Despite positive growth in 2013, Ridley Terminals Inc. (RTI) is expecting some tough years ahead.
Numbers released at the Sept. 7 Annual General Meeting show the company’s total revenue increased by $26.6 million compared to 2012 to sit at $131 million while the net operating profit increased 39 per cent year-over-year to sit at $65 million at the end of last year.
“So we do have a facility that’s improved and we do have a good bit of money in the bank, which is a good thing. We can survive heavy storms, but there’s no question that we’re in a heavy storm,” said RTI president George Dorsey.
“We don’t know how long it’s going to last. It could be two years, it could be six years, but it won’t be in the next few months that things turn around.”
The comments came just before a Central One Credit Union report was released that paints a bleak picture of the coal industry in northeastern B.C.
“B.C.’s metallurgical coal sector is showing signs of buckling as persistent softness in the global economy, particularly in Asian markets, has continued to drive prices lower and made local mines uneconomical. Coking coal prices (Australian FOB) have fallen to six-year lows … the consensus coal price forecast is for the benchmark to reach about $132/tonne (USD) this year – in comparison, the value was above $300 in 2011,” Central One wrote in its Economic Prospects for Northeastern B.C. report.
“Prospects for a near-term turnaround in the coal sector are low. Consensus forecasts show a moderate rebound in price over the next few years, but levels are not expected to return to 2013 levels until about 2018. Higher metallurgical coal production requires higher demand for steel, which ultimately reflects a stronger demand cycle in emerging market economies. Long-term demand is expected to strengthen due to economic growth of emerging markets and particularly China, but prospects for an aggressive medium-term growth cycle are dim. Challenges to growth persist with a sluggish European economy and a focus by China on re-orienting its economy towards domestic consumption rather than industrial export-led growth.”
As well as outlining some of the positive things the terminal has accomplished recently, including the replacement of aging heavy duty equipment and the installation of a third stacker-reclaimer, Dorsey briefly touched upon the government’s intention to sell the terminal. However, much of that remains a mystery.
“It’s a little confusing. It was announced a couple of years ago, but the sale process has been slow to take on momentum,” he said at the meeting.
“Government has promised clarity on that and we’ll have to see how that works out.”