BC Ferries Releases Second Quarter Results

Vehicle traffic levels highest company has experienced

VICTORIA, BC, Nov. 19, 2021 /CNW/ - BC Ferries released its second quarter results today for the three and six months ended September 30, 2021. Vehicle traffic returned to the ferry system in record numbers this summer with pent up demand from the domestic market for seasonal holidays and recreational travel once Provincial Health Officer COVID-19 travel restrictions were lifted.

In the three months ended September 30, 2021, BC Ferries carried 7.0 million passengers and 3.0 million vehicles, an increase of 28 per cent and 20 per cent respectively, compared to the same period in the prior year. When comparing the three months ended September 30, 2021 to the same period in 2019, a pre-COVID-19 time, passenger traffic decreased nine per cent, while vehicle traffic increased by three per cent, representing the highest vehicle traffic levels BC Ferries has experienced in any quarter.

New fare choices, including advance purchase Saver fares, were launched on the three Metro Vancouver - Vancouver Island routes late in fiscal 2021. During the second quarter, after Provincial Health Officer COVID-19 travel restrictions were lifted, these new fare choices contributed to increased vehicle traffic on traditionally lower utilized sailings, less sailing waits overall, and enabled 
BC Ferries to safely carry higher overall levels of vehicle traffic than in previous summer seasons.

"We were pleased to see strong traffic levels this quarter, but we remain cautious about what the future will bring," said Mark Collins, BC Ferries' President and CEO. "Summer is our high season so it's challenging to predict with any certainty when conditions will return to pre-pandemic levels for the longer-term."

BC Ferries' net earnings for the second quarter of fiscal 2022 were $79.9 million, $42.1 million higher than the same quarter the previous year. Year-to-date since April 1, 2021, net earnings were $84.6 million, compared to net losses of $24.2 million in the prior year.

Revenue for the quarter ended September 30, 2021, at $316.8 million, was up $69.2 million over the same period in the prior year. Year-to-date since April 1, 2021, revenue was $546.0 million, up $161.0 million over the same period in the prior year.

During the three months ended September 30, 2021, expenses from operations increased by $28.0 million or 14.3 per cent to $223.3 million compared to the same period in the prior year. Year-to-date since April 1, 2021, expenses from operations increased $55.1 million or 14.5 per cent to
$434.1 million, mainly due to staffing level changes and greater fuel consumption for a higher number of round trips provided, as well as increases in traffic control and security costs.

In December 2020, BC Ferries received $308 million through the Safe Restart Program, a federal-provincial initiative intended to help provinces and territories safely restart their economies. The goals of the federal-provincial Safe Restart Program are to mitigate the impact of revenue losses and COVID-19-related spending, to help restore the level of annual earnings required to maintain service levels, and to keep fare increases to affordable levels through March 31, 2024.

Without the recognition of Safe Restart Funding of $62.8 million, revenues in the six months ended September 30, 2021, would have been $483.2 million, an increase of $98.2 million from last year while net earnings would have been $21.8 million, an improvement of $46.0 million compared to the same period in the prior year.

Capital expenditures in the three and six months ended September 30, 2021 totalled
$41.5 million and $80.2 million respectively, and included investments in new vessels, major overhauls and inspections to existing ships, hardware upgrades, marine structure upgrades and various other projects.

"Due to the seasonality of ferry travel, we usually see positive net earnings in the first half of the fiscal year, partially offset by net losses in the remainder of the year when traffic is low and routine vessel maintenance is scheduled," said Collins. "BC Ferries must continue to invest in the ferry system to ensure we have a sustainable, reliable and affordable coastal ferry service for British Columbians."

The company continues to modernize the fleet with the addition of four more battery-electric hybrid Island Class vessels and one more liquefied natural gas-fuelled Salish Class vessel which result in reduced emissions. The Island Class are battery equipped ships designed for full electric operation. The ships are fitted with hybrid technology that bridges the gap until funding and shore charging infrastructure becomes available. All five of these new vessels will enter service in 2022, and will assist BC Ferries in its transition to a lower carbon future while investing in sustainable technologies.

BC Ferries' full financial statements, including notes, and Management's Discussion and Analysis are filed on SEDAR and will be available at www.sedar.com. 

BC Ferries is one of the largest ferry operators in the world based on passengers transported annually and transportation infrastructure, and carried 13.1 million passengers and 6.7 million vehicles during the fiscal year ended March 31, 2021.  BC Ferries provides frequent year-round ferry transportation services to the west coast of Canada on 25 routes, currently supported by 35 vessels and 47 terminals, and also manages other remote routes through contracts with independent operators  

FORWARD LOOKING STATEMENTS
This news release contains certain "forward looking statements". These statements relate to future events or future performance and reflect management's expectations regarding our growth, results of operations, performance, business prospects and opportunities, and industry performance and trends. They reflect management's current internal projections, expectations or beliefs and are based on information currently available to management. Some of the market conditions and factors that have been considered in formulating the assumptions upon which forward looking statements are based include traffic, the value of the Canadian Dollar relative to the US Dollar, fuel costs, construction costs, the state of the local economy, fluctuating financial markets, demographics, tax changes, the requirements of the Coastal Ferry Services Contract, and the impact of the COVID-19 pandemic.

Examples of forward looking statements included in this release include statements with respect to: the impact of the COVID-19 pandemic, the impact of the federal-provincial Safe Restart Funding, seasonal traffic patterns, and the entering into service of the new Island and Salish class vessels.  In some cases, forward looking statements can be identified by terminology such as "may", "will", "should", "expect", "plan", "anticipate", "believe", "estimate", "predict", "potential", "continue" or the negative of these terms or other comparable terminology. A number of factors could cause actual events or results to differ materially from the results discussed in the forward looking statements. In evaluating these statements, prospective investors should specifically consider various factors including, but not limited to, the risks and uncertainties associated with: vendor non-performance, capital market access, interest rates, foreign currency, fuel price, and traffic volume fluctuations, the implementation of major capital projects, security, safety, and environmental incidents, confidential or sensitive information breaches, changes in laws, vessel repair facility limitations, economic regulatory environment changes, tax changes, and Indigenous rights and claims.

Actual results may differ materially from any forward looking statement. Although management believes that the forward looking statements contained in this release are based upon reasonable assumptions, investors cannot be assured that actual results will be consistent with these forward looking statements. These forward looking statements are made as of the date of this release, and British Columbia Ferry Services Inc. assumes no obligation to update or revise them to reflect new events or circumstances except as may be required by applicable law.

NON-IFRS MEASURES
In addition to providing measures prepared in accordance with International Financial Reporting Standards (IFRS), we present certain financial measures that do not have any standardized meanings prescribed by IFRS and therefore are unlikely to be comparable to similar measures presented by other companies. These supplemental financial measures are provided to assist readers in determining our ability to generate cash from operations and improve the comparability of our results from one period to another. We believe these measures are useful in assessing operating performance of our ongoing business on an overall basis.

SIGNIFICANT EVENTS SECOND QUARTER OF FISCAL 2022

Significant events during and subsequent to the Second Quarter of Fiscal 2022 include the following:

General

• Between June 3 and August 2, 2021, the Northern Expedition was removed from service and required extensive repairs to both of its main engines. During this period, a service recovery plan was initiated for the impacted routes sailing between Port Hardy and Prince Rupert and Prince Rupert and Haida Gwaii. This service recovery plan involved, among other things, the Northern Adventure servicing the impacted routes on a modified schedule and barge service for commercial trailers on the Prince Rupert – Haida Gwaii route. BC Ferries also added five round trip sailings between Prince Rupert and Haida Gwaii between September 11 through September 30 to provide more travel opportunities for vacation travellers and residents.
  
  
• On August 1, 2021, BC Ferries revised the fuel rebate from 1.5 per cent to 0.5 per cent on all routes, with the exception of the Northern Routes, which remain at 1.5 per cent until further notice. The previous 1.5 per cent fuel rebate had been in place on all routes since April 1, 2020.
  
  
• As of August 25, 2021, BC Ferries reinstated the mandatory mask policy to align with the directive from the Provincial Health Officer. Wearing face coverings in indoor spaces at terminals and on board vessels is now mandatory for all customers five years of age and older regardless of vaccination status. The company closely follows the COVID-19 directives and guidance provided by the Province and Transport Canada. BC Ferries continues with measures to mitigate risk including enhanced cleaning and sanitization stations.

Capital Assets

• On October 11, 2021, the last of the company's four new battery-electric hybrid Island Class vessels departed from Damen Shipyard Galati in Romania and is expected to arrive in Canada late in the third quarter of fiscal 2022. The first and second vessels arrived in Canada on July 22, 2021 and August 13, 2021, respectively and the third of four new Island Class vessels arrived in Canada on September 27, 2021. These vessels made the transatlantic journey under their own power in approximately 60 days, operating one-third of the journey using battery power, with the batteries being charged during the voyage by a diesel generator. These new Island Class vessels are scheduled to enter service in 2022. The new vessels have a capacity of up to 400 passengers and crew and approximately 47 vehicles.

SOURCE British Columbia Ferry Services Inc.

Media Contact: BC Ferries, Communications, Victoria: [phone]; Customer Contact: Victoria: [phone], Toll-free: 1-888-BCFERRY (1-888-223-3779)

Related Links

http://www.bcferries.ca