British Columbia Ferry Services Inc. (BC Ferries) has released its first quarter results.
Passenger traffic levels were the highest BC Ferries has experienced in the past 20 years and vehicle traffic levels were the highest the company has ever experienced as compared to the same quarter in prior years. During this quarter, passenger traffic increased 3.8 per cent and vehicle traffic increased 4.4 per cent compared to the same quarter in the prior year.
“This first quarter has been very busy for our company as we carried historically high volumes and focused on improving the customer experience,” said Mark Collins, BC Ferries’ President and CEO. “We have added additional sailings, provided numerous fare discount opportunities and introduced efficient new vessels with modern customer amenities on-board.”
Net earnings for the three months ended June 30, 2017 (the first quarter of fiscal 2018) were $17.3 million, compared to net earnings of $27.0 million in the first quarter of the previous year. “Our net earnings have decreased compared to first quarter last year as BC Ferries invests in this improved customer experience. We have held ticket prices stable, absorbed increased operating costs due to higher traffic and delivered additional capacity to customers. In particular, our targeted discount program has led to increased travel by some of our customers and shifted demand to previously underutilized sailings. In fact, on our major routes, there was a 7 per cent reduction in overloads for passenger vehicles year-over-year despite the higher traffic levels.”
Revenues increased by 3.1 per cent to $225.9 million primarily as a result of the increased traffic volumes, while the average tariff revenue per passenger remained unchanged and the average tariff revenue per vehicle decreased on the major routes.
Operating expenses increased by 8.8 per cent to $194.4 million, compared to the first quarter of the previous fiscal year. This was mainly due to an increase in fuel consumption, labour and training related costs that resulted from higher traffic volumes, an increase in round trips provided and the introduction of new ships.
“We remain focused on prudent fiscal management while striking the right balance between earnings and operational costs. All earnings are reinvested in services and infrastructure for our customers,” said Collins. “During this quarter alone, we invested $91 million in new vessels, vessel upgrades and terminal improvements.”
BC Ferries is one of the largest ferry operators in the world based on passengers transported annually and transportation infrastructure, and carried 21.0 million passengers and 8.3 million vehicles during the fiscal year ended March 31, 2017. BC Ferries provides frequent year-round ferry transportation services to the west coast of Canada on 24 routes, currently supported by 35 vessels and 47 terminals, and also manages other remote routes through contracts with independent operators.