Annual Meeting of Shareholders
Annual Meeting of Shareholders Friday, April 29, 2011
1
Design Specification
Treatment Units
inc room
Scrubber Sludge tk.
CW drain tank
System oil tank
Sludge Collecting tank
B Rev.
Released as information to LR
PTK 13.2.2011
Description of Revision
Drawn Drawn
TM
Checked Approved
MOV / 10-11-18 MJS / 10-11-19 JON / 10-11-19
1:200
Approved
SUL LAKER BULKER
Metr.
Drawing Name
GENERAL ARRANGEMENT
MOV 13.2.2011 JON 14.2.2011 Checked
Scale
Original Paper Size (ISO 216, A#)
0
GA Rev.
Page/Pages
Drawing Number
Seq.No
01/02 Revision
.B3870. 1112 . 01 - B
2
Contract Signing
3
Nantong Mingde Shipyard
4
Duty Removal Announcement October 1, 2010
5
6
February 25th Announcement
ALGOMA CENTRAL CORPORATION Announces Agreement to Acquire Upper Lakes Group Interests in Seaway Marine Transport
7
Algoma Mariner Under Construction
8
Laker Fleet Renewal – Algoma Equinox Class
9
2010 Financial Results
10
Revenue ($millions)
Revenue increased by $16.2 million or 3%. • Domestic Dry-bulk - increased operating days and fuel surcharge recovery.
$689
$548
$581 $520
$536
• Real Estate - hotel re-opening in Sault Ste. Marie. • Ocean Shipping - Reduced due to strengthening of Canadian dollar.
2006
2007
2008
2009
2010
11
Operating Earnings Net of Tax 9% increase to $33.6 million Improvements in Domestic Dry-bulk and Product Tankers. • Increased operating days • Reduction in operating costs
$45
$46
$41
$34 $31
2006
2007
2008
2009
2010
12
Earnings per Share Earnings per share in 2010 decreased to $8.38 from $9.98 in 2009.
$13.48
$10.81
$10.61 $9.98 $8.38
Increase in financial and tax expense. Decrease in FX gains. 2006
2007
2008
2009
2010
13
Cash Flow from Operations Per Share $19.02 per share compared to $15.51 per share in 2009.
$23.12 $21.08 $19.02 $18.10 $15.51
Impacted by increased segment earnings. Used to fund dividend payments, service existing debt and fund a portion of capital requirements.
2006
2007
2008
2009
2010
14 14
Return on Capital Employed (ROCE) Measures effective utilization of capital resources.
12.3% 11.3% 9.9%
Value created for shareholders.
6.0%
5.9%
2009
2010
In 2010 a reduction to 5.9%. 2006
2007
2008
15
Adjusted ROCE Significant progress payments on capital assets under construction.
ROCE - Adjusted for Assets Under Construction 12.8%
13.3% 11.9%
Target Range for Adjusted ROCE is 10% to 12%
If progress payments excluded improves to 7.7%.
7.2%
2006
2007
2008
2009
7.7%
2010
16
ROCE Improvement Plan Integration of Domestic operation.
ROCE - Adjusted for Assets Under Construction 12.8%
Operations Excellence • Cost control • Reduced incidents • Minimized unproductive time • Improved vessel utilization Equinox Class vessels.
13.3% 11.9%
Target Range for Adjusted ROCE is 10% to 12%
7.2%
2006
2007
2008
2009
7.7%
2010
17
Share Price vs. Net Book Value 2002 through 2010 under Canadian GAAP
IFRS
$136.00 $127.50
$101.00 $93.50
$89.00 $78.50 $71.00 $51.00
$62.50
$112.76
$45.00
$63.55
$64.44
$68.76
2002
2003
2004
$75.56
2005
$85.71
2006
Net Book Value per Share
$93.21
2007
$116.30 $96.96
$113.10
2008
2009
Closing Price per Share
2010
2011 Mar 31
18
2011 First Quarter Results
19
2011 Q1 Dividend Quarterly dividend of $0.45.
$1.80 $1.80 $1.70
65th consecutive quarterly dividend. Doubled over this same period.
$1.40 $1.30
$1.00 $1.00 $1.00 $1.00
2001
2002
2003
2004
$1.00
2005
2006
2007
2008
2009
2010
20
2011 First Quarter Results
21
2011 Q1 Highlights First report under IFRS. Net loss of $17.0 million is $0.2 million lower than 2010. • Revenues improved in domestic dry-bulk and tankers partially offset by planned Ocean dry-docking. • Higher cost in domestic drybulk because of winter operation of Salties. Partially offset by stronger results from Tankers.
Three Months Ended March 31
2011
2010
Revenue
$57,186
$ 54,765
Net loss
$ 17,013
$ 17,202
Loss per share
$
$
4.37
4.42
22
Impact of IFRS Figures for 2010 in Q1 report restated for IFRS. Significant areas of impact are • Proportionately consolidate SMT • Long-lived assets tested for impairment • Dry-dock costs previously expensed are now capitalized • Accounting for pension obligations • Asset impairments and pension deficit adjustments reduce 2010 closing equity by $51 million. 23
Financing Activities Existing bank facility placed in November 2009 and matures this November. Refinancing objectives • Sufficient capacity to support capital program • Secure today’s attractive long-term rates • Better match term of debt to asset life • Attract capital from outside of traditional banks
24
Convertible Debenture Debenture issue is step one and we expect to complete a refinancing this summer. Convertible Debenture closed in early April • $69 million total issuance. • 6% for 7 years. • Attractive financing as part of our overall refinancing plans.
25
Challenges for 2011 and Beyond
26
Challenges for 2011 and Beyond Customers’ future volume requirements Domestic shipping re-organization and integration Environmental Construction and delivery of Equinox Class vessels
27
Environmental Report
28
Challenges for 2011 and Beyond Customers’ future volume requirements Domestic shipping re-organization and integration Environmental Construction and delivery of Equinox Class vessels
29
Concluding Remarks
30
ONE Vision, ONE Purpose, ONE Team
www.algonet.com TSX:ALC
31
1
Design Specification
Treatment Units
inc room
Scrubber Sludge tk.
CW drain tank
System oil tank
Sludge Collecting tank
B Rev.
Released as information to LR
PTK 13.2.2011
Description of Revision
Drawn Drawn
TM
Checked Approved
MOV / 10-11-18 MJS / 10-11-19 JON / 10-11-19
1:200
Approved
SUL LAKER BULKER
Metr.
Drawing Name
GENERAL ARRANGEMENT
MOV 13.2.2011 JON 14.2.2011 Checked
Scale
Original Paper Size (ISO 216, A#)
0
GA Rev.
Page/Pages
Drawing Number
Seq.No
01/02 Revision
.B3870. 1112 . 01 - B
2
Contract Signing
3
Nantong Mingde Shipyard
4
Duty Removal Announcement October 1, 2010
5
6
February 25th Announcement
ALGOMA CENTRAL CORPORATION Announces Agreement to Acquire Upper Lakes Group Interests in Seaway Marine Transport
7
Algoma Mariner Under Construction
8
Laker Fleet Renewal – Algoma Equinox Class
9
2010 Financial Results
10
Revenue ($millions)
Revenue increased by $16.2 million or 3%. • Domestic Dry-bulk - increased operating days and fuel surcharge recovery.
$689
$548
$581 $520
$536
• Real Estate - hotel re-opening in Sault Ste. Marie. • Ocean Shipping - Reduced due to strengthening of Canadian dollar.
2006
2007
2008
2009
2010
11
Operating Earnings Net of Tax 9% increase to $33.6 million Improvements in Domestic Dry-bulk and Product Tankers. • Increased operating days • Reduction in operating costs
$45
$46
$41
$34 $31
2006
2007
2008
2009
2010
12
Earnings per Share Earnings per share in 2010 decreased to $8.38 from $9.98 in 2009.
$13.48
$10.81
$10.61 $9.98 $8.38
Increase in financial and tax expense. Decrease in FX gains. 2006
2007
2008
2009
2010
13
Cash Flow from Operations Per Share $19.02 per share compared to $15.51 per share in 2009.
$23.12 $21.08 $19.02 $18.10 $15.51
Impacted by increased segment earnings. Used to fund dividend payments, service existing debt and fund a portion of capital requirements.
2006
2007
2008
2009
2010
14 14
Return on Capital Employed (ROCE) Measures effective utilization of capital resources.
12.3% 11.3% 9.9%
Value created for shareholders.
6.0%
5.9%
2009
2010
In 2010 a reduction to 5.9%. 2006
2007
2008
15
Adjusted ROCE Significant progress payments on capital assets under construction.
ROCE - Adjusted for Assets Under Construction 12.8%
13.3% 11.9%
Target Range for Adjusted ROCE is 10% to 12%
If progress payments excluded improves to 7.7%.
7.2%
2006
2007
2008
2009
7.7%
2010
16
ROCE Improvement Plan Integration of Domestic operation.
ROCE - Adjusted for Assets Under Construction 12.8%
Operations Excellence • Cost control • Reduced incidents • Minimized unproductive time • Improved vessel utilization Equinox Class vessels.
13.3% 11.9%
Target Range for Adjusted ROCE is 10% to 12%
7.2%
2006
2007
2008
2009
7.7%
2010
17
Share Price vs. Net Book Value 2002 through 2010 under Canadian GAAP
IFRS
$136.00 $127.50
$101.00 $93.50
$89.00 $78.50 $71.00 $51.00
$62.50
$112.76
$45.00
$63.55
$64.44
$68.76
2002
2003
2004
$75.56
2005
$85.71
2006
Net Book Value per Share
$93.21
2007
$116.30 $96.96
$113.10
2008
2009
Closing Price per Share
2010
2011 Mar 31
18
2011 First Quarter Results
19
2011 Q1 Dividend Quarterly dividend of $0.45.
$1.80 $1.80 $1.70
65th consecutive quarterly dividend. Doubled over this same period.
$1.40 $1.30
$1.00 $1.00 $1.00 $1.00
2001
2002
2003
2004
$1.00
2005
2006
2007
2008
2009
2010
20
2011 First Quarter Results
21
2011 Q1 Highlights First report under IFRS. Net loss of $17.0 million is $0.2 million lower than 2010. • Revenues improved in domestic dry-bulk and tankers partially offset by planned Ocean dry-docking. • Higher cost in domestic drybulk because of winter operation of Salties. Partially offset by stronger results from Tankers.
Three Months Ended March 31
2011
2010
Revenue
$57,186
$ 54,765
Net loss
$ 17,013
$ 17,202
Loss per share
$
$
4.37
4.42
22
Impact of IFRS Figures for 2010 in Q1 report restated for IFRS. Significant areas of impact are • Proportionately consolidate SMT • Long-lived assets tested for impairment • Dry-dock costs previously expensed are now capitalized • Accounting for pension obligations • Asset impairments and pension deficit adjustments reduce 2010 closing equity by $51 million. 23
Financing Activities Existing bank facility placed in November 2009 and matures this November. Refinancing objectives • Sufficient capacity to support capital program • Secure today’s attractive long-term rates • Better match term of debt to asset life • Attract capital from outside of traditional banks
24
Convertible Debenture Debenture issue is step one and we expect to complete a refinancing this summer. Convertible Debenture closed in early April • $69 million total issuance. • 6% for 7 years. • Attractive financing as part of our overall refinancing plans.
25
Challenges for 2011 and Beyond
26
Challenges for 2011 and Beyond Customers’ future volume requirements Domestic shipping re-organization and integration Environmental Construction and delivery of Equinox Class vessels
27
Environmental Report
28
Challenges for 2011 and Beyond Customers’ future volume requirements Domestic shipping re-organization and integration Environmental Construction and delivery of Equinox Class vessels
29
Concluding Remarks
30
ONE Vision, ONE Purpose, ONE Team
www.algonet.com TSX:ALC
31
