Canada’s largest railway has posted a 17 percent year-over-year increase in fourth quarter revenues and increased its quarterly dividend to shareholders by six cents per share to 31 cents.
Canadian National Railway reported fourth quarter earnings of $3.2 billion during the three months ending Dec. 31, 2014, up from 2.75 billion a year earlier. It reported the financial results Jan. 27.
The strong fourth quarter boosted CN’s full-year 2014 revenues to more than $12.1 billion, up 15 percent from $10.6 billion in 2013.
Net income for the full year was listed at $3.2 billion, up from $2.6 billion in 2013.
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The company said it expects a 3.4 percent increase in carloads, prices above inflation and improved margins this year, partly because of lower fuel costs during the first part of 2015.
CN has also set aside $2.6 billion this year for capital spending, including $1.3 billion on track improvements and rail network expansion and $500 million on equipment, including 90 new locomotives.
Full-year labour costs were down by $2 million last year at $592 million.
CN president Claude Mongeau told a conference call with investors that the company hauled record amounts of prairie grain last year despite extreme winter weather during the first quarter.
He said Canada finished the 2013-14 crop year with a near-normal grain carryout, despite a record cold winter and a record large harvest in the fall of 2013.
“We moved …13 percent more grain (last year) than at any other time in Canadian history,” Mongeau said. “We finished the year with effectively an average carryout, so (despite) a 100-year crop and a brutal winter, we finished the year with a normal carryout. That doesn’t happen without solid service and solid throughput.”
Mongeau said politicians and members of a federal panel reviewing the Canada Transportation Act should view CN’s performance favourably when formulating new rail policy.
The company is 16 percent ahead of last year’s pace, he added.
“I think policy-makers are looking backward and they’re realizing now that we did a great job and the market — the commercial framework — works,” Mongeau said.
“It’s our job now to take that evidence and convince (policy-makers) to reflect with facts as opposed to emotion.”
Mongeau made his comments a day after a coalition of western Canadian grain and oilseed shippers issued a report criticizing rail performance and suggesting that Canada’s major railway are falling to meet shippers’ demands for grain cars.
The Ag Transport Coalition said Jan. 26 that the country’s two major railways — CN and Canadian Pacific Railway — are 12,000 cars short of meeting shipper demand this crop year.
brian.cross@producer.com
