Montréal, Québec, March 17, 2017 – Logistec Corporation [TSX: LGT.A and LGT.B], a marine and environmental services provider, today announced its financial results for the fourth quarter and the year ended December 31, 2016.
Consolidated revenue totalled $343.3 million in 2016, a decrease of $14.7 million or 4.1% over 2015. Revenue was affected by the increase in the U.S. dollar against the Canadian dollar. For the year, the positive impact on revenue was $3.1 million.
The marine services segment posted revenue of $186.0 million in 2016, representing lower sales compared with the $206.5 million reported in 2015. The decrease was mostly due to lower bulk activity. The environmental services segment delivered a good performance in 2016, as revenue increased by $5.8 million or 3.9% over 2015 to reach $157.3 million. Revenue growth came primarily from increased activity in site remediation and Aqua-Pipe in the USA, partially offset by reduced Aqua-Pipe installation in Canada.
In 2016, Logistec achieved a consolidated profit for the year of $18.5 million, of which $18.9 million was attributable to owners of the Company. This is lower than the 2015 consolidated profit of $32.9 million, of which $29.1 million was attributable to owners of the Company. This decline stemmed largely from lower cargo handling volumes for the marine services segment. The environmental services segment was also less profitable due to significantly lower sales in Aqua-Pipe installation services. The 2016 profit attributable to owners of the Company computes to total diluted earnings per share of $1.48, which corresponds to $1.41 attributable to Class A Common Shares and $1.56 attributable to Class B Subordinate Voting Shares. This compares to $2.34 in 2015, of which $2.25 was attributable to Class A Common Shares and $2.47 was attributable to Class B Subordinate Voting Shares.
During the fourth quarter of 2016, consolidated revenue totalled $95.7 million, up by $3.3 million over the same period of 2015. This increase is explained mainly by strong activity in the environmental services segment. The profit attributable to owners of the Company rose to $8.9 million ($7.9 million in 2015) for total diluted earnings per share of $0.71, of which $0.68 was attributable to Class A Common Shares and $0.74 was attributable to Class B Subordinate Voting Shares. For the same period of 2015, diluted earnings per share totalled $0.63, of which $0.61 was attributable to Class A Common Shares and $0.67 was attributable to Class B Subordinate Voting Shares.
“Our development plan for cargo handling is focused on strengthening and growing our network of facilities in North America. Over the last few years, we have succeeded in growing organically by targeting very specific growth markets, namely mining, biomass and port logistics.
Unfortunately, with the significant drop in commodity prices, the landscape for mining development has been negatively affected and is just beginning to recover. The turnaround is expected to be gradual, and we should see development opportunities in the coming years. On a brighter note, we recently received a new concession for the handling of bulk at the Port of Cleveland (OH), where we expect to handle some 3-4 million tonnes of iron ore and other bulk cargoes on an annual basis.
In biomass, we have rebuilt our facilities damaged by the fire in Brunswick (GA) and can now get back to our growth plan. We will immediately resume handling of all outbound movements for our main long-term customer, with the capacity to also seek new ones.
In our container business, our growth will be concentrated on Montréal (QC), where we inaugurated our new Viau terminal in late 2016. The first phase of this facility has a capacity of 350,000 TEUs, and an additional 250,000 TEUs will be developed in line with demand growth. This new terminal will provide our joint venture Termont with a total capacity of 1.1 million TEUs at the Port of Montréal (QC).
Given the more difficult economic environment for the industries we serve, we turned our energy to identifying potential acquisition opportunities. We were pleased to add Logistec Gulf Coast LLC to our family in early 2017. This newly formed company, in which we have a 70% interest, acquired the assets of Gulf Coast Bulk Equipment, Inc. It operates two terminal concessions out of the ports of Tampa (FL) and Port Manatee (FL). It also offers stevedoring services to bulk cargo importers and exporters in various terminals in the U.S. Southeast and Gulf of Mexico region, including Texas, Florida, Louisiana and along the Mississippi River.
Sanexen enjoys a strong position in its three main markets. In site remediation, our traditional market, we are unquestionably the number one player in Eastern Canada. In 2016, we not only completed the site remediation of a former aluminium smelter in Shawinigan (QC) and the environmental dredging of Sandy Beach (QC) in Gaspésie, but also continued the decontamination of part of a refinery site in Varennes (QC), disposed of contaminated soil from the Turcot Interchange and Champlain Bridge construction sites in Montréal (QC), and carried out many other projects.
As for water main rehabilitation, despite the downturn observed in Québec, the market remained robust in Ontario, and we continued to advance our penetration in the U.S. market. On a global level, our Australian licensee experienced some setbacks, and its first installations should be performed in 2017. With regards to the manufacturing of woven hoses, Niedner had an excellent year, selling a record number of fire hoses to the U.S. Forest Service and continuing production and development of our Aqua-Pipe lining. In 2016, we acquired Excava-Tech Inc., our main subcontractor for Aqua-Pipe excavation work in Québec. This acquisition completes our vertical integration from inventor to manufacturer to installer.
As is the case for our marine services business, we will continue to pursue acquisitions to ensure our growth,” indicated Madeleine Paquin, President and Chief Executive Officer of Logistec Corporation.
“Overall, we are committed and confident that we can continue to build our business based on our specialized services and expertise. Despite the continued difficult economic environment, our service offerings, our geographic diversity, and our ability to invest in growth opportunities should allow us to continue to increase our services in both the short and long term. Clearly, our success rests on the strength of our highly dynamic team of experts who are customer oriented and consistently bring value to an expanding customer base,” concluded Madeleine Paquin.
Logistec Corporation is based in Montréal (QC) and provides specialized services to the marine community and industrial companies in the areas of bulk, break-bulk and container cargo handling in some 30 ports and 40 terminals located in eastern North America. Logistec also offers marine transportation services geared primarily to the Arctic coastal trade, short-line rail transportation services, as well as marine agency services to foreign shipowners and operators serving the Canadian market. Furthermore, the Company operates in the environmental sector where it provides services to industrial, municipal and other governmental customers for the trenchless structural rehabilitation of underground water mains, regulated materials management, site remediation, risk assessment, and manufacturing of woven hoses.
The Company has been profitable and has paid regular dividends since becoming public and payments have grown steadily over the years. A public company since 1969, Logistec’s shares are listed on the Toronto Stock Exchange under the ticker symbols LGT.A and LGT.B. More information can be obtained on the Company’s website at www.logistec.com.
For the purpose of informing shareholders and potential investors about the Company’s prospects, sections of this document may contain forward-looking statements, within the meaning of securities legislation, about the Company’s activities, performance and financial situation and, in particular, hopes for the success of the Company’s efforts in the development and growth of its business. These forward-looking statements express, as of the date of this document, the estimates, predictions, projections, expectations or opinions of the Company about future events or results. Although the Company believes that the expectations produced by these forward-looking statements are founded on valid and reasonable bases and assumptions, these forward-looking statements are inherently subject to important uncertainties and contingencies, many of which are beyond the Company’s control, such that the Company’s performance may differ significantly from the predicted performance expressed or presented in such forward-looking statements. The important risks and uncertainties that may cause the actual results and future events to differ significantly from the expectations currently expressed are examined under “Business Risks” in the Company’s annual report and include (but are not limited to) the performances of domestic and international economies and their effect on shipping volumes, weather conditions, labour relations, pricing and competitors’ marketing activities. The reader of this document is thus cautioned not to place undue reliance on these forward-looking statements. The Company undertakes no obligation to update or revise these forward-looking statements, except as required by law.