Strong results for resilient Algoma
(Posted on 26/02/21)
Algoma Central Corporation, is reporting very strong financial results for 2020, a year in which a global pandemic introduced a number of economic and operating challenges. As a marine transportation company and a provider of critical marine infrastructure, the Company is a key link in its customers' supply chains. Algoma, along with others in the industry, was deemed an essential service and the Company operated throughout the pandemic. In the face of these unprecedented operating conditions, the Company delivered a 16% increase in EBITDA, and a 92% increase in earnings per share (29% increase on an adjusted basis).
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.
"When I reflect on the year here at Algoma, the resiliency of the Algoma team always comes first to my mind,” said Gregg Ruhl, President and CEO of Algoma Central Corporation. "Our teams, both shipboard and shoreside, have had to pivot and adapt countless times this year and I couldn’t be more proud of the hard work, dedication and strength demonstrated by everyone in the Algoma family,” continued Mr. Ruhl. "We reacted to the COVID-19 pandemic early in March and we were able to respond quickly to address the needs of our customers and, as a result, we experienced very strong financial results. Although the year came with its challenges, we successfully deployed our fleet to meet new market demand and we did this all while maintaining our commitment to providing safe, efficient and reliable transportation of essential goods both domestically and around the world.”
Fiscal 2020 business highlights included a favourable mix of trades coupled with strong freight rates drove higher results in the Domestic Dry-Bulk segment. The segment experienced increased volumes in the higher margin grain and salt sectors, while volumes in the iron ore and construction materials sectors were lower than the prior year.
In the Ocean Self-Unloader segment, five dry-dockings were undertaken successfully during the year, despite facing challenges associated with the COVID-19 pandemic, and tight cost control enabled the company to partially offset the impact of weakness in volumes shipped.
The Company completed a refinancing of its senior secured credit facilities in December in advance of mid-2021 scheduled maturities, securing long-dated debt on highly favourable terms.
The Company’s Board of Directors authorized payment of a Special Dividend to shareholders of $2.65 per common share as a result of the re-financing mentioned above. The dividend was paid on January 12, 2021 to shareholders of record on December 28, 2020.
EBITDA, which includes Algoma’s share of joint venture EBITDA, for the year ended December 31, 2020 was $174,063 an increase of 16% or $23,543, compared to the prior year.
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