BC Ferries released its second quarter results today for the three and six months ended September 30, 2020. The COVID-19 global pandemic continues to have a significant impact on the company’s operations and financial results.
BC Ferries’ net earnings for the second quarter of fiscal 2021 were $37.8 million, $57.2 million lower than the same quarter of the previous year.
Year-to-date, since April 1, 2020, 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 Mark Collins, BC Ferries’ President and CEO. “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.”
Revenue for the quarter ended September 30, 2020, at $247.6 million, was down $81.7 million year-over-year. Revenue for the six months ended September 30, 2020 was $385.0 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 in the prior 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 September 30, 2020, expenses from operations decreased $25.4 million or 11.5 per cent compared to the same period in the prior year.
Year-to-date since April 1, 2020, expenses from operations decreased $62.1 million or 14.1 per cent and includes reduced labour costs, fuel consumption, maintenance, contracted services, depreciation expense, travel, non-safety related training and advertising. 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,” said Collins. “Given the impact of the pandemic to our operations and financial position, we are reviewing all capital plans to identify opportunities to defer any expenditures that are not regulatory, security or 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 September 18, 2020, the Federal and Provincial Governments announced that BC Ferries will receive $308 million under the Safe Restart Funding Program. Since the beginning of the pandemic, BC Ferries has been working closely with the Province to collaborate on strategic options to sustain the ferry system for the long term. BC Ferries submitted a detailed plan to meet the public interest and the interests of customers in the provision of safe, reliable and affordable ferry service.
Earlier this month BC Ferries reached a formal agreement with the Province regarding the $308 million from the Safe Restart Funding Program. Capital expenditures in the three and six months ended September 30, 2020 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.