For the Three Months Ended March 31, 2013 and 2012 (restated)
(In thousand of dollars except per share data)
ALC-T
TORONTO, May 3, 2013 /CNW/ - The nature of the Corporation'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.
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| 2013 | | 2012 |
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Revenue
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$
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50,757
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$
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56,951
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Net loss
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$
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28,635
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$
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31,959
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Basic and diluted loss per common share
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$
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0.74
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$
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0.82
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Dividends paid per common share
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$
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0.07
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$
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0.05
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First Quarter Results
The Corporation is reporting a net loss for the three months ended March
31, 2013 of $28,635 compared to $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 to 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 to 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 to 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 to
$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 to the U.S. dollar.
The Corporation announced on April 30, 2013 that the London, UK
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 $0.07 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 at http://www.newswire.ca/en/webcast/detail/1144311/1249121
About Algoma Central Corporation
Algoma Central Corporation owns and operates the largest Canadian flag
fleet of dry and liquid bulk carriers operating on the Great Lakes -
St. Lawrence Waterway, including 19 self-unloading dry-bulk carriers,
seven gearless dry bulk carriers and seven product tankers. Algoma also
has interests in ocean dry-bulk and product tanker vessels operating in
international markets. Algoma owns a diversified ship repair and steel
fabricating facility active in the Great Lakes and St. Lawrence regions
of Canada. In addition, Algoma owns and manages commercial real estate
properties in Sault Ste. Marie, St. Catharines and Waterloo, Ontario.
A recently published economic impact study, commissioned by Marine
Delivers, demonstrates the significant role that the Great Lakes - St.
Lawrence Waterway plays in supporting the Canadian and U.S. economies.
Some 227,000 jobs and $35 billion in economic activity are supported by
the movement of goods within the Great Lakes / Seaway waterway. For
more information, including access to the full text of the economic
impact study, please consult the www.marinedelivers.com website.
Cautionary Statements
This press release may include forward-looking information within the
meaning of applicable securities laws including information concerning
the business and future results of Algoma. Forward-looking statements
in this press release include statements about the purchase of vessels
by Algoma. Readers are cautioned to not place undue reliance on
forward-looking information. Actual results and developments may differ
materially from those contemplated by this information. The statements
in this press release are made as of the date of this release and are
based on current expectations. Algoma undertakes no obligation to
update forward-looking information, other than as required by law, or
to comment on analyses, expectations or statements made by
third-parties in respect of Algoma, its financial or operating results
or its securities. Algoma cautions that all forward-looking information
is inherently uncertain and actual results may differ materially from
the assumptions, estimates or expectations reflected or contained in
the forward-looking information, and that actual future results could
be affected by a number of factors, many of which are beyond Algoma's
control, including economic circumstances, technological changes,
weather conditions and the material risks and uncertainties identified
by Algoma and discussed on pages 13 to 17 of Algoma's Annual
Information Form for the year ended December 31, 2012, which is
available on SEDAR at www.sedar.com.
SOURCE: Algoma Central Corporation
<p> Greg D. Wight, FCA<br/> President and Chief Executive Officer<br/> 905-687-7850 </p> <p> Peter D. Winkley, CA<br/> Vice President, Finance and Chief Financial Officer<br/> 905-687-7897 </p>