BC Ferries releases year-end results
BC Ferries released its year-end results today with consolidated net earnings of $52.2 million for fiscal 2019, compared to consolidated net earnings of $59.9 million for fiscal 2018. This year, BC Ferries experienced the highest vehicle traffic levels ever and passenger traffic levels were the second highest in the company’s history.
“High traffic volumes allow good financial results which enable us to expand our service to communities, renew the fleet, upgrade terminals, pay down debt and reduce future borrowing,” said Mark Collins, BC Ferries’ President and CEO. “These are essential for a sustainable and environmentally-friendly ferry system. Our $3.9 billion 12-year capital plan addresses the need for a more resilient ferry service and emphasizes capacity, operational efficiency, affordability and flexibility.”
BC Ferries invested $241.1 million in capital expenditures in the 12 months ended March 31, 2019 comprised of: $133.5 million in vessel upgrades and modifications, $49.0 million in new vessels, $28.2 million in information technology, $19.5 million in terminal building upgrades and $10.9 million in terminal marine structures.
Clean, sustainable and quiet operations are top priorities for BC Ferries. The company now has five vessels operating on liquefied natural gas (LNG). While still a fossil fuel, it is a cleaner and less expensive fuel source than the ultra-low sulphur diesel used for the other vessels. The cable ferry, which operates between Buckley Bay on Vancouver Island and Denman Island, has smaller power requirements than a traditional ferry, leading to a reduction in greenhouse gas emissions of approximately 50 per cent.
BC Ferries is investing in clean, modern ferry technology. The company currently has two Island Class electric battery hybrid ships under construction for service to coastal communities on Northern Vancouver Island. When electric technology matures and electricity is available in the quantities required, BC Ferries plans to operate them as fully electric ferries. Batteries for these two new vessels are supplied by Corvus Energy, a B.C. company. In May 2019, BC Ferries issued a Request for Proposals for technical services to reduce underwater radiated noise from its vessels. This is to help reduce impacts on southern resident killer whales.
“Continued investment to reduce our environmental footprint is of great importance to BC Ferries,” said Collins. “We are on a path to greater sustainability by continuously developing and environment in which we operate.”
BC Ferries also continues to focus on fare affordability. At the start of fiscal 2019 (April 1, 2018), BC Ferries, with partial funding from the Province, reduced the fares on all routes by 15 per cent, with the exception of the three Metro Vancouver – Vancouver Island routes. Fares on these routes were held constant. The B.C. seniors’ passenger discount was also increased from 50 per cent to 100 per cent for travel Monday to Thursday. There are no fare increases being introduced in Fiscal 2020.
Vehicle traffic increased 1.9 per cent and passenger traffic increased 1.2 per cent over the prior year. To accommodate the higher traffic volumes and improve the customer experience, BC Ferries provided 877 additional round trips throughout the system over the previous year and 3,281.5 more round trips over and above what was required under the Coastal Ferry Services Contract. The company also adjusted the schedule for the routes operating out of Horseshoe Bay terminal.
During fiscal 2019, the company also re-introduced the upgraded Spirit of British Columbia into service and implemented a new reservation system. Together, these actions resulted in an increase in labour, fuel consumption, and training-related costs partially offset by the lower cost reflecting the Spirit of British Columbia’s consumption of LNG rather than marine diesel. The increase in operating expenses also included the impact of higher marine diesel prices, wage rate increases in accordance with the Collective Agreement and higher depreciation. As a result, total operating expenses increased $36.4 million from $784.3 million to $820.7 million.
BC Ferries is one of the largest ferry operators in the world based on passengers transported annually and transportation infrastructure, and carried 22.3 million passengers and 8.9 million vehicles during the fiscal year ended March 31, 2019. 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.
