Higher domestic volumes for Algoma in challenging times

(Posted on 06/11/20)

Algoma Central Corporation, a leading provider of marine transportation services, has announced its results for the three and nine months ended September 30, 2020.

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, cement 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.

EBITDA, which includes our share of joint venture EBITDA, for the three months ended September 30, 2020 was $65,797 an increase of 13% or $7,349, compared to the same period in 2019. "The Algoma team has been working hard to offset the impact the COVID-19 pandemic has had on the industries we serve and we are seeing this hard work come to fruition in our results," said Gregg Ruhl, President and CEO of Algoma Central Corporation. "We are committed to providing the best and most efficient service and we have the right team here to get the job done," continued Mr. Ruhl. "As we approach the end of the year, we know we still have some challenges ahead as market recovery in Canada and around the world is still uncertain. What we are certain of is that the marine industry is a huge player in this recovery and we will continue to do our part in keeping supply chains moving. I am looking forward to the arrival of the Algoma Intrepid in the Great Lakes and we are ready for her to join our operating fleet in November."

All amounts below are in thousands of Canadian dollars.

Third quarter ended September, 2020 highlights include:

Excluding the impact of fuel recovery and outside charter pass-through items, revenues in Domestic Dry-Bulk and Product Tankers were higher in the third quarter this year while Ocean Self-Unloader revenues were down as a result of COVID-19-related weakness in demand. Revenues were $155,002 compared to $167,901 for the 2019 quarter.
Strong freight rates and slightly higher volumes drove operating earnings for Domestic Dry-Bulk up 20% to $27,444 compared to $22,839 in 2019.
Operating earnings for Product Tankers were $8,689, up 30% compared to $6,677 in 2019, primarily driven by a slight increase in revenue days and stronger rates.
Operating earnings in Ocean Self-Unloaders were $6,319, up 23% compared to $5,124 for 2019. The increase was a result of higher revenue days, partially offset by the impact of reduced Pool volumes resulting from COVID-19.
Net earnings were $22,235 ($0.59 per share) compared to $21,049 ($0.55 per share) for 2019, as higher operating earnings offset an impairment provision recorded on a vessel owned by a joint venture.

Immediately prior to the quarter end, we took delivery of the Algoma Intrepid, the second Equinox Class 650' self-unloading dry-bulk carrier. This vessel, the ninth Equinox Class vessel to join the fleet, is expected to begin trading on the Great Lakes in November.

A five year pilot program to extend the Seaway navigation season has been approved and the 2020 navigation season will remain open into the beginning of January. We expect the Domestic Dry-Bulk fleet to be in full utilization for the remainder of the year and into 2021 with increased demand for grain and salt leading into the winter months to take advantage of these extra operating days. Volumes in the construction and iron and steel industries continue to improve but will remain below normal for the balance of the year. Offsetting this, Algoma Intrepid has begun her journey home and will commence operations in November, bringing the fleet size to 20 compared to 19 last year.