Canada’s largest ferry operator, Victoria, B.C., headquartered BC Ferries, today released its results for the fiscal year ended March 31, 2021 (fiscal 2021). Not surprisingly, the results reveal that the COVID-19 had a significant impact on the company’s operations and financial performance.
During the year, BC Ferries carried 13.1 million passengers and 6.7 million vehicles, a decrease of 40% and 24 percent, respectively, compared to the fiscal year ended March 31, 2020 (fiscal 2020).
In December 2020, BC Ferries received C$308 million through the Safe Restart Program, a federal-provincial initiative intended to help provinces and territories safely restart their economies.
BC Ferries now expects financial results to continue to improve, in part due to the Safe Restart funding and as the provincial economy recovers from the effects of the pandemic. The company remains optimistic that traffic will begin to return as more travelers become vaccinated and as travel restrictions are eased.
“We recognize the vital contributions from the federal and provincial governments with the Safe Restart funding, which we have used to continue to provide a safe and reliable ferry service for British Columbians who need to travel, as well as ensuring the delivery of essential goods to Vancouver Island and to rural and remote communities,” said Mark Collins, BC Ferries’ President and CEO. “This funding has also helped us to protect the long-term viability of the coastal ferry service.”
In the year ended March 31, 2021, net earnings were C$ 21.0 million, a decrease of C$ 7.8 million compared to net earnings of C$ 28.8 million in the prior year. This reflects BC Ferries’ recognition of C$ 186.0 million from the C$ 308 million in Safe Restart funding received this fiscal year. Without the C$ 186.0 million in Safe Restart funding – recognized as revenue – the net loss for the year would have been C$ 165.0 million.
Inclusive of the Safe Restart funding, revenues decreased by C$ 76.1 million, or 8.1 per cent in fiscal 2021 compared to the prior year. Without the revenue contributed by Safe Restart funding, fiscal 2021 total revenues would have decreased by C$262.1 million to C$679.3 million, or 27.8 per cent lower than in fiscal 2020.
In response to the impact of COVID-19 on ferry operations, BC Ferries reviewed all spending and reduced its operating expenses in fiscal 2021 by C$76.3 million or 8.9 percent – to C$779.8 million from C$856.1 million in the previous year. The reduction was mainly due to reduced round trips on the major routes and the deferral of certain discretionary costs. The expense reduction includes reduced labor costs, fuel consumption, contracted services, depreciation expense and other miscellaneous costs.
Capital expenditures for the year ended March 31, 2021 totaled C$122.0 million, down from C$238.1 million the prior year and down significantly from BC Ferries’ pre-pandemic capital plan. Despite the pandemic, significant investments continued to be made and included four battery-electric hybrid Island Class vessels and one liquefied natural gas fueled Salish Class vessel that were already under construction.
In response to pandemic-related reductions in traffic, BC Ferries deferred more than C$100 million of capital spending beyond fiscal 2021. The company continues to review and adjust both operating and capital plans as appropriate to reduce costs and responsibly defer spending to preserve cash while operating a safe, reliable and sustainable service.
BC Ferries is one of the largest ferry operators in the world based on passengers transported annually and transportation infrastructure. It provides frequent year-round ferry transportation services to the west coast of Canada on 25 routes, currently supported by 35 vessels and 47 terminals, and also manages other remote routes through contracts with independent operators.