After a year of hardship in a declining world coal market, Ridley Terminals Inc. (RTI) reported it recorded a net operating loss of $17.06 million in 2015.
RTI made the announcement during the release of its 2015 annual report last Thursday at the crown corporation’s annual public meeting, held at the North Coast Convention Centre.
The past couple years were bleak, but the future remains optimistic, said interim president and chief operating officer David Kirsop last week.
“We’ve certainly had better years and it’s certainly been a challenging year. For those of us that follow the markets with respect to coal, you will know that we anticipate the recovery to be slow,” he said.
“There are some bright lights and there are some moments of hope.”
An over-saturation of supply in the world’s coal and a decrease in demand and prices led to a second straight year of decreased volumes shipped out of RTI.
Rail unloading volumes fell 38.22 per cent, or 2,639,000 tonnes compared to 2014 and ship-loading volumes dropped 35.94 per cent, or 2,487,000 tonnes.
Mine closures and bankruptcy filings affected a number of RTI customers, and the company itself was hit with an impairment charge (non-cash) of coal assets of $99,495,000.
“When you buy assets, they go on your books for the cost you paid for them and it depreciates throughout their life,” explained Ryan Staschuk, manager of business development and finance.
“A lot of work that we did with our site expansion in prior years – a significant amount of money, $250 million – put into the site, because that relates directly to the coal assets, those coal assets seem to derive less value to our company in future years over the life of those assets … We expect in the future when coal markets return and you get the right projections, it’ll have the opposite effect and come right back, but there’s no impact to cash or comprehensive.”
Not including that impairment charge, or “revenue recognized on relinquished site capacity reservations” of $49,050,000, the total comprehensive loss for Ridley Terminals fell to $12,942,000 after posting a comprehensive income of $6,031,000 in 2014, for a decrease of $18,973,000 since 2014.
Michelle Bryant-Gravelle, corporate affairs manager for RTI, confirmed to The Northern View that the total net operating loss for 2015, which does not take into account the impairment charge or relinquished site capacity, was $17,060,000.
Diversification was the main message conveyed by management in three different areas: clients, product lines and a mixture of product line diversity for a more sustainable model.
The company is working to help AltaGas make a positive final investment decision on a propane export terminal on Ridley Island by Q4 2016 and confirmed they are in negotiation with other bodies to help diversify the terminal’s offerings, though no timelines or product names could be shared.
Current assets at RTI fell from $122.5 million in 2014 to $110.3 million in 2015, while total assets fell from $405.9 million to $305.1 million. Total liabilities also fell from $139.6 million to $102.1 million. Shareholder’s equity stands at $203 million from 2014’s $266.4 million.
Both Interim Chair Byng Giraud and Kirsop recognized the fact that Ridley’s biggest asset was its port and rail access.
“The advantage of Ridley is not its coal, the advantage of Ridley is it’s a port that can handle bulk items on the coast. And we are running out of places on the coast that has rail access that can do this. It’s so hard to build almost anything in the U.S. anymore because of environmental opposition. The opportunities are huge here, but we’re living in an economy that’s tight,” said Giraud.
“I would say our biggest asset is our dock,” agreed Kirsop.
RTI came in third out of North American terminals involved in the Green Marine program monitoring companies’ environmental footprints. The corporation also distributed $189,435 in community donations and the RTI employee fund donated $59,065 to community causes. Over the last five years, RTI has contributed $2,117,281 to community investment.