A diverse vessel and market portfolio continues to provide resilience amid global uncertainty and evolving customer demand
Algoma Central Corporation (TSX: ALC) ("Algoma", the "Company") today reported its results for the three and six months ended June 30, 2025. Algoma reported second quarter revenues of $211,715, compared to revenues of $180,968 in 2024. Net earnings for the 2025 second quarter were $32,883 compared to net earnings of $17,464 in 2024. EBITDA was $72,582 in the second quarter compared to $48,406 in 2024. All amounts reported below are in thousands of Canadian dollars, except for per share data and where the context dictates otherwise.
"During the second quarter, four newbuild vessels entered service across our domestic product tanker, domestic dry-bulk, and FureBear fleets," said Gregg Ruhl, President CEO of Algoma Central Corporation. "With these additions, we now hold ownership interests in 98 vessels, with ten more under construction-three of which are scheduled for delivery in the third quarter. This continued fleet growth is very exciting, but more importantly, it reinforces our diversification and strengthens our resilience in the face of ongoing global uncertainty. As we approach our 126th anniversary in August, we take pride in our historical ability to navigate through economic highs and lows. Following the quarter's end, NovaAlgoma Cement Carriers Limited, our joint venture with Nova Marine Holdings SA, entered a definitive agreement with P&O Maritime Logistics, a DP World subsidiary, for the sale of a 51% controlling interest in NovaAlgoma's wholly owned cement assets. This strategic transaction expands our global reach and aligns us with another strong partner," continued Mr. Ruhl.
Financial Highlights: Second Quarter 2025 Compared to Second Quarter 2024
- Domestic Dry-Bulk segment revenue increased to $123,607 compared to $103,931 in 2024, reflecting improvement in volumes, freight rates and revenue days from two additional vessels. As a result, operating earnings for the segment increased 67% to $26,642 compared to $15,924 in 2024.
- Revenue for Product Tankers increased to $42,173 compared to $33,600 in 2024, primarily due to higher revenue days resulting from a larger domestic fleet, combined with higher rates and fewer dry-dockings this quarter, which generated operating earnings of $4,519 compared to an operating loss of $1,604 in 2024.
- Revenue in the Ocean Self-Unloaders segment increased slightly to $45,320 compared to $42,818 in 2024. This increase was primarily due to an increase in revenue days driven by fewer dry-docking off-hire days, combined with higher volumes and increased rates. Operating earnings increased 65% to $10,475 from $6,361 in 2024.
- Joint venture equity earnings increased slightly quarter-over-quarter, with earnings of $7,521 in 2025 compared to $7,026 for the prior year period. Higher revenue and earnings in the cement and mini-bulker fleets reflected the addition of new cement carriers partially offset by an increase in dockings in the mini-bulker fleet. Results of the handy-sized fleet were impacted by continued weather related delays. Earnings in the product tanker fleet were higher due to the addition of seven newbuild vessels as well as two additional vessels operating in an international pool.
"Core performance remained strong, with reported revenues rising across our marine segments," said Christopher Lazarz, Chief Financial Officer at Algoma Central Corporation. "In Domestic Dry-Bulk, higher volumes in iron ore and agriculture offset lower shipments in salt and construction materials. A new iron ore customer and growth in export grain provided momentum, though supply issues constrained salt volumes, and trade uncertainty tempered aggregate demand. In Product Tankers, a larger fleet and fewer dry-dockings contributed to continued strength and improved utilization. Ocean Self-Unloaders benefited from robust Pool performance and higher base freight rates. Meanwhile, Global Short Sea Shipping saw stronger equity earnings, particularly in the mini-bulker and cement fleets, and our FureBear joint venture continues to perform well with seven of ten newbuild vessels now in service," concluded Mr. Lazarz.
Consolidated Statement of Earnings | |||||||||||||||
Three Months Ended | Six Months Ended | ||||||||||||||
For the periods ended June 30 | 2025 | 2024 | 2025 | 2024 | |||||||||||
Revenue |
| 211,715 | 180,968 |
| 318,916 | 290,182 | |||||||||
Operating expenses | (144,208 |
| (136,740 | (257,466 |
| (245,738 | |||||||||
Selling, general and administrative expenses | (12,184 |
| (10,182 | (23,173 |
| (21,823 | |||||||||
Depreciation and amortization | (20,157 |
| (18,122 | (38,787 |
| (35,250 | |||||||||
Operating earnings (loss) | 35,166 | 15,924 | (510 |
| (12,629 | ||||||||||
Interest expense | (6,660 |
| (5,227 | (11,288 |
| (9,886 | |||||||||
Interest income | 110 | 581 | 245 | 1,489 | |||||||||||
Gain on sale of asset |
| 57 |
| 421 | |||||||||||
Foreign exchange gain (loss) | 3,493 | (291 | 3,316 | (168 | |||||||||||
32,109 | 11,044 | (8,237 |
| (20,773 | |||||||||||
Income tax recovery (expense) | (6,747 |
| (606 | 5,630 | 10,407 | ||||||||||
Net earnings from investments in joint ventures | 7,521 | 7,026 | 12,210 | 10,577 | |||||||||||
Net earnings |
| 32,883 | 17,464 |
| 9,603 | 211 | |||||||||
Earnings per share |
| 0.81 | 0.44 |
| 0.24 | 0.01 | |||||||||
EBITDA
The Company uses EBITDA as a measure of the cash generating capacity of its businesses. The following table provides a reconciliation of net earnings in accordance with GAAP to the non-GAAP EBITDA measure for the three and six months ended June 30, 2025 and 2024 and presented herein:
Three Months Ended | Six Months Ended | ||||||||||||||
For the periods ended June 30 | 2025 | 2024 | 2025 | 2024 | |||||||||||
Net earnings |
| 32,883 | 17,464 |
| 9,603 | 211 | |||||||||
Depreciation and amortization | 28,168 | 23,165 | 53,787 | 45,148 | |||||||||||
Net interest and tax recoveries | 15,893 | 8,095 | 10,940 | 2,517 | |||||||||||
Foreign exchange loss (gain) | (4,319 |
| 551 | (4,084 |
| 483 | |||||||||
Net gain on sale of assets | (43 |
| (869 | (41 |
| (1,218 | |||||||||
EBITDA(1) |
| 72,582 | 48,406 |
| 70,205 | 47,141 | |||||||||
Select Financial Performance by Business Segment | |||||||||||||||
Three Months Ended | Six Months Ended | ||||||||||||||
For the periods ended June 30 | 2025 | 2024 | 2025 | 2024 | |||||||||||
Domestic Dry-Bulk | |||||||||||||||
Revenue |
| 123,607 | 103,931 |
| 154,159 | 135,005 | |||||||||
Operating earnings (loss) | 26,642 | 15,924 | (10,518 |
| (19,692 | ||||||||||
Product Tankers | |||||||||||||||
Revenue | 42,173 | 33,600 | 75,464 | 67,646 | |||||||||||
Operating earnings (loss) | 4,519 | (1,604 | 4,141 | 2,373 | |||||||||||
Ocean Self-Unloaders | |||||||||||||||
Revenue | 45,320 | 42,818 | 88,045 | 86,018 | |||||||||||
Operating earnings | 10,475 | 6,361 | 16,920 | 14,717 | |||||||||||
Corporate | |||||||||||||||
Revenue | 615 | 619 | 1,248 | 1,513 | |||||||||||
Operating loss | (6,470 |
| (4,757 | (11,053 |
| (10,027 | |||||||||
The MD&A for the three and six months ended June 30, 2025 and 2024 includes further details. Full results for the three and six months ended June 30, 2025 and 2024 can be found on the Company's website at www.algonet.com/investor-relations and on SEDAR at www.sedarplus.ca.
Business Outlook(2)
In the Domestic Dry-Bulk segment, projected demand for the balance of the year is strong and will require the full fleet to operate through the remainder of the season. Domestic iron and steel volumes face demand constraints related to U.S. tariffs on Canadian steel and will depend on a favourable resolution of the trade dispute. Strong grain demand in the fourth quarter may help to offset any reductions in other sectors if the new crop develops as expected. Construction and salt volumes are expected to improve from second quarter levels and remain steady through the balance of the year.
In the Product Tanker segment, we expect customer demand to remain steady in 2025 and for fuel distribution patterns within Canada to support strong vessel utilization for the vessels trading under Canadian flag, including the two new tankers operating on long-term contracts with Irving Oil. The fleet is expected to remain in full deployment with all ten Canadian vessels in operation.
In the Ocean Self-Unloader segment, vessel supply at the Pool level is fairly well balanced for the remainder of the year. Volumes in the aggregate and gypsum industries declined as anticipated during the second quarter and we expect these industries will continue to be impacted for the balance of the year; volumes in the other sectors are expected to remain steady moving forward. Two additional vessels in the Algoma fleet will be dry-docked over the remainder of 2025 (for a total of four dry-docks in 2025), which is expected to have a significant impact on available days. The first of three new ocean self-unloaders is expected to be delivered in the third quarter of 2025.
Within our global joint ventures, we anticipate steady earnings from the cement fleet, with most assets committed to long-term time charter contracts. The handy-size fleet, together with the mini-bulker fleet, is expected to perform at reduced levels compared to 2024. Two newbuild mini-bulkers and two pneumatic cement carriers are currently under construction and are expected to be delivered between 2025 and 2027, with the first mini-bulker set to arrive in the third quarter of 2025. These vessels will bring the newbuilds added to the mini-bulker fleet to six since 2020. With the delivery of the first seven FureBear newbuilds in 2024 and the first half of 2025, three new tankers remain on order for the joint venture, with delivery expected between the third quarter of 2025 and early 2026. The Company is anticipating a continued steady rate environment for these tankers.
Global tariffs could increase operating costs and reduce trade volumes, potentially leading to shifts in global supply chain routes. While Algoma is closely monitoring the situation, we do not anticipate major changes in cargo volumes at this time; however, we are expecting continued higher costs across our supply chains, and are exploring ways to mitigate potential impact.
Normal Course Issuer Bid
Effective March 21, 2025, the Company renewed its normal course issuer bid (the "2025 NCIB") to purchase up to 2,028,391 of its common shares ("Shares"), representing approximately 5% of the 40,567,816 Shares issued and outstanding as of the close of business on March 7, 2025. Under the 2025 NCIB, no Shares were purchased and cancelled for the period ended June 30, 2025.
Cash Dividends
The Company's Board of Directors authorized payment of a quarterly dividend to shareholders of $0.20 per common share. The dividend will be paid on September 2, 2025 to shareholders of record on August 19, 2025.
Notes
(1) Use of Non-GAAP Measures
The Company uses several financial measures to assess its performance including earnings before interest, income taxes, depreciation, and amortization (EBITDA), free cash flow, return on equity, and adjusted performance measures. Some of these measures are not calculated in accordance with Generally Accepted Accounting Principles (GAAP), which are based on International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB), are not defined by GAAP, and do not have standardized meanings that would ensure consistency and comparability among companies using these measures. From Management's perspective, these non-GAAP measures are useful measures of performance as they provide readers with a better understanding of how management assesses performance. For further information on Non-GAAP measures please refer to page 2 in the Company's Management's Discussion and Analysis for the three and six months ended June 30, 2025 and 2024.
(2) Forward Looking Statements
Algoma Central Corporation's public communications often include written or oral forward-looking statements. Statements of this type are included in this document and may be included in other filings with Canadian securities regulators or in other communications. All such statements are made pursuant to the safe harbour provisions of any applicable Canadian securities legislation. Forward-looking statements may involve, but are not limited to, comments with respect to our objectives and priorities for 2025 and beyond, our strategies or future actions, our targets, expectations for our financial condition or share price and the results of or outlook for our operations or for the Canadian, U.S. and global economies. The words "may", "will", "would", "should", "could", "expects", "plans", "intends", "trends", "indications", "anticipates", "believes", "estimates", "predicts", "likely" or "potential" or the negative or other variations of these words or other comparable words or phrases, are intended to identify forward-looking statements.
By their nature, forward-looking statements require us to make assumptions and are subject to inherent risks and uncertainties. There is significant risk that predictions, forecasts, conclusions or projections will not prove to be accurate, that our assumptions may not be correct and that actual results may differ materially from such predictions, forecasts, conclusions or projections. We caution readers of this document not to place undue reliance on our forward-looking statements as a number of factors could cause actual future results, conditions, actions or events to differ materially from the targets, expectations, estimates or intentions expressed in the forward-looking statements.
Algoma Central Corporation is a global provider of marine transportation, owning and operating dry and liquid bulk carriers that serve critical industries throughout the Great Lakes-St. Lawrence Region and internationally. Focused on delivering exceptional customer service, utilizing fuel efficient vessels, and advancing innovative technologies, Algoma drives productivity while contributing to economic growth, strengthening communities, and supporting its people. Algoma truly is Your Marine Carrier of Choice. Learn more at algonet.com.
View source version on businesswire.com: https://www.businesswire.com/news/home/20250806519102/en/
Contacts:
Gregg A. Ruhl
President CEO
905-687-7890
Christopher A.L. Lazarz
Chief Financial Officer
905-687-7940
