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Algoma Central Corporation Reports Operating Results for the Year Ended December 31, 2016

(ALC.TO)

ST. CATHARINES, ON, Feb. 22, 2017 /CNW/ - Algoma Central Corporation ("Algoma" – www.algonet.com), a leading provider of marine transportation services, today announced its results for the year ended December 31, 2016.

Fiscal 2016 highlights include:

  • Net earnings of $33.3 million and earnings per share of $0.86, increases of 29% and 30% respectively compared to 2015.
  • Earnings before interest, taxes, depreciation and amortization (EBITDA[1]) increased by $9.8 million to $89.3 million.
  • Collected all deposits together with accrued interest on cancelled shipbuilding contracts.
  • Acquired 2.5 ocean self-unloaders, doubling our interest in our international commercial pool.
  • Sold five buildings from our discontinued real estate business for total proceeds of $51.3 million.
  • Established NovaAlgoma Cement Carriers with our partner Nova Marine Carriers, marking our entry into short-sea shipping globally.
  • On December 29, 2016, the Algoma Innovator, the first of our new 650' self-unloaders was launched by 3Maj Shipyard in Croatia. Subsequent to the year-end, on February 16, 2017, the Algoma Niagara, our first new 740' self-unloader was launched at YZJ Shipyard in China.

"We are proud of the achievements of our employees in 2016," said Ken Bloch Soerensen, President and CEO of Algoma. Mr. Soerensen continued, "Their efforts enabled the Company to deliver profitable results under difficult market conditions and advance our strategic priority of growing business in global short-sea shipping."

Net earnings from continuing operations, which excludes income from our discontinued real estate business, was $7,374 compared to $21,069 for 2015. Earnings for both years are affected by certain specific transactions and events, as follows:

  • Earnings for both years include gains related to the cancellation of shipbuilding contracts and the refund of progress payments made on those contracts. Fiscal 2016 results include a gain of $26,387 and fiscal 2015 includes a gain of $13,567.
  • Earnings for fiscal 2016 reflect a loss of $7,536 resulting from marking to market certain forward foreign exchange contracts that became ineffective as hedges for accounting purposes during the fourth quarter.
  • Earnings for fiscal 2016 are net of provisions totalling $42,661 related to impairment of the carrying value of our Domestic Dry-Bulk and Product Tanker fleets (2015 - $937) and $5,033 (2015 - $2,686) related to the accelerated depreciation on certain vessels scheduled for retirement.

_____________________________
1 EBITDA is a non-GAAP measure. Please refer to our 2016 management discussion and analysis for more information.

Net earnings from continuing operations excluding the specific transactions mentioned above for 2016 were $26,645 compared to $13,071 for 2015. Please see our 2016 management discussion and analysis for further details.

Results from continuing operations for the fourth quarter and for fiscal 2016 were as follows:


 Three Months 


 Twelve Months 


 Ended December 31 


 Ended December 31 


2016

2015


2016

2015







Revenues 












Domestic Dry-Bulk 

$

86,550

$

92,081


$

244,221

$

299,553

Product Tankers 

19,609

16,426


63,004

75,335

Ocean Shipping 

21,233

10,663


72,179

38,605


$

127,392

$

119,170


$

379,404

$

413,493







Net Earnings from Continuing Operations 












Operating earnings net of income tax 












Domestic Dry-Bulk 

$

16,465

$

9,044


$

9,407

$

3,396

Impairment expense 

(27,519)

(689)


(27,519)

(689)

Unrealized loss of foreign currency exchange contracts 

(5,539)

-


(5,539)

-

Gain (loss) on shipbuilding contracts 

-

(95)


22,322

9,972


(16,593)

8,260


(1,329)

12,679







Product Tankers 

3,076

2,120


8,207

11,910

Impairment expense 

(3,837)

-


(3,837)

-


(761)

2,120


4,370

11,910

Ocean Shipping 

5,692

2,849


18,971

12,945

Global Short Sea Shipping 

416

-


2,542

-

Corporate 

(3,847)

(2,343)


(11,820)

(10,059)







Segment (loss) earnings 

(15,093)

10,886


12,734

27,475







Not specifically identifiable to segments 






Net (loss) gain on foreign currency translation 

(19)

558


3,505

3,789

Interest expense 

(1,738)

(3,765)


(9,824)

(13,280)

Interest income 

273

324


1,142

1,270

Income tax (expense) recovery 

(3,640)

970


(183)

1,815







Net (loss) earnings from continuing operations 

$

(20,217)

$

8,973


$

7,374

$

21,069







Basic (loss) earnings per common share 

$

(0.52)

$

0.23


$

0.19

$

0.54

 

Consolidated revenues for 2016 were $379,404 compared to the $413,493 reported for fiscal 2015. An increase in revenue in the Ocean Dry-Bulk segment resulting from an approximate doubling of our interest in the international commercial pool was more than offset by volume related decreases in Domestic Dry-Bulk and Product Tankers. Revenue of the Global Short-Sea Shipping segment, in which we participate via a joint venture, is not included in the consolidated revenue figure. Our Global Short-Sea Shipping venture generated revenues of $17,983. We have a 50% interest in this venture. 

Cash Dividends

The Board of Directors has declared a dividend of $0.07 per common share to shareholders. This cash dividend will be paid on March 1, 2017 to shareholders of record on February 15, 2017.

In addition, the Board of Directors has approved an increase in the quarterly dividend to $0.08 per share beginning with the June 1st, 2017 dividend.

About Algoma Central Corporation

Algoma Central Corporation operates the largest Canadian flag fleet of dry and liquid bulk carriers on the Great Lakes - St. Lawrence Waterway, including self-unloading dry-bulk carriers, gearless dry bulk carriers and product tankers. The Company has announced contracts for seven new Equinox Class domestic dry-bulk vessels as part of its on-going fleet renewal program. Algoma also owns ocean dry-bulk vessels operating in international markets. Algoma provides ship management services for other ship owners. In 2016, Algoma announced a strategic initiative to grow into attractive global niche markets, beginning with a fifty percent interest in a pneumatic cement carrier business.