Canadian National railroad coal shipments reach record high in March, Q1 revenue up on year: company

Houston — Canadian National railroad reported a record level of coal shipments in March, along with strong revenues in the first quarter, executives said Monday.

Not only did CN move all-time records for coal in March, but "[Teck Resources] is on track to start shipping in April 2021, and if marketing conditions remain favorable, we could see Coalspur continue to ramp up production, which will position us to move record coal volumes in 2021," CEO Jean-Jacques Ruest said on the call.

Although conditions look brighter for CN in Canada, "US coal might get worse from here," Ruest said, along with other sectors in the energy market.

In the first quarter, CN's coal revenues were $433 million, down 5% year on year. CN's Q1 coal carloads totaled 77,000 carloads at average revenue of $1,857, down 4% and 9%, respectively.

CN's net income in the first quarter was $1 billion, up 28.6% from the year-ago quarter.

Total revenues were $3.5 billion in the first quarter, flat year on year, while freight revenues totaled $3.4 billion, down 0.3%.

Carloads during the quarter were 1.3 million, down 5.9% from Q1 2019. Freight revenue per carload averaged $2,565, up 7% from the year-ago period.

OUTLOOK

"The network is currently in full operation and very fluid," Ruest said. "We have the capacity to move goods and enable the eventual recovery of the economy."

Despite the positive outlook, CN added that it withdrew its 2020 financial guidance.

"The pandemic is having an unprecedented and extraordinary impact on the global economy," CFO Ghislain Houle said. "In North America and in Canada, in particular, these impacts are being compounded by the drop in oil prices. The economic outlook and, therefore, overall demand for transportation services is highly correlated to the duration of containment measures and the impacts on businesses and consumers, which, at this point, remain uncertain."