Alaska Railroad posts revenue gains in 2019

Alaska Railroad Corp. (ARRC) yesterday released its 2019 financial results, logging net income of $21.6 million, a 7.5 percent increase from 2018 net income. 

In a 2019 annual report, company officials described the year as "pivotal," with financial statements telling a "turnaround story."

Operating income rose to $4.7 million in 2019 from $1.5 million in 2018, and the ARRC posted an operating ratio of 0.97 for the year, ARRC officials said in a press release.

The year was particularly good for freight, which generated 42 percent of the railroad's total revenue. Freight revenue came in at $85.3 million — the best since 2014 and nearly $14 million more than the railroad reported in 2018, company officials said.

ARRC's rail-barge business between Seattle and Whittier contributed the most, with growth driven in large part by oil and gas activity on the North Slope, they added.

Meanwhile, on the passenger side of railroad operations, natural disaster service disruptions did not slow revenue growth, company officials said. The ARRC posted $39.6 million in passenger revenue, up from $38.99 million in 2018. Ridership in 2019 remained above the half-million mark, with 522,101 passengers.

Also contributing to the company's bottom line in 2019 was its real estate business, which contributed $14.04 million, up from $13.03 million in 2018. Several real estate transactions that began in 2018 and were completed in 2019 drove economic opportunity along the rail belt. Those actions fostered potential income in home construction, marine service, tourism and community infrastructure, ARRC officials said.

"Throughout the year, we prepared for growth in areas of greatest potential and need, pumping railroad dollars into projects that could open economic doors," they said. "These investments ranged from building road access to bolster community and business development in Anchorage; to completing rail infrastructure in support of a new Anchorage-Fairbanks fuel distribution system; to pursuing a public-private partnership to replace the passenger dock and terminal in Seward."

Looking ahead, the COVID-19 pandemic has thrown uncertainty into the mix.

"We recognize COVID-19 is weighing heavily on the global economy, and the railroad is responding with the ingenuity and durability that are our hallmarks," said President and Chief Executive Officer Bill O'Leary. "Whatever the outcome of COVID-19, one thing is certain. The Alaska Railroad is stronger for the gains, triumphs and investments made during 2019."

ARRC officials remain "realistic and optimistic that the railroad can bank on that strength, foster growth where it is most plausible and help fellow Alaskans weather the challenges ahead," O'Leary added.