Canadian National Railway has reported that revenue during the first part of this year has remained flat after recovering from numerous issues in February.
In its first-quarter fiscal update on April 27, CN said it generated roughly $3.55 billion in total revenue, while showing improvements in other financial metrics.
JJ Ruest, president and chief executive officer of CN, said in a news release that railroaders have managed to keep the economy moving while overcoming difficult situations.
He said the company recovered quickly in March following disruptions to service in February. The company had experienced blockades by protesters, bad weather and a strike earlier this year.
With the COVID-19 pandemic, Ruest said CN is adjusting its resources to match weaker demand.
The company remains committed to technological innovation and investing in capacity, he added.
The pandemic has caused CN to revise its 2020 financial outlook. It is withdrawing its three-year targets.
It said demand for transportation services are correlated with the duration of containment measures, which have caused some businesses to close and consumers to stay home.
The impacts of these measures remain uncertain, CN said.
Despite the unpredictability, the company said it’s working to generate a minimum of roughly $2.5 billion of free cash flow. The company will maintain its dividend increase of seven percent this year.
In 2020, CN said it now plans to invest about $2.9 billion in its capital program. Of that, $1.6 billion will go toward track and railway infrastructure maintenance.
With revenue, CN said the inclusion of TransX within the domestic market, freight rate increases, higher volumes of petroleum crude, and increased shipments of Canadian grain were offset by lower volumes across all other commodity groups.
It said operating expenses for the first quarter fell by five percent to $2.3 billion. Labour and fuel costs, as well as depreciation expenses, were lower.
In the first quarter, CN brought in $610 million in revenue from grain and fertilizers, a six percent increase from $577 million during the same time last year.
It did 150,000 carloads of grain and fertilizers in the first quarter of 2020, a one percent increase from 149,000 in the first quarter of 2019.