CANADIAN National (CN) has reported a 7% fall in annual revenue in 2020 to $C 13.8bn ($US 10.8bn), compared with $C 14.9bn in 2019, due to lower applicable fuel surcharge rates and a fall in freight volumes across most commodity groups due to the coronavirus pandemic.
The impact was felt most during the second and third quarters with a partial recovery later in the year. Revenues for the fourth quarter of 2020 rose 2% year-on-year compared with the same period in 2019, to $C 3.7bn.
CN attributes fourth-quarter revenue to increases in grain shipments in the United States and Canada, higher levels of international containerised freight traffic via the Port of Vancouver, and freight rate increases, partly offset by lower applicable fuel surcharge rates and lower volumes of petroleum crude.
Operating income fell by 15% to $C 4.8bn in 2020, compared with $C 5.6bn in 2019, with an operating ratio for the year of 65.4%, increasing by 2.9 points compared with the previous year.
However, operating income for the fourth quarter rose 16% compared with the same period in 2019, to $C 1.4bn, with an operating ratio of 61.4%, again reflecting CN’s partial recovery from the impact of the Covid-19 pandemic during the latter part of the year.
Total revenue tonne-km declined by 5% in 2020 compared with 2019, including a fall of 2% in freight revenue per tonne-km. However, revenue tonne-km was up 10% year-on-year in the fourth quarter, and wagonloads were up by 7%.
“While the recovery remains uneven across the markets we serve, we are pleased by the momentum in volume demand that grew during the fourth quarter and continues to grow,” says CN’s president and CEO, Mr Jean-Jacques Ruest. “Our operations remained very nimble in the fourth quarter as we right-sized to meet the increased demand while we maintained industry leading fuel efficiency.”
CN reports a positive outlook for 2021, and projects mid-single-digit volumes of growth in revenue tonne-km for the year despite continuing weaknesses in parts of the freight sector.
“While the recovery remains uneven across the markets we serve, we are pleased by the momentum in volume demand that grew during the fourth quarter and continues to grow,” Ruest says. “We are increasingly optimistic about 2021 and we are reinstating our full-year financial outlook. We are also pleased to be announcing our plans for $C 3bn of capital investments to stay ahead of the demand and keep meeting our customers' needs through safe and efficient operations.”
