Algoma Central Corporation Announces 2015 Results for the Three and Six Months Ended June 30

(TSX : ALC)

ST. CATHARINES, ON, Aug. 6, 2015 /CNW/ - Algoma Central Corporation ("Algoma" – www.algonet.com) is reporting second quarter revenues of $132, 809 compared to $138,333 for the same period in 2014.  The decrease in revenue was incurred mainly in the Product Tankers segment due to reduced customer demand. In addition, revenues for both Domestic Dry-Bulk and Product Tankers reflect the impact of lower fuel prices compared to 2014. Revenues in the other business units for the 2015 second quarter remained at approximately the same levels as the comparable 2014 period.

Revenues for the six months ended June 30, 2015 of $184,437 were $5,634 lower than the revenues for the same period in the prior year. Domestic Dry-Bulk revenues increased by $4,392 and Real Estate revenues increased by $948. The Product Tanker segment experienced a decrease of $6,605 and the Ocean Shipping segment had a decrease of $5,567.

The segment earnings (loss) after income taxes, excluding the impact of the after–tax gain on the contract cancellation of $10,212, for the 2015 second quarter and for the six month period in 2015 were lower when compared to same periods in 2014. The decreases in both periods were due primarily to lower earnings in the Domestic Dry-Bulk segment.

Net earnings for the 2015 second quarter and six months reflect a one time gain on the cancellation of shipbuilding contracts of $10,212. Excluding this gain from the 2015 results, net earnings for the second quarter would have been $13,118 compared to net earnings of $14,946 for the 2014 second quarter, and for the six month period, the 2015 net loss would have been $9,874 compared to a net loss of $6,920 for the same period in the prior year.

The results from operations are as follows:



Three Months

Six Months



Ended June 30

Ended June 30

Revenues


2015

2014

2015

2014







Domestic Dry-Bulk


$    95,440

$    96,173

$  114,363

$  109,971

Product Tankers


19,513

24,423

38,158

44,763

Ocean Shipping


17,053

16,625

27,758

33,325

Real Estate


7,673

7,425

15,602

14,654









$  139,679

144,646

$  195,881

$  202,713

Revenues of the joint ventures


(6,870)

(6,313)

(11,444)

(12,642)









$  132,809

$  138,333

$  184,437

$  190,071

 




Three Months

Six Months




Ended June 30

Ended June 30

Net Earnings (Loss)

2015

2014

2015

2014








Operating income (loss) net of income tax













Domestic Dry-Bulk

$      4,688

$      9,979

$  (20,781)

$  (15,958)


Gain on cancellation of shipbuilding contracts

10,212

-

10,212

-




14,900

9,979

(10,569)

$  (15,958)


Product Tankers

2,403

2,564

5,631

4,298


Ocean Shipping

5,529

3,559

6,187

7,243


Real Estate

577

539

1,014

747











23,409

16,641

2,263

(3,670)

Not specifically identifiable to segments






Net gain on translation of foreign-denominated 







monetary assets and liabilities

1,707

985

2,039

1,705


Interest expense

(2,597)

(1,961)

(5,226)

(5,181)


Interest income

310

(392)

744

(100)


Income tax (expense) recovery

501

(327)

518

326











$    23,330

$    14,946

$         338

$    (6,920)

Additional details on the results can be found in the Company's Management Discussion and Analysis for the three and six months ended June 30, 2015 and 2014.

Equinox Class Fleet Renewal

The Company entered into contracts in 2010 with Nantong Mingde Heavy Industry Co., Ltd. ("Mingde" or the "Shipyard") in China to construct a total of six Equinox Class dry-bulk vessels, continuing the fleet renewal initiative begun with the arrival of the Radcliffe R Latimer in 2009 and the Algoma Mariner in 2011.

By June 2014, the Company had taken delivery of two bulkers, the Algoma Equinox and the Algoma Harvester.  The remaining four vessels, all self unloaders, were expected to be delivered in 2015 and 2016. 

On December 26, 2014, Mingde entered a court supervised restructuring process. During the second quarter of 2015, after consultation with counsel and meeting with the restructuring administrator of the Shipyard, the Company concluded it is unlikely the restructuring process is going to succeed and therefore advised the Shipyard it no longer intended to take delivery of the four vessels.

While delayed, the overall fleet renewal program, of which these Equinox Class ships were a part, remains a priority for the Company. In addition to the two new 650' self-unloaders announced in the first quarter, the Company is currently in negotiation with shipyards for a total a five Equinox Class 740' self-unloaders in place of the four cancelled Mingde-built  vessels. Management expects the two 650' Equinox self-unloaders to be delivered in 2017 and is targeting late 2017 through 2018 for delivery of the five 740' Equinox self-unloaders. 

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 September 1, 2015 to shareholders of record on August 18, 2015. 

About Algoma Central Corporation

Algoma Central Corporation operates the largest Canadian flag fleet of dry and liquid bulk carriers operating on the Great Lakes - St. Lawrence Waterway, including 17 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 provides ship management services for other ship owners and 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.

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 12 to 16 of Algoma's Annual Information Form for the year ended December 31, 2014, which is available on SEDAR at www.sedar.com.

SOURCE Algoma Central Corporation

For further information: Ken Bloch Soerensen, President and CEO, 905-687-7885; Peter D. Winkley, CPA, CA, Vice President, Finance and CFO, 905-687-7897

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