With a decline in the global coal market due to an oversupply of product, financial figures released by Ridley Terminals Inc. show what impact the drop is having for the North Coast terminal.
During the first quarter of 2015, ending March 31, Ridley Terminals experienced a net operating loss of $2.979 million compared to a net operating profit of $4.84 million in the first quarter of 2014. The $7.819 million change comes on the heels of a 49.23 per cent drop in rail unloading volumes and a 43.07 per cent drop in ship-loading volumes.
Revenue for the terminal fell by $8.11 million compared to the first quarter of 2014, with throughput revenue dropping by $8.5 million to sit at $9.962 million. The number of ships loaded at the terminal during the first quarter of 2015 was 14 compared to 20 in the first quarter of 2015 while the average vessel cargo volumes dropped 19,000 tonnes to 83,000 tonnes.
At the same time, the company reduced its operating costs by $291,000, from $14.267 million in the first three months of 2014 to $13.976 million during the same time period in 2015. While salaries, professional services, equipment operations and maintenance and utility costs created savings of $868,000, the lease payment made to the Prince Rupert Port Authority increased by $440,000. The Prince Rupert Port Authority collects payment based on coal volumes, but when that amount collected through shipping volumes falls under the minimum payment guaranteed by the agreement RTI must “top up” the payment.
According to management, the outlook for the terminal continues to be one of challenges.
“In 2014, oversupply in the overseas market for coal resulted in greater cost pressure on North American producers. This trend has continued to strengthen in 2015, with no return to previously experienced market conditions forecasted for North America in the short term,” read the report, noting the far-term picture could be brighter.
“Despite this outlook for producers, RTI remains well positioned to capture future growth as it is one of only a few Pacific west coast terminals providing terminal bulk services for the export coal market.”