Home Page
10:05:00 EST Sat 20 Dec 2014
Enter Symbol
or Name
USA
CA



Algoma Central Corp
Symbol C : ALC
Shares Issued 38,912,110
Close 2013-05-02 C$ 14.03
Recent Sedar Documents

Algoma loses $28.63-million in Q1 2013

2013-05-03 10:28 ET - News Release

Mr. Greg Wight reports

ALGOMA CENTRAL CORPORATION - OPERATING RESULTS

The nature of Algoma Central Corp.'s business is such that the earnings in the first quarter of each year are not indicative of the results for the other three quarters in a year. Due to the closing of the canal system and the winter weather conditions in the Great Lakes-St. Lawrence waterway, the majority of the domestic dry bulk fleet does not operate for much of the first quarter. In addition, significant repair and maintenance costs are incurred in the first quarter to prepare the domestic dry bulk fleet for the upcoming navigation season. As a result, the first-quarter revenues and earnings are significantly lower than the remaining quarters in the year.

                      FINANCIAL HIGHLIGHTS
         (in thousand of dollars except per-share data)

                           For the three months ended March 31,
                                               2013       2012  
                                                          
Revenue                                    $ 50,757 $   56,951
Net (loss)                                 $ 28,635 $   31,959
Basic and diluted (loss) per common share  $   0.74 $     0.82
Dividends paid per common share            $   0.07 $     0.05

First-quarter results (in thousands of dollars except per-share data)

The corporation is reporting a net loss for the three months ended March 31, 2013, of $28,635 compared with $31,959 for the same period in 2012.

The reduction in the net loss for the quarter reflects a reduced loss in the domestic dry bulk segment and improved earnings from the product tanker segment, partially offset with lower earnings from the ocean shipping and real estate segments. In addition, the corporation experienced a gain in the 2013 quarter on certain currency contracts related to the corporation's EquinoxClass vessel construction contracts compared with a loss for the same period in 2012. The mark-to-market gain or loss is dictated by the change in the value of the Canadian dollar compared with U.S. dollar. In the first quarter of 2013, the Canadian dollar weakened by 2011 basis points resulting in a gain and for the first quarter in 2012, the Canadian dollar strengthened by 236 basis points resulting in a loss.

The domestic dry bulk segment operating loss net of income tax decreased from $34,929 in 2012 to $31,855 in 2013. The decrease was due primarily to lower repair costs, depreciation and insurance expense. Partially offsetting these improvements was a reduction in revenue due to fewer operating days in the 2013 first quarter compared with the prior year as a result of a return to more normal winter conditions and a slower start to the regular shipping season.

The product tanker segment operating earnings net of income tax increased from $443 to $1,442. The main factors contributing to the increase in earnings were additional operating days for the domestic tankers due to increased customer demand and fewer days spent in regulatory dry docking combined with a decrease in repair costs.

The operating earnings net of income tax for the ocean shipping segment for the three months ended March 31, 2013, were $3,505 compared with $4,504 for the same period in 2012. The decrease was due primarily to a reduction in earnings capacity due to the sale of the Ambassador in late 2012 and poor operating conditions during the month of February, 2013.

The real estate segment operating earnings net of income tax decreased from $863 for the three months ended March 31, 2012, to $417 for the 2013 period. The decrease was due primarily to lower earnings from the hotel operations in Sault Ste. Marie.

An additional factor affecting the comparability of the 2013 three-month results to 2012 was a decrease in the gain on the translation of foreign-currency-denominated assets and liabilities due to the drop of the value of the Canadian dollar compared with the U.S. dollar.

The corporation announced on April 30, 2013, that the London, U.K., arbitration tribunal hearing a shipbuilding contract dispute involving the corporation has found in favour of Algoma. In 2007, the corporation entered into contracts to build three 16,500-deadweight-ton product tankers in China. Each contract contained provisions that permitted cancellation under certain conditions. These conditions were met in 2010, and the corporation accordingly issued notices of rescission to the shipyard seeking to cancel the contracts and demanding reimbursement of the U.S. $35,370 instalments that had been advanced. The matter was taken to arbitration by the shipyard, and hearings were conducted before the tribunal in London in September, 2012.

Cash dividends

The board of directors has authorized payment of a quarterly cash dividend to shareholders of seven cents per common share. The cash dividend is payable on June 3, 2013, to shareholders of record on May 20, 2013.

Annual general meeting of shareholders

Algoma will webcast the annual general meeting of shareholders on Friday, May 3, 2013, at 11:30 a.m. EST.

We seek Safe Harbor.

© 2014 Canjex Publishing Ltd. All rights reserved.