News Content

CN profits up 12pc as revenues rise 4pc, though sales off in Q4

THE Canadian National Railway (CN) posted 12 per cent year-on-year net profit increase in 2015 to C$3.53 billion (US$2.49 billion) drawn on revenues of C$12.61 billion, which increased four per cent.

Fourth quarter profits increased 11 per cent to C$941 million, drawn on revenues of C$3.16 billion, down one per cent.

Carloadings declined two per cent, and revenue ton-miles decreased three per cent. The operating ratio for 2015 improved by 3.7 points to 58.2 per cent, said a company statement.

"CN generated strong fourth-quarter and full-year 2015 results despite the weak volume environment," said CN president and CEO Claude Mongeau.

Looking to the coming year, Mr Mongeau said: "For 2016, the company expects to deliver mid-single digit growth. CN will continue to invest in the safety and efficiency of its network, with a 2016 capital investment programme of C$2.9 billion, including the negative impact of foreign exchange and increased spending for Positive Train Control technology.

"Given CN's strong balance sheet and solid financial prospects, I am pleased to announce that the company's board of directors today approved a 20 per cent increase in CN's 2016 quarterly common-share dividend," said Mr Mongeau.

"CN has increased its dividend per share by 17 per cent per year on average since its privatisation in 1995 and continues to move towards a target payout ratio of 35 per cent," he said.

Fourth quarter revenues increased for automotive (13 per cent), forest products (12 per cent), intermodal (five per cent), and grain and fertilisers (one per cent). Revenues declined for metals and minerals (21 per cent), coal (16 per cent), and petroleum and chemicals (four per cent).

The decrease in quarterly revenues was mainly attributable to reduced shipments of energy-related commodities due to a reduction in oil and gas activities, lower volumes of semi-finished steel products and short-haul iron ore, decreased shipments of coal due to weaker North American and global demand, and lower US grain exports via the Gulf of Mexico, CN said.