Higher grain revenue on Canada’s Prairies helped lead to record full-year revenues and offset a lower fourth-quarter gross for Canadian Pacific Railway (CP), as the company warned of substantial job cuts ahead.
The railway on Thursday reported overall net income of $1.352 billion on record revenue of $6.712 billion for 2015, down from $1.476 billion on $6.62 billion in fiscal 2014. For its fourth quarter ending Dec. 31, CP booked $319 million in profit on $1.687 billion in revenue, down from $451 million on $1.76 billion in the year-earlier period.
CEO Hunter Harrison noted the company also posted a “record-low” full-year operating ratio of 60 per cent, for which he credited the company’s “committed, hard-working employees across the network.”
Against “challenging” economic conditions and lower commodity prices, he said, “we continue to focus on what we can control — lowering costs, creating efficiencies and improving service.”
Calgary-based CP on Thursday reported moving about 285,000 carloads of Canadian grain in fiscal 2015, down from 291,000 in 2014. Of that grain handle, about 80,000 carloads were moved in 2015’s Q4, up from 75,000 in the year-earlier period.
Despite the lower handle, CP booked Canadian grain revenue of $1.068 billion for the year (up from $988 million in 2014) for revenue per carload of $3,750, up 11 per cent. For its 2015 Q4, CP reported Canadian grain revenue of $296 million (up from $267 million in the 2014 Q4) for revenue per carload of $3,707, up four per cent.
Among its other sectors, CP reported revenue per carload of $3,326 on U.S. grain for 2015, up 14 per cent from 2014, though U.S. grain carloads for the year were down nine per cent at 157,000.
In the fertilizers and sulphur sector, CP moved 62,000 carloads in 2015, up five per cent, for revenue per carload of $4,410, up 16 per cent. In its potash sector, CP moved 124,000 carloads in 2015, up five per cent, while revenue per carload was down two per cent at $2,887.
The Reuters news service on Thursday reported CP’s separate announcement that it will press forward with plans to streamline operations and cut back its workforce in 2016 by nearly 1,000 people, or about seven per cent.
“This is a story of recognizing up front the things that you cannot control, which is the economy, and then doing something about those that you can, like your operating performance,” Reuters quoted CP chief operating officer Keith Creel as saying on Thursday’s conference call.
Unifor, the union representing maintenance and mechanical staff at CP, described the cuts as “regrettable” given the company’s profits and revenue.
“Last year they eliminated 1,800 staff; now they’re putting another 1,000 out of work despite the fact that they brought in $1.35 billion in net income in 2015,” Brian Stevens, Unifor’s national rail director, said Thursday in a separate release.
Unifor quoted Transport Canada as issuing an order to CP last week citing working conditions for train crews that “create excessive fatigue” and seeking changes to practices that pose “an immediate threat to safe railway operations.”
CP managers, Stevens said, “were told that some of their crews were being worked to the point of exhaustion and now they plan further staff reductions?” — AGCanada.com Network