VICTORIA, BC, Aug. 18, 2022 /CNW/ - Ferries released its first quarter results today for the three months ending June 30, 2022, which shows traffic, revenue, net earnings and expenditures are all up.
In the first three months, passenger and vehicle traffic increased 74 per cent and 42 per cent respectively, compared to the same period in the prior year. This quarter marked the highest ever first quarter for vehicle traffic. When compared to the same period in fiscal 2020, a pre-COVID period, vehicle traffic is 3.8 per cent higher while passenger traffic is 6.3 per cent lower.
Revenues for the three months ending June 30, 2022 increased $35.7 million compared to the same period in the prior year, primarily as a result of higher traffic volumes and net retail sales, partially offset by lower applied Safe Restart Funding. Excluding Safe Restart Funding, revenues increased $93.2 million compared to the same period in the prior year. Net earnings for the first quarter were $7.9 million compared to $4.7 million in the same period the previous year.
Operating expenses in the quarter were $242.1 million, an increase of $31.3 million compared to the same period in 2021. This increase is mainly due to an increased number of sailings, resulting higher labour costs and fuel consumption, as well as higher fuel prices.
"We are emerging from the pandemic grateful to the federal and provincial governments for pandemic relief funding, and to BC Ferries' employees for their commitment to put safety first, operate in the public interest, and ensure ferry travel is as reliable as possible," said Jill Sharland, BC Ferries' Interim President and CEO. "Going forward, our focus remains on ensuring the well being and safety of our employees and our customers."
The company is experiencing the impact of crew shortages, which regrettably have resulted in cancellations on some routes. In the three months ended June 30, 2022, BC Ferries cancelled less than one per cent of scheduled round trips, due to crewing shortages. The company apologizes to its customers for these service interruptions and continues to take all reasonable steps to reduce the impact to the travelling public.
BC Ferries is an asset-intensive service, and the company recognizes the importance of operating in an environmentally, financially, and socially sustainable manner. Capital expenditures in this quarter totalled $26.5 million and included scheduled quarter-life upgrades to Coastal Class vessels, shoreline upgrades at the Tsawwassen terminal, information technology software and hardware upgrades, preparing the Salish Heron vessel for service, and various other projects. It is vital for BC Ferries to continue to invest in capital projects to help ensure the ferry system remains safe and reliable.
BC Ferries' full financial statements, including notes, and Management's Discussion and Analysis are filed on SEDAR and will be available at www.sedar.com.
BC Ferries is one of the largest ferry operators in the world based on passengers transported annually and transportation infrastructure, and carried 17.9 million passengers and 8.5 million vehicles during the fiscal year ended March 31, 2022.
BC Ferries provides frequent year-round ferry transportation services to the west coast of Canada on 25 routes, currently supported by 39 vessels and 47 terminals. BC Ferries also manages other remote routes through contracts with independent operators.
FORWARD LOOKING STATEMENTS
This news release contains certain "forward looking statements". These statements relate to future events or future performance and reflect management's expectations regarding our growth, results of operations, performance, business prospects and opportunities, financial and business risks, and industry performance and trends. They reflect management's current internal projections, expectations or beliefs and are based on information currently available to management. Some of the market conditions and factors that have been considered in formulating the assumptions upon which forward looking statements are based include traffic, the value of the Canadian Dollar relative to the US Dollar, inflation, interest rates, fuel costs, construction costs, and timelines, employment market the state of the economy, financial markets, demographics, the requirements of the Coastal Ferry Services Contract, and the impact of the COVID-19 pandemic.
Examples of forward looking statements included in this release include, but may not be limited to, statements with respect to capital investment projects. In some cases, forward looking statements can be identified by terminology such as "may", "will", "should", "expect", "plan", "anticipate", "believe", "estimate", "predict", "potential", "continue" or the negative of these terms or other comparable terminology. A number of factors could cause actual events or results to differ materially from the results discussed in the forward looking statements. In evaluating these statements, prospective investors should specifically consider various factors including, but not limited to, the risks and uncertainties associated with: vendor non-performance, capital market access, interest rates, foreign currency, fuel price, and traffic volume fluctuations, the implementation of major capital projects, security, safety, and environmental incidents, confidential or sensitive information breaches, changes in laws, vessel repair facility limitations, economic regulatory environment changes, tax changes, and Indigenous rights and claims.
Actual results may differ materially from any forward looking statement. Although management believes that the forward looking statements contained in this release are based upon reasonable assumptions, investors cannot be assured that actual results will be consistent with these forward looking statements. These forward looking statements are made as of the date of this release, and British Columbia Ferry Services Inc. assumes no obligation to update or revise them to reflect new events or circumstances except as may be required by applicable law.
In addition to providing measures prepared in accordance with International Financial Reporting Standards (IFRS), we present certain financial measures that do not have any standardized meanings prescribed by IFRS and therefore are unlikely to be comparable to similar measures presented by other companies. These supplemental financial measures are provided to assist readers in determining our ability to generate cash from operations and improve the comparability of our results from one period to another. We believe these measures are useful in assessing operating performance of our ongoing business on an overall basis.
SIGNIFICANT EVENTS FIRST QUARTER FISCAL 2023
Significant events during or subsequent to the first quarter of fiscal 2023 include the following:
On April 8, 2022, BC Ferries implemented average tariff increases of 2.3 per cent in accordance with the British Columbia Ferries Commissioner's Order 19-04 dated September 30, 2019 and in accordance with the Safe Restart Contribution Agreement between BC Ferries and the Province of British Columbia, dated November 11, 2020.
On April 12, 2022, BC Ferries introduced two-ship service on the Nanaimo Harbour – Gabriola Island route, providing enhanced vehicle and passenger service to these communities. This augmented service using two of the four new Island Class vessels results in increased vehicle capacity of 49 per cent over the previous service as well as increased sailing frequency to these communities.
On May 6, 2022, the Salish Heron entered service in the Southern Gulf Islands. The Salish Heron is identical to the three existing Salish Class vessels, which are dual-fuel capable, designed to run primarily on liquefied natural gas, a cleaner and lower carbon-intensity option. The vessel has the capacity to carry approximately 138 vehicles and up to 600 passengers and crew.
Effective June 1, 2022, a surcharge of 2.5 per cent was implemented on all routes due to rising fuel costs.
Effective June 24, 2022, the B.C. Ferry Authority appointed six new board members to the BC Ferry Services Inc. (BC Ferries) Board, each for a two-year term. They join five existing members on the Board. On June 29, 2022, Joy MacPhail was appointed as the Chair of the BC Ferries Board.
On July 22, 2022, the Company's Board ended Mark Collins' contract as President and Chief Executive Officer, effective immediately.
On July 22, 2022, Jill Sharland was appointed Interim President and CEO. Ms. Sharland is a senior finance and operations executive who also serves as Vice President and Chief Financial Officer of BC Ferries.
On July 28, 2022, BC Ferries and Snuneymuxw First Nation entered into a relationship protocol agreement to guide their work together going forward. The agreement is the first step in building a strong partnership between the two parties, built on mutual respect, recognition, mutual benefit and cooperation. There are four BC Ferry terminals currently operating in the Snuneymuxw territory.
On August 1, 2022, BC Ferries provided complimentary ferry travel on the route servicing Penelakut Island – Thetis Island – Chemainus, in support of the Spune'luxutth' March for the Children of the Residential Schools. BC Ferries continues to stand with all Indigenous people, families, communities and residential school survivors who have suffered significant trauma throughout Canada's history and a number of BC Ferries' employees participated in the walk.
SOURCE British Columbia Ferry Services Inc.
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