Canada National (CN) has reported its financial and operating results for the fourth quarter and the full year ended December 2018.
Revenues for Q4 increased by 16% to C$3.8bn, when compared to the same period in 2017. The increase in revenues was mainly attributable to higher volumes of petroleum crude and Canadian grain, freight rate increases, higher applicable fuel surcharge rates, and the positive translation impact of a weaker Canadian dollar, partly offset by lower volumes of frac sand.
Revenues increased for petroleum and chemicals (C$272m or 50%), intermodal (C$75m or 9%), grain and fertilizers (C$74m or 13%), coal (C$30m or 21%), forest products (C$29m or 7%), metals and minerals (C$20m or 5%), other revenues (C$13m or 7%), and automotive (C$10m or 5%).
Operating income for the quarter stood at C$1.4bn, an increase of 19%. Q4 operating margin was 38.1%, an increase of 0.8 points. Operating expenses for the quarter increased by 14% to C$2.4bn. This was mainly due to higher labour costs mainly as a result of an increase in headcount, and employee termination benefits and severance costs related to a workforce reduction program; higher fuel prices; higher costs as a result of increased volumes of traffic; and the negative translation impact of a weaker Canadian dollar.
Revenues for the full year 2018 increased by 10% to C$14.3bn, when compared to 2017. Revenues increased for petroleum and chemicals (C$452m or 20%), intermodal (C$265m or 8%), metals and minerals (C$166m or 11%), grain and fertilizers (C$143m or 6%), coal (C$126m or 24%), forest products (C$98m or 5%), other revenues (C$25m or 3%), and automotive (C$5m or 1%).
The increase in revenues was mainly attributable to freight rate increases, higher applicable fuel surcharge rates and higher volumes of petroleum crude, refined petroleum products, coal, international container traffic and Canadian grain.
Operating margin for the full year stood at 38.4%, a decrease of 1.8 points compared to 2017. Operating expenses increased by 13% to C$8.8bn. The increase was mainly due to higher fuel prices, higher costs as a result of increased volumes of traffic and operating performance below 2017 levels.
JJ Ruest, President and Chief Executive Officer of CN, commented: “We are focused on operational productivity and services that resonate with customers. In 2019, our record capital program of C$3.9 billion will be focused on investing in the renewal of a more efficient and reliable locomotive fleet, adding network capacity to accommodate our solid pipeline of growth in diverse markets and bringing technology to our Precision Scheduled Railroading.”
Source: CN
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