CMQ Profitability

[Cowford]

Q4 results are posted. While revenue had grown 9%, YOY Volume is up only 42 cars - negative growth from a "same store sales" perspective (given 2015 numbers did not include Rockland branch activity).

[Jeff Smith]

https://bangordailynews.com/2017/02/28/ ... 16-profit/" onclick="window.open(this.href);return false;

Brief, fair-use quote per railroad.net policy:

PORTLAND, Maine — The Central Maine and Quebec Railway in 2016 posted positive net income for the first time since buying the former Maine Montreal and Atlantic Railway in a bankruptcy sale.

In its fourth quarter earnings report, the Hermon-based international railroad reported net income of $605,000, driven by a 20 percent increase in revenue, to $30.8 million. That’s up from about $25.6 million in revenue in 2015.

In 2016, the rail line shipped more carloads of building products, fuel and propane, chemicals and fertilizers, and paper and wood pulp. Among those product categories, paper and wood pulp carloads were the only to drop lower in the fourth quarter than one year ago.

[Cowford]

Q2 2017 results posted. YOY revenue is flat, carloadings down 15% which I'm guessing means they're having some luck getting more business out of Irving (chem and propane) to offset the loss of haulage business, and net income tanked ($1.1M loss). Can anyone shed light on a few issues: "feed and grain" is down a whopping 60% YTD 2017. Why? I can't imagine this would be related to haulage. Also, "salt and minerals" is essentially flat YOY and down 20% compared with pre-Rockland branch period... is there any activity on the Rockland branch these days?!? It could be gains in cement could be masked by losses in salt/other minerals, but that doesn't seem likely. Finally, not sure where they place other commodity categories, like intermodal and metals... in "building products" (as they also have a "finished wood" category)?

All-in-all, CMQ is only billing 66 loads per day. While the traffic mix has changed, volume is the same as 2015 and below 2016.

[Cosakita18]

Could some of that loss be attributed to the revival of the PAR-NBSR interchange at 'keag?

I'm surprised CMQ hasn't been more aggressive in trying to get Potash and crude moving by rail east of Saint John. I've seen some very isolated intermodal activity, but It doesn't seem like they have enough traffic to warrant a real investment in IM.

[fogg1703]

'm surprised CMQ hasn't been more aggressive in trying to get Potash and crude moving by rail east of Saint John.

Im sure it wasn't for lack of trying. Very difficult to beat a rate for a single line haul of over 2000 miles.

I've seen some very isolated intermodal activity, but It doesn't seem like they have enough traffic to warrant a real investment in IM.

New shipping line (CMA CGM GROUP) begin sailings from Saint John this month. Perhaps CMQ could make a play.

[gokeefe]

Could some of that loss be attributed to the revival of the PAR-NBSR interchange at 'keag?

Yes, however the exact shift in volumes at that interchange are unclear.

[Cowford]

Q3 2017 results posted. Mixed YOY results depending on how you look at it. Revenue is up 12% - good! Revenue per car is up 19% - great! Volume down 5%, which is not great, but also not surprising, and it's the least they've been down in carloadings this year. The good news part is the same story as last quarter, only amplified: Favorable traffic mix changes. YOY carloadings of chem are up 3X in Q3 (albeit on a very small base), and propane loads are up 70%. Until this year, chem and propane was 15% of CMQ carloadings. Now those segments make up a full 30% of CMQ traffic; propane alone is nearly 20% of total volume.

[gokeefe]

What areas are they losing volume on?

[Cowford]

YTD, building products down 25%; agricultural products down 60%; "finished wood" down 20%; pulp and paper down 30%. Propane and chem are definitely paying the bills.

[gokeefe]

That's an interesting mix of downward traffic in a consumer driven economy ...

Traffic shift to other lanes/carriers?

[csx2039]

Yes, cmq is loosing forest product traffic to cn and Pan am.

[Cowford]

Traffic shift to other lanes/carriers?

Recall that their haulage agreement ended at the end of last year, really hurting the carload stats. If chem and fuel segments were flat YOY, carloadings would be down over 20% in Q3.

[cvrr5809]

YTD, building products down 25%; agricultural products down 60%; "finished wood" down 20%; pulp and paper down 30%. Propane and chem are definitely paying the bills.

Searsport Branch has been quite brisk at times this year. Saturday's "down" train had 31 cars, which nearly 50% was GAC(chemical loads). Even after they went back, there are nearly 30 cars in Searsport yard. The most I think I've seen without a crew or power around. Slurry has been steady(normally a block of 10-15 either way). Irving has added some traffic as well. Normally a couple all the way up to ten empties each train down, but usually goes back loaded 2-4 at a time. Dead River Hampden has been consistent all year. My favorite "newish" add has been the occasional dry product hopper for GAC! All in all, though, a seemingly decent 2017. Even better--very few re-crews even with the whole branch being 10 now.

[gokeefe]

Traffic shift to other lanes/carriers?

Recall that their haulage agreement ended at the end of last year, really hurting the carload stats. If chem and fuel segments were flat YOY, carloadings would be down over 20% in Q3.

Sounds as though the plan will be "hold on until marketing can come through with new business". So ... Opportunities are getting back auto and intermodal?

[fogg1703]

Searsport Branch has been quite brisk at times this year. Saturday's "down" train had 31 cars, which nearly 50% was GAC(chemical loads).

The GAC expansion has been a nice boost for the line for sure.

Opportunities are getting back auto and intermodal?

Auto's probably aren't coming back anytime soon. Irving Auto compounding yard is now a lumber reload as the traffic shifted to CN at Moncton. Intermodal is sparse but the occasional double stack to and from Saint John traverses the Moosehead.

What happened to the ag business? Was this the reason for the purchase of those hoppers?