BC Ferries Releases First Quarter Results
Aug 19, 2010
(News Release) VICTORIA – British Columbia Ferry Services Inc. (BC Ferries) announced its first quarter results today. Net earnings were $0.9 million for the first three months ended June 30, 2010
compared to net losses of $3.6 million in the first quarter of the previous year.
In the first quarter, revenues increased by 6.7 per cent to $190.2 million, with total expenses increasing 4.1 per cent to $189.3 million, compared to the first quarter last fiscal year.
The increase in expenses is largely attributed to fuel, interest and amortization expenses, as well as wage rate increases in accordance with the Collective Agreement,.
Capital expenditures in the three months ended June 30, 2010 totalled $26.0 million as follows:
- $10.3 million in terminal marine structures;
- $7.3 million in information technology;
- $5.3 million in building upgrades and equipment;
- $3.1 million in vessel upgrades and modifications.
“We remain concerned about the soft state of tourism currently in B.C. and as a result we are closely monitoring our expenditures,” said David L. Hahn, BC Ferries’ President and CEO. “The summer months are typically the time of year when BC Ferries generates its annual profits and strong numbers in July and August are important to our bottom line.”
In the first quarter of fiscal 2011, BC Ferries experienced a decline of 1.6 per cent in vehicle traffic and 1.2 per cent in passenger traffic compared to the same quarter last year, while
drop-trailer and other commercial traffic increased.
Significant events during the first quarter include the May 11, 2010 opening of BC Ferries new Vacations Centre located across the street from the expanded Convention Centre in downtown Vancouver. In addition, on May 18, 2010, the 28-year old Quinsam returned to service on the Gabriola route following an extensive $19 million upgrade to prepare the ship for another 17 years of service.
Currently BC Ferries offers fuel rebates of two per cent of tariffs on average on the majority of its routes. The mid-week CoastSaver promotional fares were offered on the three major routes from May 25, 2010 through July 29, 2010.
On June 3, 2010, Bill 20 – Miscellaneous Statutes Amendment Act (No.3), 2010 (Bill 20) received Royal Assent. Bill 20 amends several statutes, including the Coastal Ferry Act. It includes changes to the governance and regulatory framework within which BC Ferries operates. The costs to BC Ferries to implement the regulatory, governance and administrative changes resulting from Bill 20 are uncertain at this time.
As part of the federal government’s Infrastructure Stimulus Fund program, BC Ferries will qualify for partial reimbursement of eligible costs for eleven terminal upgrades including eight sewage pump-ashore and waste water treatment projects. The net funding expected to be received is $7.5 million.
BC Ferries continued its multi-year project to upgrade security at nine terminals which includes fencing, lighting, access control and closed circuit television, as well as upgrades to foot passenger ticketing areas and baggage screening. BC Ferries received $9.1 million (includin $3.2 million this quarter) of federal funding through the Transport Canada Marine Security Contribution Program to help offset the cost of this project.
Full financial statements, including notes and Management’s Discussion & Analysis, are filed on SEDAR and will be available at www.sedar.com.