Logistec announces 2018 year-end results
Logistec announces 2018 year-end results
Canada NewsWire
MONTRÉAL, March 15, 2019
MONTRÉAL, March 15, 2019 /CNW Telbec/ - LOGISTEC Corporation (TSX: LGT.A) (TSX: LGT.B), a marine and environmental services provider, today announced its financial results for the fourth quarter and the year ended December 31, 2018.
Consolidated revenue totalled $584.9 million in 2018, an increase of $109.1 million or 22.9% over 2017. The marine services segment posted revenue of $340.8 million in 2018, representing higher sales compared with $205.3 million in 2017. This increase stems from two factors: a general volume increase in our bulk and break-bulk terminals, which saw more activity this year than in 2017, and the business combinations of Gulf Stream Marine, Inc. ("GSM") and Pate Stevedore Company, Inc. ("Pate"), which contributed an additional $102.4 million in sales during the year. Revenue from the environmental services segment totalled $244.1 million, compared with $270.5 million in 2017, a decrease of $26.3 million. This decrease is mainly due to lower revenue generated by FER-PAL Construction Ltd. ("FER-PAL") and lower activity in our site remediation services compared to last year.
In 2018, LOGISTEC achieved a consolidated profit attributable to owners of the Company of $18.1 million, which is lower than the $27.4 million posted in 2017. The variation mainly stems from a decrease in our environmental services segment, due to a lower performance from FER-PAL as well as financial and transformational charges. In our marine services segment, we had good operating results, but were negatively affected by an impairment charge against our port logistics activities. Our EBITDA closed at $64.2 million, down from last year's $74.7 million.
The 2018 profit attributable to owners of the Company computes to total diluted earnings per share of $1.38, which corresponds to $1.32 attributable to Class A shares and $1.45 attributable to Class B shares.
During the fourth quarter of 2018, consolidated revenue totalled $168.7 million, an increase of $23.2 million or 16.0% over 2017. This increase is mainly due to strong activity in the environmental services segment during the fourth quarter of 2018 and to the business combinations of GSM and Pate. The profit attributable to owners of the Company stood at $3.4 million ($13.2 million in 2017) for diluted earnings per share of $0.26, of which $0.25 was attributable to Class A Common Shares and $0.27 was attributable to Class B Subordinate Voting Shares. The quarterly results were negatively affected by the same elements as discussed above, mostly a lower performance from FER-PAL as well as transaction, integration, financial, transformational charges and an impairment charge. For the same period of 2017, basic and diluted earnings per share totalled $1.01, of which $0.97 was attributable to Class A Common Shares and $1.06 was attributable to Class B Subordinate Voting Shares.
Outlook
"As we mark our 50th year as a public company, I am extremely proud of the resiliency of our organization. Over fifty years ago, we were a Québec company with 100% of our revenue generated in the marine industry in Québec. Today, we are a true North American player with an ideal mix of businesses and expanding markets. Exciting times lie ahead. With a clear strategic agenda, driven by a dynamic leadership team, I am confident that we will continue to solidify and build on our unique position," indicated Madeleine Paquin, President and Chief Executive Officer of LOGISTEC Corporation.
"In the marine services segment, the solid revenue performance of 2018 should continue in 2019, and we should benefit from a full year's impact of our 2018 business combinations. We also intend to review our port logistics activities to streamline and improve their returns.
In our environmental services segment, we expect both our Aqua-Pipe operations and traditional environmental activities at Sanexen to maintain their level of activity. We are addressing FER-PAL's poor performance in 2018 and expect better results in 2019 and beyond. The combined backlog for Sanexen and FER-PAL stands at some $100 million, which bodes well for 2019. We are also excited about our new exclusive Neofit technology for our drinking water infrastructure. This technology allows us to line lead drinking water pipes, thereby safeguarding residual drinking water. It has been estimated that over 500,000 lead service lines in the USA will need to be lined or replaced in the coming years.
Finally, with regard to business development, we remain very active in our research and analysis of investment opportunities in both our business segments, our objective being to maintain and improve our high quality of service and ensure the growth of our Company, for the benefit of our business partners and shareholders," concluded Madeleine Paquin.
About LOGISTEC
LOGISTEC Corporation is based in Montréal (QC) and provides specialized services to the marine community and industrial companies in the areas of bulk, break-bulk and container cargo handling in 37 ports and 61 terminals located in North America. LOGISTEC also offers marine transportation services geared primarily to the Arctic coastal trade as well as marine agency services to foreign shipowners and operators serving the Canadian market. Furthermore, the Company operates in the environmental sector where it provides services to industrial, municipal and other governmental customers for the trenchless structural rehabilitation of underground water mains, regulated materials management, site remediation, risk assessment, and manufacturing of woven hoses.
The Company has been profitable and has paid regular dividends since becoming public and payments have grown steadily over the years. A public company since 1969, LOGISTEC'S shares are listed on the Toronto Stock Exchange under the ticker symbols LGT.A and LGT.B. More information can be obtained on the Company's website at www.logistec.com.
Forward-Looking Statements
For the purpose of informing shareholders and potential investors about the Company's prospects, sections of this document may contain forward-looking statements, within the meaning of securities legislation, about the Company's activities, performance and financial situation and, in particular, hopes for the success of the Company's efforts in the development and growth of its business. These forward-looking statements express, as of the date of this document, the estimates, predictions, projections, expectations or opinions of the Company about future events or results. Although the Company believes that the expectations produced by these forward-looking statements are founded on valid and reasonable bases and assumptions, these forward-looking statements are inherently subject to important uncertainties and contingencies, many of which are beyond the Company's control, such that the Company's performance may differ significantly from the predicted performance expressed or presented in such forward-looking statements. The important risks and uncertainties that may cause the actual results and future events to differ significantly from the expectations currently expressed are examined under "Business Risks" in the Company's annual report and include (but are not limited to) the performances of domestic and international economies and their effect on shipping volumes, weather conditions, labour relations, pricing and competitors' marketing activities. The reader of this document is thus cautioned not to place undue reliance on these forward-looking statements. The Company undertakes no obligation to update or revise these forward-looking statements, except as required by law.
Additional information relating to our Company can be found on SEDAR's website at www.sedar.com and on LOGISTEC's website at www.logistec.com.
2018 CONSOLIDATED FINANCIAL STATEMENTS | ||
Consolidated Statements of Earnings | ||
Years ended December 31 | ||
2018 | 2017 | |
$ | $ | |
Revenue | 584,878 | 475,743 |
Employee benefits expense | (299,682) | (235,247) |
Equipment and supplies expense | (156,859) | (122,651) |
Rental expense | (46,028) | (33,799) |
Other expenses | (29,839) | (21,997) |
Depreciation and amortization expense | (28,580) | (33,859) |
Share of profit of equity accounted investments | 8,111 | 6,952 |
Other gains and losses | 3,596 | 4,875 |
Impairment charge | (6,821) | (2,917) |
Operating profit | 28,776 | 37,100 |
Finance expense | (8,046) | (3,937) |
Finance income | 572 | 404 |
Profit before income taxes | 21,302 | 33,567 |
Income taxes | (3,308) | (6,211) |
Profit for the year | 17,994 | 27,356 |
Profit attributable to: | ||
Owners of the Company | 18,060 | 27,426 |
Non-controlling interest | (66) | (70) |
Profit for the year | 17,994 | 27,356 |
Basic earnings per Class A Common Share (1) | 1.37 | 2.14 |
Basic earnings per Class B Subordinate Voting Share (2) | 1.51 | 2.35 |
Diluted earnings per Class A share | 1.32 | 2.02 |
Diluted earnings per Class B share | 1.45 | 2.22 |
(1) Class A Common Share ("Class A share") |
(2) Class B Subordinate Voting Share ("Class B share") |
Consolidated Statements of Comprehensive Income | ||
Years ended December 31 | ||
2018 | 2017 | |
$ | $ | |
Profit for the year | 17,994 | 27,356 |
Other comprehensive income (loss) | ||
Items that are or may be reclassified to the consolidated statements of earnings | ||
Currency translation differences arising on translation of foreign operations | 9,871 | (2,787) |
Unrealized loss on translating debt designated as hedging item of the net investment in foreign operations | (4,377) | — |
Gains (losses) on derivatives designated as cash flow hedges | (5) | 151 |
Income taxes relating to derivatives designated as cash flow hedges | 2 | (41) |
Total items that are or may be reclassified to the consolidated statements of earnings | 5,491 | (2,677) |
Items that will not be reclassified to the consolidated statements of earnings | ||
Remeasurement gains (losses) on benefit obligation | 1,850 | (1,515) |
Variation on retirement plan assets excluding amounts included in profit for the year | (1,637) | 830 |
Income taxes on remeasurement losses (gains) on benefit obligation and variation on retirement plan assets excluding amounts included in profit for the year | (41) | 151 |
Total items that will not be reclassified to the consolidated statements of earnings | 172 | (534) |
Share of other comprehensive income of equity accounted investments, net of income taxes | ||
Items that are or may be reclassified to the consolidated statements of earnings | — | 32 |
Items that will not be reclassified to the consolidated statements of earnings | 118 | (133) |
Total share of other comprehensive income (loss) of equity accounted investments, net of income taxes | 118 | (101) |
Other comprehensive income (loss) for the year, net of income taxes | 5,781 | (3,312) |
Total comprehensive income for the year | 23,775 | 24,044 |
Total comprehensive income (loss) attributable to: | ||
Owners of the Company | 23,805 | 24,114 |
Non-controlling interest | (30) | (70) |
Total comprehensive income for the year | 23,775 | 24,044 |
Consolidated Statements of Financial Position | ||
(in thousands of Canadian dollars) | ||
As at | As at | |
$ | $ | |
Assets | ||
Current assets | ||
Cash and cash equivalents | 15,393 | 3,963 |
Trade and other receivables | 160,252 | 153,342 |
Work in progress | 14,282 | 5,306 |
Current income tax assets | 2,964 | 494 |
Other financial assets | 416 | 1,055 |
Prepaid expenses | 4,483 | 2,775 |
Inventories | 10,711 | 11,550 |
208,501 | 178,485 | |
Equity accounted investments | 38,005 | 34,350 |
Property, plant and equipment | 179,225 | 160,717 |
Goodwill | 150,498 | 105,618 |
Intangible assets | 41,054 | 14,903 |
Non-current assets | 2,173 | 1,658 |
Post-employment benefit assets | — | 606 |
Non-current financial assets | 6,328 | 7,984 |
Deferred income tax assets | 11,319 | 9,218 |
Total assets | 637,103 | 513,539 |
Liabilities | ||
Current liabilities | ||
Short-term bank loans | 13,577 | 9,829 |
Trade and other payables | 97,845 | 85,174 |
Deferred revenue | 5,225 | 2,252 |
Current income tax liabilities | 3,480 | 3,699 |
Dividends payable | 1,973 | 1,075 |
Current portion of long-term debt | 3,294 | 5,447 |
Provisions | 823 | 813 |
126,217 | 108,289 | |
Long-term debt | 160,003 | 77,957 |
Provisions | 790 | 771 |
Deferred income tax liabilities | 21,465 | 15,575 |
Post-employment benefit obligations | 14,716 | 14,778 |
Deferred revenue | 3,333 | 3,733 |
Non-current liabilities | 46,190 | 61,641 |
Total liabilities | 372,714 | 282,744 |
Equity | ||
Share capital | 35,016 | 29,019 |
Share capital to be issued | 14,717 | 19,820 |
Retained earnings | 200,404 | 173,129 |
Accumulated other comprehensive income | 12,061 | 6,606 |
Equity attributable to owners of the Company | 262,198 | 228,574 |
Non-controlling interest | 2,191 | 2,221 |
Total equity | 264,389 | 230,795 |
Total liabilities and equity | 637,103 | 513,539 |
On behalf of the Board | ||
(signed) George R. Jones | (signed) Madeleine Paquin | |
Director | Director |
Consolidated Statements of Changes in Equity | |||||||||
(in thousands of Canadian dollars) | |||||||||
Attributable to owners of the Company | |||||||||
Accumulated other comprehensive | |||||||||
Share | Share | Cash | Foreign | Retained | Total | Non- | Total | ||
$ | $ | $ | $ | $ | $ | $ | $ | ||
Balance as at January 1, 2018 | 29,019 | 19,820 | 138 | 6,468 | 173,129 | 228,574 | 2,221 | 230,795 | |
Profit (loss) for the year | — | — | — | — | 18,060 | 18,060 | (66) | 17,994 | |
Other comprehensive income (loss) | |||||||||
Currency translation differences arising on translation of foreign operation | — | — | — | 9,835 | — | 9,835 | 36 | 9,871 | |
Unrealized loss on translating debt designated as hedging item of the net investment in foreign operations | — | — | — | (4,377) | — | (4,377) | — | (4,377) | |
Remeasurement gains on benefit obligation and variation on retirement plan assets excluding amounts included in profit for the year, net of income taxes | — | — | — | — | 172 | 172 | — | 172 | |
Cash flow hedges, net of income taxes | — | — | (3) | — | — | (3) | — | (3) | |
Share of other comprehensive income of equity accounted investments, net of income taxes | — | — | — | — | 118 | 118 | — | 118 | |
Total comprehensive income (loss) for the year | — | — | (3) | 5,458 | 18,350 | 23,805 | (30) | 23,775 | |
Put option liability | — | — | — | — | 15,644 | 15,644 | — | 15,644 | |
Repurchase of Class A shares | (10) | — | — | — | (174) | (184) | — | (184) | |
Issuance and repurchase of Class B shares | 904 | — | — | — | (1,195) | (291) | — | (291) | |
Issuance of Class B shares capital to a subsidiary shareholder | 5,103 | (5,103) | — | — | — | — | — | — | |
Other dividend | — | — | — | — | (776) | (776) | — | (776) | |
Dividends on Class A shares | — | — | — | — | (2,565) | (2,565) | — | (2,565) | |
Dividends on Class B shares | — | — | — | — | (2,009) | (2,009) | — | (2,009) | |
Balance as at December 31, 2018 | 35,016 | 14,717 | 135 | 11,926 | 200,404 | 262,198 | 2,191 | 264,389 | |
Balance as at January 1, 2017 | 15,618 | 24,898 | (4) | 9,255 | 151,616 | 201,383 | 1,798 | 203,181 | |
Profit (loss) for the year | — | — | — | — | 27,426 | 27,426 | (70) | 27,356 | |
Other comprehensive income (loss) | |||||||||
Currency translation differences arising on translation of foreign operations | — | — | — | (2,787) | — | (2,787) | — | (2,787) | |
Remeasurement losses on benefit obligation and variation on retirement plan assets excluding amounts included in profit for the year, net of income taxes | — | — | — | — | (534) | (534) | — | (534) | |
Cash flow hedges, net of income taxes | — | — | 142 | — | — | 142 | — | 142 | |
Share of other comprehensive income of equity accounted investments, net of income taxes | — | — | — | — | (133) | (133) | — | (133) | |
Total comprehensive income (loss) for the year | — | — | 142 | (2,787) | 26,759 | 24,114 | (70) | 24,044 | |
Repurchase of Class A shares | (4) | — | — | — | (243) | (247) | — | (247) | |
Issuance and repurchase of Class B shares | 327 | — | — | — | (959) | (632) | — | (632) | |
Issuance of Class B shares related to a business combination | 8,000 | — | — | — | — | 8,000 | — | 8,000 | |
Long-term liability for the obligation to repurchase a non-controlling interest | — | — | — | — | — | — | (50,089) | (50,089) | |
Non-controlling interest arising on a business combination | — | — | — | — | — | — | 50,582 | 50,582 | |
Issuance of Class B shares capital to a subsidiary shareholder | 5,078 | (5,078) | — | — | — | — | — | — | |
Dividends on Class A shares | — | — | — | — | (2,334) | (2,334) | — | (2,334) | |
Dividends on Class B shares | — | — | — | — | (1,710) | (1,710) | — | (1,710) | |
Balance as at December 31, 2017 | 29,019 | 19,820 | 138 | 6,468 | 173,129 | 228,574 | 2,221 | 230,795 | |
Consolidated Statements of Cash Flows | ||
Years ended December 31 (in thousands of Canadian dollars) | ||
2018 | 2017 | |
$ | $ | |
Operating activities | ||
Profit for the year | 17,994 | 27,356 |
Items not affecting cash and cash equivalents | 43,823 | 43,899 |
Cash generated from operations | 61,817 | 71,255 |
Dividends received from equity accounted investments | 4,596 | 3,637 |
Contributions to defined benefit retirement plans | (1,049) | (1,036) |
Settlement of provisions | (359) | (154) |
Changes in non-cash working capital items | 4,119 | (23,885) |
Income taxes paid | (10,037) | (6,021) |
59,087 | 43,796 | |
Financing activities | ||
Net change in short-term bank loans | 3,747 | 1,579 |
Issuance of long-term debt, net of transaction costs | 134,653 | 90,014 |
Repayment of long-term debt | (62,382) | (70,829) |
Interest paid | (7,241) | (2,822) |
Issuance of Class B shares | 562 | 201 |
Repurchase of Class A shares | (177) | (248) |
Repurchase of Class B shares | (1,349) | (1,043) |
Dividends paid on Class A shares | (2,505) | (2,279) |
Dividends paid on Class B shares | (1,947) | (1,638) |
63,361 | 12,935 | |
Investing activities | ||
Customer repayment of an investment in a service contract | — | 865 |
Interest received | 539 | 403 |
Cash acquired in a business combination | 2,501 | — |
Business combinations | (97,998) | (48,038) |
Repurchase of a non-controlling interest | — | (2,880) |
Investment in a joint venture | (157) | — |
Acquisition of property, plant and equipment | (16,131) | (21,965) |
Proceeds from disposal of property, plant and equipment | 1,416 | 2,473 |
Acquisition of intangible assets | (208) | (45) |
Repayment of non-current financial assets | 211 | 104 |
Increase of non-current assets | (286) | (805) |
Disposal of non-current assets | 215 | 191 |
(109,898) | (69,697) | |
Net change in cash and cash equivalents | 12,550 | (12,966) |
Cash and cash equivalents, beginning of year | 3,963 | 15,971 |
Effect of exchange rate on balances held in foreign currencies of foreign operations | (1,120) | 958 |
Cash and cash equivalents, end of year | 15,393 | 3,963 |
SOURCE Logistec Corporation
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