TORONTO: January 26, 2016. The Canadian National railway (CN) has reported fourth quarter net income of C$941 million on revenue of C$3.16 billion, down one percent on the same period in 2014.
The company also reported its results for 2015 with a 12 percent increase in net income to C$3.5 billion on a four percent increase in revenue of C$12.6 billion.
Free cash flow rose to a record C$2.4 billion from C$2.2 billion the previous year.
President and CEO Claude Mongeau said: "CN generated strong fourth-quarter and full-year 2015 results despite the weak volume environment. Our solid performance is testament to the strength of CN's franchise and diversified portfolio of businesses.”
Commenting on the outlook for 2016 he added: "Although the economic environment remains challenging, CN will continue to invest in the safety and efficiency of its network, with a 2016 capital investment program of approximately C$2.9 billion, including the negative impact of foreign exchange and increased spending for Positive Train Control technology.”
CN said it increased revenues last year from the automotive sector (16 percent), forest products (13 percent), intermodal (five percent), grain and fertilizers (four percent), and petroleum and chemicals (four percent). Revenues from coal shipments fell 17 percent and metals and minerals three percent during the period.
The rail company said it attributed the increases to the Can$/US$ exchange rate, rising freight rates, “solid” overseas intermodal demand, higher volumes of finished vehicle traffic, and increased shipments of lumber and panels to U.S. markets.
The revenue growth was partially offset by a lower applicable fuel surcharge rate; and decreased shipments of energy-related commodities including crude oil, fracking and drilling pipe, lower volumes of semi-finished steel products and short-haul iron ore, reduced shipments of coal due to weaker North American and global demand, as well as lower U.S. grain exports via the Gulf of Mexico.
Earlier this week CN applied to the Canadian Transportation Agency (CTA) to approve a C$250 million logistics hub to be built in Milton, Ontario. CN said with its intermodal traffic growing solidly since 2005, the terminal would create more inland freight capacity to better connect domestic and global supply chains linking the West and East coasts in Canada.