BC Ferries Releases Second Quarter Results

Press Release

VICTORIA –BC Ferries released its second quarter results today for the three months ended September 30, 2018.

The company’s net earnings for the second quarter of fiscal 2019 were $90.9 million, compared to net earnings of $98.4 million for the same quarter of the previous year. Year-to-date, net earnings were $96.9 million, $18.9 million lower than in the same period in the prior year. The decrease in net earnings is primarily due to initiatives that reduced fares as well as the addition of more sailings to meet customer demand at popular sailing times which increased operating expenses.

Due to the seasonality of ferry travel, net earnings in the first and second quarters are typically reduced by net losses in the last two quarters of the fiscal year when routine vessel maintenance is scheduled.

On April 1, 2018, BC Ferries applied a fare reduction of 15 per cent on all but the three Metro Vancouver – Vancouver Island routes, where fares were held constant. The B.C. seniors’ passenger discount was increased from 50 per cent to 100 per cent for travel Monday to Thursday. BC Ferries and the Province are funding these fare initiatives over two years.

“To provide our customers with the service they expect from BC Ferries, we added sailings where possible on a variety of routes and extended schedules to meet demand,” said Mark Collins, BC Ferries’ President and CEO. “BC Ferries provided 288 (640 year-to-date) additional round trips compared to the same time last year throughout the system and adjusted the schedules for the routes operating out of Horseshoe Bay terminal,” added Collins.

Operating expenses increased by $13.9 million to $ 211.2 million in the quarter, compared to the same period in the prior year mainly due to the cost of additional sailings, schedule adjustments, and the introduction of the new direct route between Port Hardy and Bella Coola, which resulted in additional costs for labour, fuel consumption and training. In addition, depreciation and amortization increased reflecting new capital assets that have entered service.

Revenues were $315.8 million in the quarter, which was a $5.8 million increase compared to the same period in the prior year, primarily as a result of increased traffic and the increase in ferry service fees related to the April 1, 2018 fare initiatives.

Capital expenditures in the three and six months ended September 30, 2018 totalled

$54.0 million and $126.8 million respectively. Significant investments include the Spirit Class mid-life upgrades, the Northern Sea Wolf and terminal modifications, as well as the new Island Class vessels currently under construction.

On September 28, 2018, BC Ferries filed its Performance Term Five Submission to the independent British Columbia Ferries Commissioner. The purpose of the Performance Term Five Submission is to provide information to assist the Commissioner establish price caps for all regulated routes as specified in the Coastal Ferry Services Contract between BC Ferries and the Province of British Columbia for the period April 1, 2020 – March 31, 2024. One of the key elements of the submission is the company’s 12-Year Capital Plan, which details plans to invest more than $3.9 billion, making it the largest capital plan in BC Ferries’ history.

“Our capital plan will help to ensure a sustainable, future-ready, efficient marine transportation system, while delivering an exceptional and affordable customer-focused travel experience,” said Collins. “In developing our plan, we recognize that decisions we make today must consider the way people will travel tomorrow. We are planning for a more resilient ferry service that takes into account the energy transition to a lower carbon future and that can address customers’ interests in the areas of reliability, affordability and choice.”

The plan will leverage the company’s current strong financial position by upgrading the fleet and terminals, introducing alternative energy sources, and investing heavily in its Fleet Maintenance Facility. BC Ferries will standardize its assets, improve interoperability and address growing demand in a sustainable and ecological manner.

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.

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Media Contact:

BC Ferries, Media Relations
Victoria: (250) 978-1267

Customer Contact:

Victoria: (250) 386-3431
Toll-free: 1-888-BCFERRY (1-888-223-3779)

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