Westshore Terminals announces Q4 2012 distribution and update on trestle damage at Berth 1
VANCOUVER, Dec. 13, 2012 /CNW/ - Westshore Terminals Investment Corporation (TSX: WTE) (the "Corporation") announced today that a payment of $20,418,754 (representing $0.275 per share) will be paid on or before January 15, 2013 to shareholders of record on December 31, 2012 as compared to a distribution of $19,397,817 (representing $0.26125 per unit) for the fourth quarter of 2011. The Q4 2012 distribution is a dividend only payment and is therefore not comparable with the Q4 2011 distribution which was comprised of a dividend of $0.13 per unit and an interest payment of $0.13125 per unit. The change in the form of distribution payment results from the corporation's capital restructuring completed in July 2012, and previously reported.
The Q4 distribution has been negatively impacted as a result of the incident that occurred on December 7, 2012 when the ship Cape Apricot ran through the trestle at Berth 1, rendering ship loading at Berth 1 impossible for the balance of the year and likely into mid to late Q1 2013. Fourth quarter 2012 dividends prior to this interruption had been contemplated at $0.34 per share.
Damage investigation continues in and around the trestle area at Berth 1 and it is anticipated that the extent of the damage and the required schedule of repairs will be better known by early next week. In the meantime operations at Berth 2 will continue in the ordinary course and Westshore will work with its customers and the railroads to reduce the impact as much as possible. The repair time period will be updated as additional information becomes known.
Despite the damage done at Westshore, there were no injuries. The ship suffered only minor damage, was subsequently loaded at Berth 2 and left Westshore. Clean-up operations are underway to remove the debris of the trestle and conveyor system from the water. There is minimal environmental impact from the small amount of coal spilled into the water as coal is inert and not harmful in its natural state. The water lot located between Berth 1 and the terminal site contains several man made rock reefs which contain very active healthy ecosystems that have thrived and have coexisted over the many years the terminal has been in business. The man-made reefs provide fish habitat and vibrant seaweed growth, some of which can be seen in the reported aerial photographs, and which appear to have been misinterpreted as coal in the water.
During Westshore's 42 year history, over 8,300 ship dockings have occurred without incident. Transport Canada is investigating this incident. All ship dockings are under the control of an independent marine pilot and the ship crew.
The Corporation will be pursuing recovery from the ship owner and/or its insurance carriers for its losses. The Corporation also carries property and business interruption insurance which, net of any deductibles that apply, are expected to cover the remaining costs to repair the damaged trestle and related equipment and most of the lost profits. As the timing for recovery of the lost profits from insurance companies is unknown at this time, the Corporation will not pay dividends based on assumed insurance recoveries. This will be assessed once total losses are known and recovered.
For the eleven months ended November 30, 2012, Westshore loaded 24.9 million tonnes as compared to 24.7 million tonnes for the same period in 2011. For Q4 2012, Westshore anticipates it will load approximately 5.9 million tonnes compared to Q4 2011 of 7.0 tonnes. This lower volume is materially impacted by the trestle incident. On that basis, Westshore anticipates volumes in 2012 will in total be approximately 26.4 million tonnes. It was anticipated that without the trestle incident, throughput volumes for 2012 would have been about the same as volumes loaded in 2011 at 27.3 million tonnes (notwithstanding the operational interruptions at the terminal described below which occurred throughout the year), but at higher average loading rates than the average for 2011 as a whole.
Planned interruptions at the terminal occurred during the last week of March and first week of April 2012 (when the chutes in three of the major transfer towers were successfully replaced and the terminal took the opportunity to perform some significant accelerated longer term maintenance and upgrades to the site). Approximately seven weeks of additional interruptions occurred from the beginning of October 2012 to late-November when a new double rotary railcar dumper was installed, replacing the old single dumper. These interruptions were part of previously announced maintenance and capital expansion projects. With the completion of these projects (and completed repairs to the trestle), it is anticipated that the capacity of the terminal will be approximately 33 million tonnes per year, based on certain regular operating assumptions.
For 2013, throughput levels will be negatively impacted during Q1 because of the ongoing repair work to the trestle and related equipment and the subsequent need to ramp up production over time. As a result, and factoring in this disruption, total volumes are anticipated to be 28 million tonnes or more for the year as a whole. In the absence of this incident, it had been anticipated that throughput levels would have been approximately 30 million tonnes or more at average rates higher than 2012 as a whole.
The Corporation announced in September that it will introduce a distribution reinvestment plan (the "Plan"). The Plan will be effective for Q1 2013 distributions. Under the Plan, Canadian resident shareholders will be able to designate that all or a portion of the quarterly distributions payable on their shares be applied towards the purchase of additional shares through the facilities of The Toronto Stock Exchange at prevailing market prices. Participants in the Plan will not pay administrative or brokerage costs associated with the purchase of shares under the Plan.
Computershare Investor Services Inc. ("Computershare") has been appointed as Plan Agent and will be responsible for the administration of the Plan. Computershare will hold shares acquired under the Plan in an account on behalf of Participants.
Further details regarding the Plan, including the documentation to be completed by those shareholders wishing to participate in the Plan, will be made available to shareholders before the end of January 2013. The Corporation's predecessor previously had a similar plan that was in existence from June 2007 - December 2010.
The foregoing statements concerning anticipated throughput volumes, future capacity, timing and extent of repairs, cost recoveries and dividend levels, are forward-looking statements that reflect the current expectations of the Corporation with respect to future events and performance. Forward-looking statements should not be read as guarantees of future performance or results, and will not necessarily be accurate indications of whether such performance or results will be achieved.
Forward-looking statements are based on information available at the time they are made, assumptions made by management, and management's good faith belief with respect to future events, and will be impacted by and are subject to the risks and uncertainties outlined in the Corporation's Annual Information Form that could cause actual performance or results to differ materially from those reflected in the forward-looking statements, historical results or current expectations.
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