BC Ferries cuts Q3 net loss to $3.7 million, reports record passenger traffic

BC Ferries released its third quarter results for the fiscal year ending March 31, 2019. The company reported a net loss of $3.7 million for the three months ended December 31, 2018, as compared to a net loss of $14.8 million reported in the same quarter last year. In the three months ended December 31, 2018, BC Ferries delivered over 42,000 sailings, an average of 466 sailings per day for its customers. The company carried 4.7 million passengers and 2.0 million vehicles, an increase of 1.7 per cent and 2.6 per cent respectively, compared to the same quarter in the prior year. These passenger traffic levels are the highest the company has experienced in over 20 years and vehicle traffic levels are the highest ever experienced, the ferry operator said in its press release.

Due to the seasonality of ferry travel, BC Ferries generates higher net earnings in the first and second quarters – the spring and summer months – which are typically reduced by net losses in the third and fourth quarters, when fewer discretionary customers are travelling. BC Ferries performs vessel refits and major maintenance programs on its fleet during the fall and winter months to minimize the impact on ferry passengers.

Year-to-date net earnings were $93.2 million, $7.7 million lower than the same period last year. These lower results reflect a reduction in fares, additional sailings, costs associated with the reintroduction of the Spirit of British Columbia following its mid-life upgrade and service enhancements for ferry users.

Capital expenditures in the three and nine months periods ended December 31, 2018 totalled $45.0 million and $171.8 million, respectively. In the nine months ended December 31, 2018, the total spent in British Columbia was approximately $105 million with firms such as Esquimalt Drydock Company, Fraser River Pile & Dredge (GP) Inc., Point Hope Maritime Ltd., Vancouver Drydock Co., and Vancouver Shipyards Co. Ltd., as well as at BC Ferries’ own maintenance facility in Richmond. In the three and nine months ended December 31, 2018, $11.3 million in grant funding was recorded ($0.8 million from FortisBC in the three months ended December 31, 2018 and $10.5 million from the federal New Building Canada Fund in the nine months ended December 31, 2018).

Last fall, BC Ferries filed its Performance Term Five Submission to the British Columbia Ferries Commissioner. The submission provides information to assist the Commissioner to establish price caps for all regulated routes as specified in the Coastal Ferry Services Contract, for the period of April 1, 2020 – March 31, 2024. The Commissioner will release his preliminary ruling by March 31, 2019, with the final ruling expected by September 30, 2019.

A key element of the Performance Term Five Submission is BC Ferries’ 12-Year Capital Plan, which details plans to invest more than $3.9 billion. This will be the largest capital plan in BC Ferries’ history. “The capital plan emphasizes more system capacity, operational efficiency, resiliency and travel certainty. These are the things ferry users tell us they want,” said Collins. This spring will see the Spirit of Vancouver Island re-enter service with its advanced liquefied natural gas propulsion system and mid-life upgrade. This investment lowers greenhouse gas emissions and particulate emissions, as well as reducing fuel spend. It is a major step in BC Ferries’ Clean Technology Adoption Plan.

This fall will see the delivery of two new Island Class vessels outfitted with hybrid dieselelectric propulsion. They will be built to be capable of conversion to all-electric propulsion as the technology permits and the necessary infrastructure becomes available. These 81-metre ships will accommodate 450 passengers and crew and approximately 47 vehicles. They are expected to enter service on the Texada Island – Powell River and Port McNeill – Alert Bay – Sointula Island routes in 2020. Their arrival is the next significant step in BC Ferries’ Clean Technology Adoption Plan.

BC Ferries is one of the largest ferry operators in the world based on passengers transported annually and transportation infrastructure, and carried 22.0 million passengers and 8.7 million vehicles during the fiscal year ended March 31, 2018. 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.