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Canadian National Railway quarterly profit up 4.6pc on flat revenue

THE Canadian National Railway (CN) posted a 4.6 per cent year-on-year second quarter net profit increase to C$886 million (US$681 million) drawn on flat revenues of C$3.1 billion.

Revenues increased for automotive (17 per cent), forest products (eight per cent), petroleum and chemicals (four per cent), and intermodal (two per cent), said a company statement.

But they declined for metals and minerals (five per cent), grain and fertilisers (seven per cent), and coal (26 per cent), said Montreal-based CN.

Revenue performance was mainly attributable to the positive translation impact of the weaker Canadian dollar on US dollar denominated revenues.

Also contributing were freight rate increases and strong overseas intermodal demand and higher volumes of finished vehicle traffic, said the company.

But these factors were almost entirely offset by a lower applicable fuel surcharge rate, lower volumes of Canadian grain versus the prior year's record crop, the company said.

Also on the downside, there were decreased shipments of coal due to weaker global demand; reduced shipments of energy-related commodities, including crude oil, frac sand, and drilling pipe; as well as lower volumes of semi-finished steel products and iron ore.

Carloadings for the quarter declined three per cent to 1.4 million, CN said.

Nonetheless, CN president and CEO Claude Mongeau said: "I'm proud of our very solid second quarter results, driven by the team's swift action to recalibrate resources and double-down on efficiency, while continuing to improve customer service.

"We're focused on our long-term agenda and investing C$2.7 billion in CN's capital programme this year to support it, with an emphasis on the integrity and safety of the network," Mr Mongeau said.