Genesee & Wyoming garners revenue, traffic gains in 2Q

Today, Genesee & Wyoming Inc. (GWI) announced second-quarter financial results that are consistent with the company's expectations, GWI officials noted in a press release.

Total operating revenue increased 3.5 percent to $141.6 million, adjusted diluted earnings climbed 10.9 percent to $12 per share, adjusted income from operations rose 2.6 percent to $110.4 million and volume increased 6 percent to 509,631 carloads compared with second-quarter 2013 results. Same-railroad traffic rose 5 percent.

"We maintained an operating ratio of 73.4 percent despite severe track washouts in Canada and the Southeast United States," said GWI President and Chief Executive Officer Jack Hellmann. "In North America, rail network congestion decreased and the economy remained relatively strong over the course of the second quarter, which resulted in a 7.1 percent growth in same railroad carloads. In Australia, our second-quarter carload traffic was down 9 percent; however, effective management of our costs resulted in an operating ratio of 69.2 percent."

Excluding decreases from the impacts of foreign currency depreciation, same-railroad freight revenue increased 5.8 percent to $311.8 million and same-railroad non-freight revenue decreased 2.2 percent to $97.3 million. Operating expenses rose 4 percent to $304.5 million.

GWI also engaged in three key initiatives in 2Q: launching operations at the Rapid City, Pierre & Eastern Railroad; completing the refinancing of a credit facility that now provides $625 million in total revolver capacity for acquisitions and investments, and reduces interest expense; and evaluating multiple acquisition and investment opportunities worldwide, said Hellmann.

Looking ahead, the North American business outlook remains favorable, but in Australia, a small iron-ore mine has announced plans to close temporarily due to both the low price of iron ore and permitting delays for a planned expansion, he said.

"As a result, we expect our revenues to decline by approximately $5 million over the remainder of the year," said Hellmann. "Based on discussions with the customer, the latter mine is expected to reopen in mid- to late 2015, although we believe this will be dependent on the global price of iron ore."