CN Rail Credits BC Rail Acquisition With Strong Year-End Showing

By 250 News

A CN train rolling northbound into the Prince George rail yard

Canadian National Railways has announced its financial and operating results for the 4th quarter and full year-end results for 2005.

Net income for the 4th quarter was up 14-percent over the same period in 2004 to 720-million dollars, while the year-end figure was up 24-percent over last year to 1.5-billion dollars.

CN President and CEO, Hunter Harrison, says he's delighted by the company's stellar performance.  Looking back on 2005, Harrison says, "It's clearly one of the best years this organization has ever had -- we saw some solid gains from the smart acquisitions that we've made in the past.  Clearly, the integration of B.C. Rail and Great Lakes Transportation added additional strength."

Chief Financial Officer, Claude Mongeau, says there were three basic ingredients that led to such a banner year:
1.  quality, top-line growth
2.  strong cost control measures
3.  an aggressive share buy-back plan

Mongeau says, "Our overall expenses were essentially flat.  Very, very good cost-control across the board, particularly labour expenses, which were down...on the strength of our workforce reduction of five-percent."  

But there was a hint the tight measures may be impacting the railway, as he says, "You have to give credit to the team of railroaders who were able to deliver that performance in a year that had some issues, particularly on the safety side."

Mongeau says the longer term reduction in the workforce will be in the two- to three-percent range, annually.

Looking ahead to 2006, Executive Vice-President of Sales and Marketing, James Foote, says he expects the momentum from last year to continue.  Foote says forest product shipments were up 12-percent, with brisk business being done by forest companies in B.C. and he says CN is positioning itself to meet that growing demand.

"We have more lumber and and panel capacity coming on-line in Western Canada to handle additional log cuts associated with the beetle kill, the new Canfor/Louisiana Pacific OSB plant opening up, and Canfor, West Fraser, and Tolko bring on additional lumber-cutting capacity."

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