Thursday, November 29, 2007

BC FERRIES FINANCIAL RESULTS

BC FERRIES RELEASES

SECOND QUARTER FINANCIAL RESULTS

British Columbia Ferry Services Inc. (BC Ferries) today released its second quarter financial results with net earnings before extraordinary gain of $61.0 million and $75.4 million for the three- and six-month periods ended September 30, 2007, down from $68.9 million and $83.8 million for the three and six months ended September 30, 2006.

“These earnings allow us to continue our extensive fleet and asset renewal program to ensure the ongoing safety and reliability of our operations,” said BC Ferries’ President and CEO, David L. Hahn. “Our commitment to rebuilding our infrastructure is already showing positive results with two new ships added to the fleet last year and significant upgrades well underway at many of our terminals, including extensive modifications to prepare for the arrival of our three new Super C-class vessels entering service next year.”

For the six months ended September 30, 2007, $80.2 million was invested in BC Ferries’ fleet, terminals and information systems, including:

• $56.8 million in new vessels, vessel upgrades and modifications;

• $12.4 million in terminal marine structures;

• $8.5 million in terminal and building upgrades and equipment; and,

• $2.5 million in computer hardware and software development.

For the three months ended September 30, 2007, total revenue increased from $202.9 million to $220.2 million, while total expenses increased from $134.0 million to $159.2 million, compared to the same period last year. The increase in expenses was primarily due to a:

• $7.7 million increase in operations expenses, including a $5.0 million increase in wages and benefits;

• $7.3 million increase in maintenance costs, reflecting BC Ferries’ ongoing significant investments in its fleet and other infrastructure; and

• $6.9 million increase in interest and amortization expenses resulting from new vessels and other assets entering service.

Total revenue for the six months ended September 30, 2007 was $379.9 million compared to $349.3 million for the six months ended September 30, 2006. Expenses for the six-month period were $304.5 million, up from $265.5 million for the six months ended September 2006.

At September 30, 2007, the balance in BC Ferries’ deferred fuel cost accounts was $13.5 million, down from $18.3 million at June 30, 2007. The reduction is due to the highly seasonal nature of ferry travel whereby BC Ferries carries the majority of its passengers during its second quarter. The fuel deferral account balance is expected to rise again during the last two quarters of the fiscal year.

Despite the reduction in the deferred fuel cost accounts, BC Ferries continues to be concerned about the high cost of fuel. The company has implemented a wide variety of fuel reduction measures and is continuing to look for ways to further reduce its fuel consumption.

The full financial statements, including notes and Management’s Discussion and Analysis, are filed on SEDAR and will be available at www.sedar.com.


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