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8/3/2004



Rail News: Financials

Genesee & Wyoming increases second-quarter earnings despite North American, Australian operational snags



During the second quarter, increasing coal traffic in Illinois, Utah, New York and Pennsylvania helped Genesee & Wyoming Inc. (GWI) offset high fuel prices and "difficult" operating conditions in the short-line holding company's Oregon region because of Class I congestion.

Today, GWI reported quarterly net income of $10.8 million, a 40.8 percent increase compared with second-quarter 2003. The company's quarterly revenue rose 17.7 percent to $74.1 million, operating income increased 25 percent to $13.6 million and North American operating ratio improved 0.5 points to 81.7.

"Our U.S. and Canadian regions have been experiencing considerable strength in their local industrial economies, resulting in 7.8 percent same railroad growth in the second quarter," said GWI Chairman and Chief Executive Officer Mortimer Fuller III in a prepared statement.

In Australia, GWI's half-owned subsidiary Australian Railroad Group (ARG) increased quarterly revenue 36.4 percent to $81.7 million compared with similar 2003 data. ARG's quarterly operating income rose 23.4 percent to $16.5 million, but the company's operating ratio worsened 2.2 points to 79.9.

"ARG's second-quarter earnings increased 63.1 percent due to strong grain and iron-ore shipments," said Fuller. "However, ARG has also been impacted by high fuel prices and incurred certain track maintenance expense in the quarter that will not recur for the rest of 2004."

During the year's first six months, GWI increased revenue 21 percent to $146.5 million, net income 53 percent to $20.3 million and operating income 34 percent to $25.1 million compared with similar 2003 data. The company's first-half operating ratio improved 1.7 points to 82.8.

However, first-half operating expenses rose 18 percent to $121.3 million compared with last year.


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