BC Ferries vessel. (Mike Patterson, Vista Radio staff)
The pandemic is largely to blame for BC Ferries’ sinking bottom line.
The company released its second-quarter results today, and they show just how much of an impact COVID-19 is having on its finances.
BC Ferries’ net earnings for the second quarter of fiscal 2021 were $37.8 million.
That’s $57.2 million lower than the same quarter of the previous year.
Year-to-date, since April 1st, 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.
“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,” said BC Ferries president and CEO, Mark Collins.
“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.”
The numbers tell a grim story:
- Revenue for the quarter ended Sept. 30th at $247.6 million, was down $81.7 million year-over-year;
- Revenue for the six months ended Sept. 30th was $385 million, down $190.7 million over the same period in the prior year;
- During the quarter, BC Ferries carried 5.5 million passengers and 2.5 million vehicles, a decrease of 29.0 per cent and 14.0 per cent respectively, compared to the same quarter the previous year;
- Year-to-date, the company has carried 7.7 million passengers and 3.8 million vehicles, a decrease of 43.0 per cent and 28.7 per cent, respectively, compared to the same period in the previous year;
- During the three months ended Sept. 30th, expenses from operations fell $25.4 million or 11.5 per cent compared to the same period in the prior year; and
- Year-to-date since April 1st, expenses from operations decreased $62.1 million or 14.1 per cent and include reduced labour costs, fuel consumption, maintenance, contracted services, depreciation expense, travel, non-safety related training and advertising. The company says that these cost reductions, “while helpful, did not offset the decline in revenues as a significant portion of BC Ferries costs are fixed and do not meaningfully fluctuate with reduced traffic demand.”
“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,” Collins said.
“Given the impact of the pandemic on our operations and financial position, we are reviewing all 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.”
On Sept. 18th, the federal and provincial governments announced that BC Ferries will receive $308 million under the Safe Restart Funding Program.
BC Ferries says that since the beginning of the pandemic, it “has been working closely with the province to collaborate on strategic options to sustain the ferry system for the long term.”
Earlier this month BC Ferries reached a formal agreement with the province regarding the $308 million.
Capital expenditures in the three and six months ended Sept. 30th totalled $25.7 million and $49.3 million respectively.
Significant investments include the five new vessels currently under construction contracted in 2019, major vessel overhauls and inspections, IT upgrades and various other projects.