Algoma Central Corporation (Algoma or the Company) (TSX: ALC), a leading provider of marine transportation services, today announced its results for the year ended December 31, 2018.
All amounts reported below are in thousands of Canadian dollars, except for per share data and unless otherwise noted. Fiscal 2018 highlights include:
- Consolidated revenue for 2018 increased 12% compared to 2017. Revenue increased as a result of improved rates in the Domestic Dry-Bulk and Ocean Self-Unloaders segments and increased customer demand in the Product Tankers segment.
- EBITDA for 2018 was $128,748 an increase of 19% compared to 2017.
- The company added three new Equinox Class vessels to operations this year, the Algoma Niagara, the Algoma Sault and the Algoma Innovator. Additionally, the Algoma Buffalo and the Algoma Compass were acquired from American Steamship Company late in 2017; both vessels began operations at the start of the 2018 navigation season.
- Algoma Tankers Limited (“ATL”) purchased a 2008-built product tanker which became the seventh tanker in the ATL fleet. The vessel was re-named the Algonorth and began operations at the end of December.
- Global Short Sea Shipping segment revenues increased 24% compared to 2017. The Company has a 50% interest in three joint ventures and revenue from the Global Short Sea Shipping segment is not included in the consolidated revenue figure.
- NovaAlgoma Short Sea Carriers (NASC) and Peter D¶hle Schiffahrts-KG, announced the creation of DNA Shipping, a commercial agreement to pursue consolidation and growth within the multi-purpose project vessel (MPP) and 13,500 to 15,000 mini-grabber dry-bulk markets.
- A new joint venture, NovaAlgoma Bulk Holdings (NABH), was created. NABH has interests in four deep-sea bulkers operating internationally and is managed out of Lugano, Switzerland.
- Subsequent to year end, Algoma entered into an agreement to acquire three vessels from Oldendorff Carriers GMBH & Co. which operate in the CLSI Pool and entered into an agreement to acquire a 2010-built product tanker.
Fiscal 2018 was an exciting year at Algoma, said Gregg Ruhl, President and CEO of the Company. Despite some challenges, we achieved a number of things which will advance us towards the strategic goals we set in 2015. Our success and growth would not have been possible without the hard work and dedication of the Algoma team and our loyal customers added Mr. Ruhl.
Net earnings from continuing operations, which excludes income from discontinued real estate operations in 2017, was $50,943 ($1.32 per share) in 2018 compared to $34,972 ($0.90 per share) for 2017. Earnings in 2018 include a gain of $10,214 related to the cancellation of four shipbuilding contracts. In December of 2018 the Company received a full refund, including interest, for one of the cancelled contracts and subsequent to the year end instalments on the remaining three contracts were refunded with interest. Net earnings from continuing operations for 2018 excluding this gain were $40,729.
Normal Course Issuer Bid
During the year ended December 31, 2018, 130,700 common shares were purchased for cancellation for a total cost of $1,892. Subsequent to the 2018 year end, 6,900 common shares were purchased for cancellation as part of the normal course issuer bid at a total cost of $93. The bid expired on January 28, 2019 and the Company intends to renew its normal course issuer bid for 2019 by filing the required applications with the regulatory authorities.
Use of Non-GAAP Measures
There are measures included in this press release that do not have a standardized meaning under generally accepted accounting principles (GAAP). The Company includes these measures because it believes certain investors use these measures as a means of assessing financial performance. EBITDA is a non-GAAP measure that does not have any standardized meaning prescribed by IFRS and may not be comparable to similar measures presented by other companies. Please refer to the Managements Discussions and Analysis for the year ended December 31, 2018 for further information regarding non-GAAP measures.
About Algoma Central
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 and product tankers. Algoma also owns ocean self-unloading dry-bulk vessels operating in international markets and a 50% interest in NovaAlgoma, which includes a diversified portfolio of dry-bulk fleets operating internationally.
Gregg A. Ruhl
President and CEO
Peter D. Winkley, CPA, CA
Chief Financial Officer