Friday, June 12, 2009

BC Ferries Financial Results Mar. 2009

BC FERRIES RELEASES
YEAR-END RESULTS


British Columbia Ferry Services Inc. (BC Ferries) today released its financial results for the year ended March 31, 2009.

Consolidated net earnings were $9.0 million for the year ended March 31, 2009, compared to net earnings of $37.1 million the previous year. As expected, BC Ferries earnings reflect increased amortization and financing costs as a result of the acquisition of new vessels. With the ship replacement program complete for the major routes and well underway for the northern routes, capital expenditures will be significantly lower for the next few years.

Revenues for the year increased from $640.7 million to $681.8 million, while operating expenses increased from $569.6 million to $624.1 million. The increase in expenses includes a $40.9 million increase in fuel costs, the majority of which was previously included in deferral accounts rather than in expense, and a $26.3 million increase in amortization costs. In addition, financing costs increased by $17.0 million.

“This past fiscal year we saw a decrease in traffic due to the current global economy, reduced tourism, rising unemployment, higher fuel prices last summer, and significant weather events in December and January.” said David L. Hahn, BC Ferries’ President and CEO. “All of these factors have negatively impacted commercial and discretionary travel, which is certainly a concern for us.” Vehicle and passenger traffic decreased 5.2 per cent and 4.9 per centrespectively, year over year. “We implemented an aggressive cost management program to align our expenses with our reduced revenues.”

Capital expenditures for the year ended March 31, 2009 totalled $493.9 million compared to $452.5 million the year prior. New vessels, and vessel upgrades and modifications account for $424.4 million of the capital projects. This level of expenditure reflects significant investments in BC Ferries’ fleet, terminals and information systems to increase customer service and operating efficiency.

During the fiscal year ended March 31, 2009, three new vessels, the Coastal Inspiration, Coastal Celebration and Island Sky all entered service, and BC Ferries took possession of a fourth new ship, the Northern Expedition. “The Super C-class vessels came in at least $25.0 million under budget, which is a major accomplishment,” said Hahn. “We are extremely pleased with all of the new vessels we’ve added to the fleet, which will serve our customers well for many decades to come.”

Fourth quarter revenues increased from $124.2 million to $128.5 million compared to the same quarter in the prior year, while total expenses during the same period increased from $154.7 million to $166.9 million. BC Ferries reported a fourth quarter net loss of $38.4 million compared to a net loss of $30.5 million during the same quarter the previous year. Due to the seasonality of ferry travel, BC Ferries typically generates higher net earnings in the spring and summer quarters, which historically are reduced by net losses in the last two quarters of the fiscal year.

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.

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