VICTORIA, June 12 /CNW/ - British Columbia Ferry Services Inc. (BC
Ferries) today released its financial results for the year ended March 31,
2008.
Consolidated net earnings were $37.1 million for the year ended March 31,
2008, compared to net earnings of $48.8 million before an extraordinary gain
the previous year. The decline in net earnings is attributable to the
significant cost of new assets that came into service during the year.
As BC Ferries continues to invest all of its retained earnings into the
largest asset renewal program in its history, amortization and financing costs
will continue to increase. Consequently, the company expects its future
earnings will continue to decrease in the near term, before improving. This is
consistent with the company's long-term financial plan.
Revenues for the year increased from $596.3 million to $640.7 million,
while operating expenses increased from $528.4 million to $569.6 million. The
increase in expenses includes $5.3 million for new safety and training
initiatives.
Fourth quarter revenues increased from $119.0 million to $124.2 million
compared to the same quarter in the prior fiscal year, while total expenses
during the same period increased from $152.2 million to $154.7 million. The
company reported a fourth quarter net loss of $30.5 million compared to a net
loss of $33.2 million during the same quarter the previous year.
Due to the seasonality of ferry travel, BC Ferries typically generates
higher net earnings in the first and second quarters, which are subsequently
reduced by net losses in the last two quarters of its fiscal year. The company
utilizes the third and fourth quarters to perform upgrades, maintenance and
refits, and to undertake mandatory inspections on the majority of its vessels.
Capital expenditures for the year ended March 31, 2008 totalled
$452.5 million, compared to $262.6 million the year prior. Expenditures
included $382.8 million for new vessels, vessel upgrades and vessel
modifications, as well as $54.5 million for terminal upgrades.
"This past year, we made significant capital investments in our fleet,
including almost $320 million of a $542 million project for our three new
Super C-class ships," said BC Ferries President & CEO David L. Hahn. "These
new ships, which are on time and considerably under budget, will provide a
world-class travel experience for our customers for decades to come."
The first new ship in the series, the Coastal Renaissance, began service
on March 8, 2008 on the Departure Bay - Horseshoe Bay route, with the Coastal
Inspiration beginning service later this month on the Duke Point - Tsawwassen
run and the Coastal Celebration entering service on the Swartz Bay -
Tsawwassen route this fall.
"In addition to our major fleet renewal program, we are continuing to
invest in our terminals to replace aging marine structures and ensure we are
providing the best in safety and service for our customers," said Hahn. "This
past year, we began a $9 million terminal expansion project at Swartz Bay and
continued a $41 million project at Departure Bay to expand the holding
compound and add the new Nanaimo Quay, which will open this summer to offer
our customers a wide range of food and retail options."
BC Ferries continues to be concerned about the unprecedented level of
fuel prices and the resulting impact on the cost of operating the system and
on customers' travel decisions. If oil prices remain at record high levels, BC
Ferries anticipates the need for fuel surcharges to be implemented in the near
future.
BC Ferries' full financial statements, including notes and Management's
Discussion and Analysis, are filed on SEDAR and will be available at
www.sedar.com.
BC Ferries, one of the largest ferry operators in the world based on
passengers transported annually and transportation infrastructure, carried
more than 21 million passengers and 8 million vehicles during the fiscal year
ended March 31, 2008. BC Ferries provides frequent year-round ferry
transportation services to the West Coast of Canada on 25 routes, currently
supported by 37 vessels and 47 terminals, and also manages other remote routes
through contracts with independent operators.
This release contains historical information and may contain certain
forward-looking statements that relate to future events or future performance.
These forward-looking statements are based upon management's current
expectations and assumptions as to a number of factors, including, the risks,
uncertainties and other factors as described in BC Ferries' Management's
Discussion & Analysis and certain of the other BC Ferries' documents available
at www.sedar.com. These forward-looking statements are based upon information
currently available to management and BC Ferries assumes no obligation to
update or revise them to reflect new events or circumstances. If management's
expectations and assumptions prove to be incorrect, or factors change, then
actual results could differ materially from the forward-looking information
contained in this release.BRITISH COLUMBIA FERRY SERVICES INC.
Consolidated Balance Sheets
(expressed in thousands)
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As at March 31,
2008 2007
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Assets
Current assets:
Cash and cash equivalents $ 130,409 $ 180,123
Short-term investments 17,040 16,046
Accounts receivable 16,234 19,050
Prepaid expenses 7,285 5,879
Inventories 17,055 16,492
Derivative assets 16,373 -
Regulatory assets 4,775 -
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209,171 237,590
Capital assets 1,303,644 918,824
Deferred financing costs 669 9,580
Regulatory assets 7,729 21,721
Long-term land lease 29,238 28,060
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$1,550,451 $1,215,775
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Liabilities and Shareholders' Equity
Current liabilities:
Accounts payable and accrued liabilities $ 91,263 $ 72,511
Short-term debt - 24,888
Interest payable on long-term debt 15,718 12,663
Accrued employee costs 53,213 47,393
Deferred revenue 15,108 12,031
Regulatory liabilities 3,558 90
Current portion of accrued employee future
benefits 800 800
Current portion of obligations under capital
leases 690 26
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180,350 170,402
Accrued employee future benefits 13,020 13,755
Derivative liabilities - 2,831
Regulatory liabilities 16,833 -
Long-term debt 1,028,872 749,628
Obligations under capital leases 719 112
Other long-term liabilities 76 -
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1,239,870 936,728
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Shareholders' equity:
Share capital 75,478 75,478
Retained earnings 235,103 203,569
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310,581 279,047
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$1,550,451 $1,215,775
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BRITISH COLUMBIA FERRY SERVICES INC.
Consolidated Statements of Earnings,
Comprehensive Income and Retained Earnings
(expressed in thousands)
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Years ended March 31,
2008 2007
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Revenue:
Tariffs $ 382,229 $ 363,228
Ferry service fees 122,702 108,396
Federal-Provincial Subsidy Agreement 25,856 25,309
Retail 79,235 72,028
Other income 30,707 27,318
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640,729 596,279
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Expenses:
Operations 334,743 309,121
Maintenance 88,412 84,886
Administration 49,765 50,615
Cost of retail goods sold 29,936 28,226
Amortization 66,793 55,515
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569,649 528,363
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Earnings from operations 71,080 67,916
Gain on foreign exchange 130 344
Interest expense (33,127) (19,292)
Loss on disposal of capital assets (989) (183)
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Net earnings before extraordinary gain 37,094 48,785
Extraordinary gain - 61,272
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Net earnings 37,094 110,057
Other comprehensive income - -
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Net earnings and comprehensive income 37,094 110,057
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Retained earnings, beginning of year 203,569 99,550
Adjustment to retained earnings 478 -
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Restated balance, beginning of year 204,047 99,550
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Preferred share dividend (6,038) (6,038)
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Retained earnings, end of year $ 235,103 $ 203,569
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BRITISH COLUMBIA FERRY SERVICES INC.
Consolidated Statements of Cash Flows
(expressed in thousands)
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Years ended March 31,
2008 2007
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Cash provided by (used in):
Operations:
Net earnings before extraordinary gain $ 37,094 $ 48,785
Extraordinary gain - 61,272
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Net earnings 37,094 110,057
Items not involving cash:
Amortization 66,793 55,515
Other non-cash charges 1,522 (1,897)
Long-term regulatory costs deferred 11,622 3,893
Change in operating working capital 6,630 (7,108)
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123,661 160,460
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Financing:
Dividends paid on preferred shares (6,038) (6,038)
Deferred financing costs incurred (1,787) (1,895)
Repayment of capital lease obligations (835) -
Proceeds from issuance of bonds and other
long-term debt 290,000 250,000
Proceeds from short-term loans 39,836 203,843
Repayment of short-term loans (64,544) (179,135)
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256,632 266,775
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Investing:
Proceeds from disposal of capital assets 51 31
Purchase of capital assets (427,504) (248,316)
Increase in lands under long-term lease (1,560) (60)
Purchase of short-term investments (994) (1,058)
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(430,007) (249,403)
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(Decrease) increase in cash and cash
equivalents (49,714) 177,832
Cash and cash equivalents, beginning of year 180,123 2,291
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Cash and cash equivalents, end of year $ 130,409 $ 180,123
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-------------------------------------------------------------------------%SEDAR: 00020627E
For further information: BC Ferries, Communications, Victoria: (250)
978-1267
