segment revenue increased 13% to $408,170 compared to $360,139 in 2022, reflecting higher base freight rates and 7% higher volumes, which drove a 14% increase in revenue days. Operating earnings decreased 9% to $59,379 compared to $65,373 for the prior year, entirely due to the $14,759 impairment reversal recorded in 2022. Excluding the impairment reversal, operating earnings increased 17%.
Ocean Self-Unloaders segment revenue decreased 8% to $178,031 compared to $193,730 and operating earnings decreased 36% to $25,723 compared to $40,442 in 2022, mainly as a result of a significantly higher number of dry-dockings in 2023, resulting in 11% fewer revenue days.
Global Short Sea Shipping segment equity earnings were $21,271 compared to $31,712 for the prior year; 2023 equity earnings include a $545 gain on the sale of one vessel and 2022 equity earnings include a $7,814 gain on the sale of three vessels. Excluding these gains, earnings decreased 13%. Earnings were impacted by reduced mini-bulker and handy-size fleet earnings as a result of a softening of freight rates compared to the prior year, partially offset by increased earnings in the cement fleet.
In the Domestic Dry-Bulk segment, customer demand should be relatively strong in 2024, with all domestic dry-bulk vessels expected to be in service during the year. Opportunities for additional domestic and export iron ore, along with strong grain demand and steady construction volumes are expected to offset a potential reduction in salt volumes driven by the mild winter in the Great Lakes - St Lawrence region. The spring arrival of the Algoma Bear, the newest Equinox Class self-unloader, replacing the recently retired Algoma Transport, is expected to drive an increased rate of earnings when coupled with contractual freight rate escalation and anticipated higher earnings from new business.
In the Ocean Self-Unloader segment, volumes in 2024 are expected to remain steady and vessel utilization is expected to improve with substantially fewer scheduled dry-dockings compared to 2023.
In the Global Short Sea Shipping segment, Algoma expect consistent earnings from the cement fleet, maintaining a high level of fleet utilization. The segment is likely to face continued rate pressure due to ongoing global economic and geopolitical situations, resulting in a softening of mini-bulker and handy rates in the future. Despite the lower rates, the company does not anticipate any adverse effects on volumes and utilisation.
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