Second quarter shows another record level of vehicle traffic

VICTORIA, BC, Nov. 25, 2022 /CNW/ - Ferries released its second quarter results today for the three and six months ending September 30, 2022. Vehicle and passenger traffic, revenue and net earnings are all higher compared to the same periods in the prior year.

For the six months ending September 30, 2022, 5.4 million vehicles were carried, up 4 per cent as compared to 5.2 million in the same period in fiscal 2020, pre-COVID.

"As a result of our employees' commitment to our customers and communities, we hit a new record for vehicle traffic levels and delivered 1,700 more round trips during the first half of the fiscal year," said Jill Sharland, BC Ferries' Interim President and CEO. "Our service is an integral part of British Columbia's transportation system and I cannot thank the staff enough for going above and beyond to keep the system moving."

In the three months ending September 30, 2022, BC Ferries carried 7.5 million passengers and 3.0 million vehicles, compared to 7.0 million passengers and 3.0 million vehicles in the same period in the prior year. Year-to-date, the company carried 12.9 million passengers and 5.4 million vehicles, an increase of 28 per cent and 15 per cent, respectively, compared to the same period in the prior year, primarily as a result of travel restrictions being in place through most of the first quarter in the prior year.

BC Ferries' net earnings for the three months ending September 30, 2022, were $80.4 million, consistent with the same quarter the previous year. Year-to-date since April 1, 2022, net earnings were $88.3 million compared to net earnings of $84.6 million in the prior year.

Revenue for the three months ending September 30, 2022, at $343.1 million, was up $26.3 million over the same period in the prior year primarily as a result of higher passenger traffic volumes, net retail sales, ferry transportation fees and fuel surcharges. Year-to-date, revenue was $608.0 million, up $62.0 million over the same period in the prior year primarily as a result of higher traffic volumes, net retail sales and fuel surcharges partially offset by lower Safe Restart Funding.

New fare choices, including advance purchase saver fares (available on the Metro Vancouver ? Vancouver Island and the Metro Vancouver ? Sunshine Coast routes) are contributing to increased vehicle traffic on traditionally lower utilized sailings and fewer sailing waits overall. Since March 2021, over 1 million customers have taken advantage of Saver fares.

During the three months ending September 30, 2022, expenses from operations increased by $25.6 million or 11 per cent to $248.9 million compared to the same period in the prior year. Year-to-date, expenses from operations increased $56.9 million or 13 per cent to $491.0 million, mainly due to an increased number of sailings, and corresponding higher labour costs and fuel consumption, as well as higher fuel costs and higher depreciation.

Capital expenditures in the three and six months ending September 30, 2022 totalled $22.4 million and $48.9 million respectively, and included investments in existing ships, hardware upgrades, and various other projects.

In December 2020, BC Ferries received $308.0 million from the Province as part of the provincial and federal governments' Safe Restart Funding program. All of the direct operating relief funding has been exhausted with the remaining funding intended to offset the costs of discretionary sailings and to limit fare increases. In the three months ending September 30, 2022, BC Ferries recognized $3.1 million ($5.6 million year-to-date) of Safe Restart Funding compared to $2.8 million ($62.8 million year-to-date) in the same period in the prior year.

BC Ferries' full financial statements, including notes, and Management's Discussion and Analysis are filed on SEDAR and will be available at www.sedar.com. 

BC Ferries is one of the largest ferry operators in the world based on passengers transported annually and transportation infrastructure, and carried 17.9 million passengers and 8.5 million vehicles during the fiscal year ended March 31, 2022. BC Ferries provides frequent year-round ferry transportation services to the west coast of Canada on 25 routes, currently supported by 39 vessels and 47 terminals, and also manages other remote routes through contracts with independent operators.

FORWARD LOOKING STATEMENTS
This news release contains certain "forward looking statements". These statements relate to future events or future performance and reflect management's expectations regarding our growth, results of operations, performance, business prospects and opportunities, and industry performance and trends. They reflect management's current internal projections, expectations or beliefs and are based on information currently available to management. Some of the factors that have been considered in formulating the assumptions upon which forward looking statements are based include traffic levels, the value of the Canadian Dollar relative to the US Dollar, fuel costs, inflation trends, construction costs, the state of the local economy, fluctuating financial markets, demographics, tax changes, the requirements of the Coastal Ferry Services Contract, and the impact of the COVID-19 pandemic.

Examples of forward looking statements included in this release include statements with respect to: the impact of the federal-provincial Safe Restart Funding, and new fare choices.  In some cases, forward looking statements can be identified by terminology such as "may", "will", "should", "expect", "plan", "anticipate", "believe", "estimate", "predict", "potential", "continue" or the negative of these terms or other comparable terminology. A number of factors could cause actual events or results to differ materially from the results discussed in the forward looking statements. In evaluating these statements, prospective investors should specifically consider various factors including, but not limited to, the risks and uncertainties associated with: vendor delays or non-performance, capital market access, interest rates, foreign currency, fuel prices, and traffic volume fluctuations, the implementation of major capital projects, security, safety, and environmental incidents, confidential or sensitive information breaches, changes in laws, vessel repair facility limitations, regulatory changes, tax changes, and Indigenous rights and claims.

Actual results may differ materially from any forward looking statement. Although management believes that the forward looking statements contained in this release are based upon reasonable assumptions, investors cannot be assured that actual results will be consistent with these forward looking statements. These forward looking statements are made as of the date of this release, and British Columbia Ferry Services Inc. assumes no obligation to update or revise them to reflect new events or circumstances except as may be required by applicable law.

NON-IFRS MEASURES
In addition to providing measures prepared in accordance with International Financial Reporting Standards (IFRS), we present certain financial measures that do not have any standardized meanings prescribed by IFRS and therefore are unlikely to be comparable to similar measures presented by other companies. These supplemental financial measures are provided to assist readers in determining our ability to generate cash from operations and improve the comparability of our results from one period to another. We believe these measures are useful in assessing operating performance of our ongoing business on an overall basis.

Significant events second quarter of fiscal 2023

Significant events during and subsequent to the Second Quarter of Fiscal 2023 include the following:

• On July 21, 2022, the company's Board of Directors ended Mark Collins' contract as President and Chief Executive Officer of BC Ferries. On July 22, 2022, Jill Sharland was appointed Interim President and Chief Executive Officer. Ms. Sharland is a senior finance and operations executive who also serves as Chief Financial Officer of BC Ferries.
  
  
  
• On July 28, 2022, BC Ferries and Snuneymuxw First Nation entered into a relationship protocol agreement to guide their work together going forward. The protocol is the first step in building a strong relationship between the two parties built on mutual respect, recognition, mutual benefit and cooperation. There are four BC Ferries terminals currently operating in the Snuneymuxw territory.
  
  
  
• On September 30, 2022, BC Ferries filed with the Commissioner its submission for the sixth performance term. This begins the process of price cap setting by the Commissioner and negotiations with the Province regarding changes in core service levels and related ferry transportation fees for the period April 1, 2024 through March 31, 2028. The Commissioner will make a preliminary determination on the Performance Term Six fare price caps by March 31, 2023 and a final determination on the Performance Term Six price caps by September 30, 2023. The Commissioner welcomes public input throughout this process. The submission document can be found at: www.bcferrycommission.ca.
  
  
  
• On October 14, 2022, the Commissioner issued Order 22-02A, approving an application for a major capital project to redevelop the Fleet Maintenance Unit Site, which is BC Ferries primary vessel maintenance and refit facility located at Deas Basin in Richmond, B.C. near the George Massey Tunnel.
  
  
  
• On November 1, 2022, due to sustained high fuel prices, fuel surcharges increased by 1.5 per cent bringing the fuel surcharge to 4 per cent. A fuel surcharge of 2.5 per cent had been in place on all routes since June 1, 2022.

SOURCE British Columbia Ferry Services Inc.