CN’s 2015 grain handle down, grain revenue up


Canadian National Railway’s (CN) fourth-quarter and full-year ledgers show lower traffic, but increased revenue, from its grain and fertilizer business in 2015, en route to record full-year earnings.

Montreal-based CN on Tuesday reported overall net income of $3.538 billion on $12.611 billion in total revenues for 2015, up from $3.167 billion on $12.134 billion for 2014, for adjusted earnings per share of $4.44, up 18 per cent.

For its fourth quarter ending Dec. 31, CN booked net income of $941 million on $3.166 billion in revenues, up from $844 million on $3.207 billion in the year-earlier period.

“I am particularly proud that CN’s team of railroaders quickly recalibrated resources to respond to weaker volumes, while protecting customer service,” CEO Claude Mongeau said in a release.

CN reported lower handles of U.S. grain on its tracks to Gulf ports in Louisiana and Alabama, as well as lower handles of energy-related commodities, steel products, iron ore and coal, compared to 2014.

The lower volumes in those sectors were offset by higher freight rates, U.S.-to-Canadian currency translations and “solid” overseas intermodal demand, the company said.

In its grain and fertilizer business, the company moved about 607,000 carloads in 2015, down five per cent from 2014. That handle included 163,000 carloads in the fourth quarter of 2015, down from 175,000 in its 2014 Q4.

However, for 2015, CN reported $2.071 billion in grain and fertilizer revenue, up from $1.986 billion in 2014, for revenue per carload of $3,412, up from $3,103.

For its 2015 Q4, the company booked $568 million in grain and fertilizer revenue, up just one per cent, for revenue per carload of $3,485, up from $3,200.

By comparison, Canadian Pacific Railway (CP), which reported its year-end results last week and announced another round of job cuts, reported its revenue per carload of Canadian grain at $3,750 for 2015, and $3,707 for the Q4. In its fertilizers and potash sectors, CP’s revenue per carload came in at $4,410 and $2,887 respectively for 2015.

CN’s quarterly reports don’t separate its figures for traffic in Canadian or U.S. grain or fertilizers.

According to the Canadian Transportation Agency, CN’s federally-regulated maximum revenue entitlement from Canadian Prairie grain for the 2014-15 crop year was $738.2 million, compared to $721.9 million for CP.

For the 2015-16 crop year, the Canadian grain crop was in line with the five-year average and the U.S. grain crop was above the five-year average, CN said.

Looking ahead, CN so far assumes both the Canadian and U.S. 2016-17 grain crops will be in line with their five-year averages.

“Although the economic environment remains challenging, CN will continue to leverage its franchise strength and industry-leading efficiency,” Mongeau said. — Network

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