Grain and fertilizer traffic, along with the company’s improved handle in most of its other market segments, helped push Canadian National Railway (CN) to higher third-quarter profits, the railway reported Tuesday.
Montreal-based CN’s CEO, Claude Mongeau, said in a release that the company’s results for its Q3, ending Sept. 30, show the dividends coming from its recent “supply chain” initiatives.
“Since the beginning of the year, we’ve innovated on a number of fronts, ranging from scheduled grain service in Western Canada, to collaboration agreements with Canada’s major ports and level of service pacts with terminal operators, to a new end-to-end supply chain focus on Western Canada export coal traffic,” Mongeau said.
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Higher freight volumes in “almost all markets” spoke to a continued recovery in North America’s and the world’s economies, the company said.
Among the “encouraging signs,” Mongeau said, “during the first nine months of 2010, Canadian grain volumes approached a level not seen since the 1996-97 Canadian bumper crop year.”
The company reported handling 133,000 carloads of grain and fertilizers in its Q3, up 10 per cent from 121,000 in the year-earlier period. Total Q3 grain revenue was $318 million, up seven per cent from $298 million in the year-earlier quarter.
That translates to a three per cent decrease in revenue per carload for grains and fertilizers, down to $2,391 — and to a four per cent increase in revenue ton-miles (a measurement of the relative weight and distance of rail freight) for the sector, to 9.29 billion.
Overall, CN’s net profit for the quarter stood at $556 million on $2.12 billion in revenues, up from $461 million on $1.85 billion in the year-earlier period.
The 15 per cent rise in CN’s Q3 revenues overall mainly resulted from significantly higher freight volumes in almost all markets, as a result of improving economic conditions in North America and globally, the company said, also citing its recent freight rate increases.
CN also cited the impact of a higher fuel surcharge, levied due to year-over-year increases in fuel prices and higher volumes. Partly offsetting those higher numbers was the negative impact of a stronger Canadian dollar on U.S.-dollar-denominated revenues.
By market segment, CN reported rising revenues for coal (28 per cent), metals and minerals (24 per cent), automotive (22 per cent), intermodal (19 per cent), petroleum and chemicals (10 per cent) and forest products (four per cent).
