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Long good-bye for Harrison as CP Q2 profit falls 16pc and sales drop 12pc

THE Canadian Pacific Railway (CP) posted a 16 per cent second quarter net profit decline to C$328 million (US$251 million), drawn on revenues of C$1.45 billion, which fell 12.1 per cent.

"Revenue challenges in the second quarter, as noted in our quarterly outlook release last month, included lower-than-anticipated bulk volumes, devastating wildfires in northern Alberta and a strengthening Canadian dollar," said retiring CP chief executive Hunter Harrison.

"Despite these challenges, our team of dedicated railroaders continues to perform and their hard work and focus on service, safety and controlling costs, positions CP well for the rest of the year," he said.

"Our business model provides the flexibility and capacity to take advantage of changing market conditions - as volumes increase, we are well-equipped and ready to respond accordingly," he said.

Mr Harrison, 72, will continue as CEO until July 1 next year, CP said in separate release, He will be replaced by sitting president and chief operating officer Keith Creel, 57.

Top executive changes have also come to CP's arch rival, the Canadian National Railway (CN) where its president and CEO Claude Mongeau, 54, announced in June that he was stepping down having stricken with throat cancer, He has since been succeeded by Luc Jobin, 57, the company's chief financial officer.

Mr Mongeau joined CN 22 years ago, was CN's chief financial officer for 11 years, and its CEO for the last six and a half years.

Mr Creel, like Mr Hunter, was a former CN top executive, before started starting with CP in 2013 and later seated at the board in 2015.

"Keith is a tremendous railroader who is more than ready to take the helm as our next CEO," said CP chairman Andrew Reardon. "Since joining the company in 2013, Keith has continued to demonstrate to the CP board and all of our stakeholders his considerable leadership abilities and capacity to lead this organisation into the future."

Said Mr Harrison: "I have known and worked with Keith for more than 20 years. He is one of the strongest operating executives I have ever met in this business and I know he will do a fantastic job leading CP after my retirement."

The railway's board also reached an agreement with Mr Harrison that will see the 50-year railway veteran stay with CP in an advisory role for three years following his retirement.

Said Mr Reardon: "We are absolutely thrilled that Hunter has agreed to continue in a supporting advisory capacity after he retires at the end of June 2017. Having the greatest railroader in history available to the organisation and the board brings countless benefits."