Grain revenues slide at CN in first quarter


Net income at Canadian National Railway Co. (CN) fell to C$741 million in the first quarter ended March 31, down 16% from C$884 million in the same period a year ago. Earnings were bogged down by a decline in revenues, which fell to C$3.194 billion from C$3.206 billion.

The company’s revenues in its grain and fertilizers business declined 11% to C$539 million in the first quarter, down from C$607 million in the same period a year ago. CN also indicated it moved fewer carloads in the grain and fertilizers unit during the first quarter, with carloads at 145,000, down 12% from 164,000 in the same period a year ago.
“Canadian grain volume was down 10% from last year as the prolonged extreme cold weather reduced our train length in the prairies and impacted export,” Jean-Jacques Ruest, interim president and chief executive officer, said during an April 23 conference call with analysts. “In the last seven weeks, we made quite significant progress and we are now running current with weekly car orders as placed on us by the grain companies. CN’s spot is 5,700-grain hopper cars per week in March, up 40% from the run rate of February. The export season of grain will extend into the second quarter.”

Ruest said CN’s board has approved, contingent on some conditions, that CN can rebuild its Canadian grain fleet and place orders in 2019 and 2020 to refurb new-generation hopper cars, an initiative he said will help CN rebuild its reputation while building a good position for the company in the Canadian grain trade.


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