Algoma Central Corporation, a leading provider of marine transportation services, Friday announced its results for the three and six months ended June 30, 2021. (All amounts reported below are in thousands of Canadian dollars, except for per share data and where the context dictates otherwise.)
Second quarter 2021 business highlights include:
The Domestic Dry-Bulk segment revenues increased 23% to $96,855 compared to $78,957 in 2020, reflecting a 14% increase in volumes driven by higher cargoes in iron and steel, construction and salt sectors and higher fuel cost recoveries. Net earnings increased 81% to $25,922 compared to $14,326 in the prior year.
The Global Short Sea Shipping segment generated earnings of $9,374 compared to $2,312, an increase of $7,062 compared to 2020. Market rates continued to improve significantly in the mini bulker sector and steady cement business drove a major improvement in the results for the segment.
The Ocean Self-Unloader segment reported earnings of $3,896 in the 2021 second quarter compared to $2,843, an increase of $1,053 compared to the same period in 2020. Volumes in the segment are recovering, especially in gypsum, and fewer dry-dockings this quarter resulted in increased vessel on-hire time. Earnings for the quarter were impacted by a $5,513 one-time compensation payment made to effect retirement of two older vessels owned by our partner in the Pool.
Segment earnings for Product Tankers were $3,203 compared to $5,926 in the prior year. Customer requirements in the second quarter of 2020 favourably impacted earnings last year as the fleet was in full utilization; however, an expected decrease in customer demand in 2021 resulted in lower vessel utilization.
We are reporting gains totaling $5,455 in the 2021 second quarter related to the sale of a property that belonged to Algoma Ship Repair and a gain from an insurance settlement and post quarter-end recycling of the Algoma Spirit.
“When we look back at the second quarter of 2020, Algoma was in a very different position,” said Gregg Ruhl, President and CEO of Algoma Central Corporation. “At the beginning of the quarter last year we were right-sizing our fleet in order to better position ourselves for uncertainty about the impact the pandemic would have on the markets we serve. As we enter the third quarter of 2021, although we are still faced with some uncertainties, we are experiencing market recovery, higher volumes across most sectors and higher overall earnings. Our results this quarter indicate not only that the economy is recovering, but also demonstrate the hard work of all our teams ensuring that we are always well positioned to meet customer requirements, no matter the economic environment. I should also mention the arrival of the Captain Henry Jackman in Canada in June. On her first trip, she loaded a record grain cargo in Thunder Bay, Ontario,” Mr. Ruhl concluded.
Outlook
As restrictions ease and global supply chains improve, the Domestic Dry-Bulk segment is expecting volumes in the iron and steel and construction sectors to continue to strengthen compared to last year, with salt and agriculture volumes expected to return to more normal levels in the third quarter. Higher fuel prices are also likely to continue, driving higher fuel recoveries in the second half of 2021. As we noted in our 2020 financial reports, Product Tanker utilization was not immediately impacted by the onset of the pandemic as our vessels were utilized to move product between major markets, absorbing available days that were not required to service the Ontario market. This trade pattern ceased in late 2020 and tanker utilization is now being impacted by weaker demand in wholesale petroleum product markets in central Canada. In the Ocean Self-Unloader segment, Pool performance has not recovered as quickly as hoped, but we are still expecting a positive third and fourth quarter compared to 2020 with volumes in certain sectors expected to continue to improve. There are no dry-dockings planned for the remainder of 2021 and the fleet is set to be fully utilized. In the Global Short Sea segment, the cement sector is expected to remain steady for the remainder of 2021 and, if the substantially improved market rates in the mini-bulker sector remain strong, the segment should continue to experience improved operating results.
Source: Algoma Central Corporation