CN on pace for record grain handlings in 2018-19

Revenues at Canadian National Railway were up 10 percent in 2018 as the company reported strong fourth quarter volumes of grain, crude oil, intermodal cargoes and other commodities.

Full year revenues at Canada’s largest railway company were reported at $14.3 billion in 2018, up from $13 billion the previous year.

In the three-month period ending Dec. 31, CN reported revenues of $3.8 billion, up 16 percent or nearly $500 million from the same period in 2017.

“I’m very pleased with our fourth quarter results and the strong finish to 2018,” said CN president J.J. Ruest.

“With approximately $1.3 billion of revenue growth in the final three quarters of the year, CN regained its position of strength and demonstrated again its ability to grow at low incremental cost. 2019 will be a year of building on this momentum.”

In a Jan. 29 conference call with investors, Ruest said fourth quarter revenues from Canadian grain haulings increased 17 percent, while Canadian grain volumes in the quarter increased 14 percent.

So far in the 2018-19 crop year, CN’s Canadian grain export volumes are 1.5 million tonnes ahead of the previous year’s pace, an all-time record for the company, he added.

On crude, the company moved an average of 230,000 barrels a day in the fourth quarter of 2018, up from about 130,000 barrels in the previous quarter.

“Looking forward to 2019, we have a good start to the year and we’re aiming for high single digit volume growth this year as measured in RTMs (revenue tonne miles),” Ruest said.

Added chief financial officer Ghislain Houle: “The demand environment remains strong in a number of different sectors and we continue to see a broadly positive backdrop in North America.”

CN executives said the company’s 2019 capital expenditure program has been set at around $3.9 billion, in the same range as 2018.

About $300 million of that will be spent on two major infrastructure projects in the Vancouver area.

The company also announced an 18 percent increase in shareholder dividends in 2019, as well as a new share buy-back program that will see the company purchase as many 22 million shares at an estimated total cost of $1.7 billion.

The buyback program will take place between Feb. 1, 2019, and Jan. 31, 2020.

CN’s full year adjusted net earnings in 2018 were listed at $4.056 billion, up from $3.778 billion in 2017.

Contact brian.cross@producer.com

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