Friday, November 20, 2020

COVID's impact on BC Ferries one of reduced revenues, reviews on capital spending

Lower traffic levels has brought lower revenues for
BC Ferries which released its second quarter financial review today

 BC Ferries has released their second quarter fiscal results for the period of July and September and the data continues to highlight the impact that COVID has had on travel in the province and on the  BC Ferry system in particular.

The financial date provided today noted that BC Ferries’ net earnings for the second quarter of fiscal 2021 were $37.8 million, $57.2 million lower than the same quarter of the previous year. Year-to-date, since April 1, 2020, net losses were $24.2 million, compared to net earnings of $107.2 million in the same period in the prior year, a decline of $131.4 million

Things continued to show concerning results when it comes to revenue, with totals for the quarter listed at $247.6 million as of September 30th, down $81.7 million year-over-year. 

Revenue for the six months ended September 30, 2020 was $385.0 million, down $190.7 million over the same period in the prior year. 

The financial review gave BC Ferries' President and CEO Mark Collins to make note of the 'new normal' while praising the work of the employees during the course of the pandemic period.

“COVID-19 continues to have a significant impact on the ferry system as we navigate through what is now the new normal with our employees, our customers and all British Columbians. Throughout the pandemic, our employees continue to provide lifeline service to coastal communities and I want to recognize their dedication and perseverance, which has been nothing short of inspiring.”

In the first two quarters of the fiscal year, BC Ferries has seen a decrease of 43 percent for April - June and 28.7 percent from July through September

Today's information release does not include  a breakdown between the northern routes and those of the south.

The travel opportunities were reduced significantly earlier this year as the Ferry Corporation adopted a reduced schedule and reduced capacity levels, much of those measures were reversed over the course of the summer months, though with travel restrictions in place for much of the summer, normal or anticipated travel loads had not been recorded in the North.

BC Ferries President and CEO Mark Collins

The reduced revenues will have some impact on capital spending plans, with the Ferry Corporation set to launch a review of all capital plans.

“Prior to COVID-19, our 12-year capital plan totalled $3.9 billion and included new vessels, upgrades and modifications for existing vessels, significant improvements at our fleet maintenance unit, major investments at terminals and renewal of information technology systems. Given the impact of the pandemic to our operations and financial position, we are reviewing all capital plans to identify opportunities to defer any expenditures that are not regulatory, security or safety related or operationally necessary. It’s imperative that we scrutinize everything we do to preserve the long-term sustainability of the ferry system in the public interest.”

There is some relief on the way for the Ferry Corporation, with BC Ferries to receive 308 million from the Safe Restart Funding program with the cash injection to come from the Federal and provincial governments.

For more notes on the financial themes of the day see the BC Ferries information release here.

Further background on BC Ferries service to the North Coast and Haida Gwaii can be explored through our archive page.

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