CP pulls more grain for less in first quarter

Canadian Pacific Railway (CP) hauled more carloads of Canadian grain in its first quarter of 2016 compared to the same period last year — but for less revenue per car.

Calgary-based CP on Wednesday reported overall net income of $540 million on revenues of $1.591 billion for its quarter ending March 31, up from $320 million on $1.665 billion in the year-earlier period.

The company also posted a record-best operating ratio (OR) of 58.9 per cent, which it described as its lowest ever compared to adjusted ORs in previous quarters, and down from 63.2 per cent in the year-earlier period.

The OR, a ratio of operating expenses to net sales, is cited within business sectors as a measure of a specific company’s relative efficiency in that sector.

“Despite weakness in the economy and volume headwinds, we focused on what we can control — our costs and our commitment to providing reliable service — and delivered a record performance,” CP CEO Hunter Harrison said in a release.

The company, he said, reamins “optimistic in our outlook given signs of stabilization within the Canadian economy and in key global markets.”

CP in its first quarter of 2016 moved 66,000 carloads of Canadian grain, up from 61,000 in the year-earlier period. Canadian grain yielded $254 million in gross revenue, down from $256 million, and revenue per carload of $3,861, down from $4,214 in the year-earlier period.

By comparison, CP moved 34,000 carloads of U.S. grain in the same quarter, down from 40,000 in the year-earlier period, for revenue per carload of C$3,272, down from $3,408.

CP’s Q1 potash handle was 27,000 cars, down 13 per cent, for revenue per carload of $3,064, up one per cent. In its fertilizers and sulphur sector, CP moved 16,000 carloads, down six per cent, for revenue per carload of $4,993, up 17 per cent.

CP’s Q1 revenues also included a before-tax gain of $50 million on last month’s sale of its Arbutus Corridor to the City of Vancouver.

CP said its $55 million deal with the city will allow the railway to “share in future proceeds on the eventual development and/ or sale of certain parcels” of the corridor.

The city plans to develop the space — roughly 42 acres running about nine km from Vancouver’s Milton Street to First Avenue — into what it calls the “Arbutus Greenway” for pedestrians and cyclists. — AGCanada.com Network