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Rail News: Short Lines & Regionals

Genesee & Wyoming reports strong 2Q financial results, announces pact with Canadian iron-ore miner


Today, Genesee & Wyoming Inc. (GWI) reported total second-quarter operating revenue of $217.4 million, up 3.7 percent compared with second-quarter 2011.

Same-railroad revenue inched up 0.7 percent to $147.8 million, net income climbed 17 percent to $36.4 million, operating income jumped 24 percent to $62.5 million, diluted earnings per share rose 15 percent to 84 cents, operating expenses dropped 2 percent to $154.9 million and GWI’s operating ratio declined 4.3 points to 71.3.

“GWI’s business continued to perform well in the second quarter, as revenues were in line with our expectations … and our adjusted operating ratio improved by 0.9 percentage points to 75.5,” said GWI President and Chief Executive Officer Jack Hellmann in a prepared statement. “In our North American and European operations, despite weakness in our U.S. coal traffic, we maintained an adjusted operating ratio of 75.8. In our Australian operations, the reopening of the Edith River Bridge significantly improved traffic flow to Darwin, and our second-quarter adjusted operating ratio improved to 74.9.”

Among the few lowlights in the quarter, volume tumbled 6.9 percent to 232,315 units and same-railroad non-freight revenue was flat at $62.8 million.

GWI also announced that newly formed subsidiary KeRail Inc. entered into a long-term agreement with Tata Steel Minerals Canada Ltd. (TSMC) to provide transportation services for an iron ore mine TSMC is developing near Schefferville, Quebec, in the Labrador Trough.

KeRail also will construct a 13-mile line to connect the mine to a Tshiuetin Rail Transportation interchange point in Schefferville. The mine is projected to produce 4.2 million tons of iron ore annually.
Via three privately owned railways, KeRail will haul unit trains of iron ore from the mine connection to the Port of Sept-Iles for export primarily to TSMC’s European operations, GWI officials said. The agreement and line construction is contingent on certain conditions, including necessary government permits and approvals. Track construction is anticipated to begin in the third or fourth and take three to six months to complete.
“The new contract with TSMC will further expand GWI’s operating presence in the Labrador Trough, where GWI subsidiary Western Labrador Rail Services currently provides rail services to both Cliffs Natural Resources Inc. and Labrador Iron Mines Holdings Ltd.,” GWI officials said.

With the addition of KeRail, GWI now owns and operates 66 regionals and short lines in the United States, Australia, Canada, Netherlands and Belgium.

Contact Progressive Railroading editorial staff.

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