BC Ferries released its year-end results on June 11 with consolidated net earnings of $28.8 million for fiscal 2020, compared to consolidated net earnings of $52.2 million for fiscal 2019.
The company is facing an unprecedented drop in vehicle and passenger traffic with a corresponding decline in revenue as a result of the COVID-19 pandemic and resulting preventative measures and imposed travel restrictions, according to a BC Ferries media release.
“This past year will go down in memory as the fiscal year (April 1 to March 31) in which the first 50 weeks delivered one of BC Ferries’ strongest performances to date, while the last two weeks of the fiscal year brought traffic to a near halt,” stated president and CEO Mark Collins. “The challenges of COVID-19 have been nothing short of profound, with impacts shared by all BC businesses, our province, our country and the world.”
In collaboration with the province, BC Ferries announced reduced service levels to meet the significant drop in demand due to the pandemic. In reducing service, the company kept the lifeline function ferries provide by delivering goods to island communities and transporting essential workers to where they are needed most.
“Going forward, our revised plans provide core essential service to coastal communities, while preserving our ability to operate sustainably,” stated Collins. “Without question, this requires reducing costs further and looking for additional efficiencies. We have reduced operating and capital spending significantly and will only proceed with expenditures directly linked to safety and critical operations.”
In fiscal 2020, revenues increased $15.7 million or 1.7 per cent compared to fiscal 2019, primarily as a result of increased traffic volumes and retail sales, partially offset by the impact of the COVID-19 pandemic, according to the release. In the 12 months ended March 31, 2020, BC Ferries invested $238.1 million in capital expenditures to improve ferry services comprised of:
• $140.9 million in new vessels
• $45.6 million in vessel upgrades and modifications
• $26.0 million in information technology
• $15.5 million in terminal marine structures and
• $10.1 million in terminal building upgrades
BC Ferries’ fleet reliability record exceeded the target at 99.7 per cent. The company carried up to $8 billion of cargo, generating commercial revenue of $89.9 million. The new direct northern/mid-coast route and its vessel, Northern Sea Wolf, was brought into service, helping the mid-coast realize its tourism potential. The company also took delivery of two new Island Class hybrid-electric ships designed for future full electric operation, including Island Discovery, now in operation on the Powell River/Texada Island route.
BC Ferries provided over 82,000 round trips during fiscal 2020, 2,330 more than in the prior year and 4,276.5 more round trips over what is required of the company under the Coastal Ferry Services Contract, according to the release. The company carried 8.8 million vehicles and 21.7 million passengers during fiscal 2020. In fiscal 2020, for the first 50 weeks, passenger traffic was up 0.1 per cent and vehicle traffic was up 1.3 per cent.
In March 2020, the COVID-19 pandemic significantly impacted vehicle and passenger traffic. During the last two weeks of March 2020, traffic dropped off with decreases of 55 per cent in vehicles and 69 per cent in passengers. This resulted in a year-to-date decrease of 1.0 per cent in vehicle traffic and 2.7 per cent in passenger traffic compared to the prior year.
BC Ferries’ full financial statements, including notes and Management’s Discussion and Analysis, as well as the company’s Statement of Executive Compensation for fiscal 2020, are filed on SEDAR and will be available at sedar.com.
