Algoma Central Corporation Reports Financial Results for Fiscal 2023
A reliable and diverse fleet contributes to revenue growth and solid financial results for 2023
"Despite rate pressures in some markets and a high dry-docking year, our solid 2023 financial results underscores our resilience and adaptability," said
Financial Highlights: Fiscal 2023 Compared to 2022
-
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 ofStation 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%. -
Revenue for Product Tankers increased 11% to
$132,166 compared to$118,686 in 2022. All domestic tankers were fully utilized during the year and additional revenue days were generated as we introduced new vessels to the fleet prior to the departure of retiring vessels. Despite the higher revenue, segment operating earnings decreased 37% to$8,229 compared to$13,109 in 2022, reflecting the increased operating costs of dry-dockings this year. -
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.
Consolidated Statement of Earnings
For the years ended |
2023 |
2022 |
|||||
Revenue |
$ |
721,220 |
|
$ |
677,942 |
|
|
Operating expenses |
|
(539,089 |
) |
|
(490,044 |
) |
|
Selling, general and administrative expenses |
|
(41,550 |
) |
|
(34,567 |
) |
|
Other operating items |
|
— |
|
|
14,395 |
|
|
Depreciation and amortization |
|
(66,049 |
) |
|
(65,429 |
) |
|
Operating earnings |
|
74,532 |
|
|
102,297 |
|
|
|
|
|
|||||
Interest expense |
|
(19,104 |
) |
|
(20,450 |
) |
|
Interest income |
|
2,855 |
|
|
1,736 |
|
|
Gain on sale of assets |
|
9,286 |
|
|
13,913 |
|
|
Foreign exchange gain |
|
3,044 |
|
|
3,892 |
|
|
|
|
70,613 |
|
|
101,388 |
|
|
|
|
|
|||||
Income tax expense |
|
(11,360 |
) |
|
(16,917 |
) |
|
Net earnings from investments in joint ventures |
|
23,617 |
|
|
35,495 |
|
|
|
|
|
|||||
Net earnings |
$ |
82,870 |
|
$ |
119,966 |
|
|
|
|
|
|||||
Basic earnings per share |
$ |
2.15 |
|
$ |
3.17 |
|
|
Diluted earnings per share |
$ |
2.00 |
|
$ |
2.89 |
|
EBITDA
The Company uses EBITDA as a measure of the cash generating capacity of its businesses. The following table provides a reconciliation of net earnings in accordance with GAAP to the non-GAAP EBITDA measure for the years ended
For the years ended |
2023 |
2022 |
|||||
Net earnings |
$ |
82,870 |
|
$ |
119,966 |
|
|
Depreciation and amortization |
|
84,584 |
|
|
85,423 |
|
|
Impairment reversal |
|
— |
|
|
(14,759 |
) |
|
Interest and tax expenses |
|
32,342 |
|
|
40,053 |
|
|
Foreign exchange gain |
|
(2,836 |
) |
|
(3,326 |
) |
|
Gain on sale of assets |
|
(9,845 |
) |
|
(21,727 |
) |
|
EBITDA (1) |
$ |
187,115 |
|
$ |
204,961 |
|
Select Financial Performance by Business Segment
For the years ended |
2023 |
2022 |
|||||
Domestic Dry-Bulk |
|
|
|||||
Revenue |
$ |
408,170 |
|
$ |
360,139 |
|
|
Operating earnings |
|
59,379 |
|
|
65,373 |
|
|
Product Tankers |
|
|
|||||
Revenue |
|
132,166 |
|
|
118,686 |
|
|
Operating earnings |
|
8,229 |
|
|
13,109 |
|
|
Ocean Self-Unloaders |
|
|
|||||
Revenue |
|
178,031 |
|
|
193,730 |
|
|
Operating earnings |
|
25,723 |
|
|
40,442 |
|
|
Corporate and Other |
|
|
|||||
Revenue |
|
2,853 |
|
|
5,387 |
|
|
Operating loss |
|
(18,799 |
) |
|
(16,627 |
) |
The MD&A for the years ended
2024 Business Outlook(2)
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
We expect customer demand in the Product Tanker segment to be steady in 2024 and for fuel distribution patterns within
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
Normal Course Issuer Bid
Effective
The Company intends to renew its normal course issuer bid upon receipt of the required approvals from regulatory authorities.
Cash Dividends
As previously announced, the Company's Board of Directors authorized payment of a quarterly dividend to shareholders of
Notes
(1) Use of Non-GAAP Measures
The Company uses several financial measures to assess its performance including earnings before interest, income taxes, depreciation, and amortization (EBITDA), free cash flow, return on equity, and adjusted performance measures. Some of these measures are not calculated in accordance with Generally Accepted Accounting Principles (GAAP), which are based on International Financial Reporting Standards (IFRS) as issued by the
(2) Forward Looking Statements
Algoma Central Corporation’s public communications often include written or oral forward-looking statements. Statements of this type are included in this document and may be included in other filings with Canadian securities regulators or in other communications. All such statements are made pursuant to the safe harbour provisions of any applicable Canadian securities legislation. Forward-looking statements may involve, but are not limited to, comments with respect to our objectives and priorities for 2024 and beyond, our strategies or future actions, our targets, expectations for our financial condition or share price and the results of or outlook for our operations or for the Canadian,
By their nature, forward-looking statements require us to make assumptions and are subject to inherent risks and uncertainties. There is significant risk that predictions, forecasts, conclusions or projections will not prove to be accurate, that our assumptions may not be correct and that actual results may differ materially from such predictions, forecasts, conclusions or projections. We caution readers of this document not to place undue reliance on our forward-looking statements as a number of factors could cause actual future results, conditions, actions or events to differ materially from the targets, expectations, estimates or intentions expressed in the forward-looking statements.
View source version on businesswire.com: https://www.businesswire.com/news/home/20240223450193/en/
President & CEO
905-687-7890
E.V.P. & Chief Financial Officer
905-687-7897
Source: