The first quarter of 2018 showed income decreases across the board for CN Rail, paired with increased operating expenses — but several weeks into the second quarter, volumes are on their way up.
At a transportation conference on May 15, chief financial officer Ghislain Houle said that volumes are up 14 per cent this month.
Part of the increase in productivity is due to expansions at the Port of Prince Rupert, which CN Rail said is expected to hit capacity two years ahead of schedule. CN’s intermodal trade, in particular, increased by $72 million in the first quarter compared to the same time the year before. The quarterly review names the Port of Prince Rupert as one of the sites responsible for the higher volume of international container traffic.
In the first quarter, the net income went down by 16 per cent from the same time in 2017. Meanwhile, operation costs increased by nine per cent. The company’s free cash flow dropped from $848 million to $322 million between the first quarter of 2017 and that of 2018. Revenue for grain and fertilizers decreased the most, by 11 per cent.
In the first quarter review, the interim president CEO Jean-Jacques Ruest, called it a “difficult quarter and winter” before adding that CN Rail will invest $400 million in new track infrastructure, in Western Canada especially.
The poor first quarter results were precedented by CN Rail’s apology to grain customers after the immediate resignation of the company’s CEO in March. In Prince Rupert, grain shipments were cancelled by thousands of tonnes worth of product.