At CP's Q419 earnings analyst conference call yesterday, Keith Creel was effusive about CP's acquisition of CMG. Here are a few excerpts:
From Creel's opening remarks:
"...I’m also happy to highlight a number of positive announcements this past quarter that will be benefiting this franchise and our shareholders, customers and fellow colleagues for years to come, namely in the CMQ acquisition.
In November, we announced that the acquisition of the Central Maine & Quebec railroad. This acquisition enables CP to extend its reach to St. John ... New Brunswick can increase our presence in Eastern U.S. with access to a port in Searsport, Maine. We closed the transaction successfully at the end of December.
I was excited about the strategic value of the network addition would enable when we purchased it. But after spending time on the railroad the last few weeks, I feel even more compelled and convicted about the addition to our CP family franchise and the value it represents. The value proposition is simply compelling.
Operationally, we’ll work hard at bringing our expertise, our safety record and our disciplined culture to the railroad as quickly as we possibly can. Commercially, the customers are extremely excited to have service alternatives, which they simply have not been afforded in over two decades.
We’ll be able to offer the shortest routes from the Maritimes to Montreal, Toronto, Chicago, and Western Canada, that will be truck-like reliable and truck-like compatible – competitive on a service standpoint and obviously much more compelling on a call standpoint. We’re going to stick to our expertise, making a real acquisition, where our team has proven that we know how to create service solutions that enable compelling value for our customers, for our shareholders, both at the same time..."
Later on, Creel says "...I see opportunity in intermodal growth, be it domestic, be it international. I see an opportunity in automotive growth, be it domestic inbound product, be it off the water inbound product. I see opportunities in fuels. I see opportunities in lumber..."
And "...anticipate [STB] approval in May of this year to implement a more CP like operating plan [FRA class 3 for 40mph MAS], taking time out of the schedules with the existing physical plant. It’s not that we’re running trains faster, per se, it’s, in totality, the transit time is reduced, because we’re handling the trains differently and the schedules differently and the philosophically, it’s differently.
So more to come. I think 2021, you’ll start to see the needle move in 2021 and 2022 for certain. Those are two key years for us..."
And wrt to CP interest in G&W's Quebec Gatineau, Creel offered "...Obviously, there’s a piece of that network again, that sort of is reflective of the CMQ story, railroad that we used to own that went to Quebec city. That just depends. It may or may not come into play, but it could represent compelling value. It just depends on the willingness to sell it and what the numbers are and if we can make it work. So with that said, that’s an opportunity...."
URL to the con call transcript: https://seekingalpha.com/article/431998 ... nings-call