For Immediate Release
23-027
August 24, 2023

ANOTHER RECORD QUARTER FOR VEHICLE AND PASSENGER TRAFFIC

VICTORIA – BC Ferries released its results today for the three months ended June 30, 2023 and traffic hit another record high.
In the three months ended June 30, 2023, BC Ferries carried 5.8 million passengers and 2.5 million vehicles, an increase of 7 per cent and 3 per cent, respectively, compared to the same period in the prior year.

To meet increasing customer demand, BC Ferries has expanded its variable fare choices, which include advance purchase saver fares on its Major Routes, and has offered more space for customers to book prior to sailing. These incentives help provide customers with affordable travel options, while also enabling BC Ferries to achieve higher capacity utilization.

“This quarter we sailed a record number of round trips and moved more people and vehicles than ever before in our history. The vast majority, 98.6 per cent, of our sailings happened as planned,” said Nicolas Jimenez, BC Ferries President and CEO. “We’re actively hiring to address our crewing shortages, which will improve staffing resiliency and support reliable service for our customers. I want to thank our staff for their dedication, professionalism and most importantly, for keeping everyone safe in our terminals and on board our vessels during this very busy time.”

In the three months ended June 30, 2023, BC Ferries’ net earnings were $15.2 million, an increase of $7.3 million compared to net earnings of $7.9 million in the same period in 2022. This is primarily as a result of higher traffic volumes, tariff increases and higher net retail sales, partially offset by higher operating expenses.

In the three months ended June 30, 2023, BC Ferries’ revenues were $286.9 million, an increase of $22.0 million or 8 per cent, compared to the same period in the prior year, primarily due to higher vehicle and passenger traffic volumes and rates, net retail sales and fuel surcharges.

Operating expenses in the company’s first quarter increased by $18.5 million, to $260.6 million, up 8 per cent from the same period in the prior year. The increase is mainly due to the increased number of round trips with corresponding higher labour costs and fuel consumption, as well as higher wage rates, maintenance expenses and depreciation.

BC Ferries’ full financial statements, including notes, and Management’s Discussion and Analysis are filed on SEDAR and will be available at www.sedar.com.
   

FORWARD LOOKING STATEMENTS

This news release contains certain “forward looking statements”. These statements relate to future events or future performance and reflect management’s expectations regarding our growth, financial and business risks, results of operations, performance, business prospects and opportunities, and industry performance and trends. They reflect management’s current internal projections, expectations and beliefs, and are based on information currently available to management. Some of the market conditions and factors that have been considered in formulating the assumptions upon which forward looking statements are based include the impact of traffic trends, the value of the Canadian Dollar relative to the US Dollar, inflation, interest rates, fuel costs, construction costs and timelines, cyclical demand, the state of the economy, fluctuating financial markets, demographics, tax changes, the requirements of the Coastal Ferry Services Contract and the impact of the COVID-19 pandemic.

Examples of forward looking statements included in this news release include, but are not limited to, statements with respect to: revenue sources, the impact of variable fare choices, and staffing requirements, among other statements.

In some cases, forward looking statements can be identified by terminology such as “may”, “will”, “should”, “expect”, “plan”, “anticipate”, “believe”, “estimate”, “predict”, “potential”, “continue” or the negative of these terms or other comparable terminology. A number of factors could cause actual events or results to differ materially from the results discussed in the forward looking statements. In evaluating these statements, prospective investors should specifically consider various factors including, but not limited to, the risks and uncertainties associated with: vendor non-performance, capital market access, inflation, interest rates, foreign currency, fuel prices, traffic fluctuations, timelines of major capital projects, security, safety, and environmental incidents, cyber security breaches, changes in laws, vessel repair facility limitations, economic regulatory environment changes, tax changes, and Indigenous consultations.

Actual results may differ materially from any forward looking statement. Although management believes that the forward looking statements contained in this news release are based upon reasonable assumptions, investors cannot be assured that actual results will be consistent with these forward looking statements. These forward looking statements are made as of the date of this news release and British Columbia Ferry Services Inc. assumes no obligation to update or revise them to reflect new events or circumstances except as may be required by applicable law.
 

Non-IFRS Measures

In addition to providing measures prepared in accordance with IFRS, we present certain financial measures that do not have any standardized meanings prescribed by IFRS and therefore are unlikely to be comparable to similar measures presented by other companies. These include, but are not limited to, net earnings adjusted for the effect of rate regulation and average tariff revenue per vehicle and per passenger. These supplemental financial measures are provided to assist readers in determining our ability to generate cash from operations and improve the comparability of our results from one period to another. We believe these measures are useful in assessing operating performance of our ongoing business on an overall basis.

 

SIGNIFICANT EVENTS FIRST QUARTER

Significant events during the three months ended June 30, 2023 or subsequent to the period include the following:
 

General

• On February 26, 2023, the Province, after collaboration with BC Ferries and in response to our Performance Term Six submission, announced $500 million in new funding for BC Ferries, with the goal of limiting annual average fare increases to 3 per cent a year for Performance Term Six (“PT6”), April 1, 2024 through March 31, 2028. In addition to helping control fare increases, the $500 million, to be received during PT6, may also be used to support greenhouse gas emissions reductions through support for the electrification of vessels, terminals and other initiatives. The first priority, however, is to use the provincial contribution to help limit annual fare increases to 3 per cent.
   
• On April 12, 2023, BC Ferries implemented average tariff increases of 3 per cent in accordance with the British Columbia Ferries Commissioner’s (the “Commissioner”) Order 19-04 dated September 30, 2019 and in accordance with the Safe Restart Contribution Agreement between BC Ferries and the Province dated November 11, 2020, as amended.
   
• On June 30, 2023, the Coastal Ferry Services Contract (the “CFSC”), between BC Ferries and the Province, was amended for PT6 to, among other things, establish ferry transportation fees for the four year term of April 1, 2024 through March 31, 2028. The CFSC is a 60-year services contract, which commenced April 1, 2003, and stipulates, among other things, the number of round trips that must be provided for each regulated ferry service route in exchange for specified fees (ferry transportation fees). The CFSC has been amended from time to time. The CFSC and its amendments are available on our website at: https://www.bcferries.com.
   
• On July 7, 2023, the Commissioner released their consultant’s report, which informed her preliminary price cap determination for PT6. These documents can be found at: www.bcferrycommission.ca.
   
• On August 17, 2023, BC Ferries cancelled sailings on the route between Nanaimo and Vancouver due to a mechanical issue with the Coastal Renaissance vessel. The mechanical issue which is related to the drive motor of the vessel and not a simple repair, may result in the Coastal Renaissance being out of service for an extended period of time. Every effort is being made to manage resources to accommodate the traffic demand of this route and to minimize the impact to our customers.

 

Capital Assets

• On April 28, 2023, BC Ferries submitted a supplemental filing with the Commissioner to update the costs and revise some elements of the capital budget for the Fleet Maintenance Unit (“FMU”) project, which was originally approved on October 14, 2022. On May 12, 2023, the Commissioner issued supplemental Order 22-02A approving the project for the redevelopment of the FMU. On the same day, BC Ferries signed a construction agreement with Bird Construction Group for the redevelopment project.
   
• On June 7, 2023, BC Ferries submitted an application to the Commissioner seeking approval of a Major Terminal Efficiency (“MTE”) project aimed at transforming check-in and boarding processes for customers at our five major terminals (Duke Point, Tsawwassen, Horseshoe Bay, Departure Bay, and Swartz Bay). On July 28, 2023, the Commissioner requested additional information from BC Ferries which the Commissioner needs in order to reach a decision on the application. The MTE project application proposes how customers arriving at the terminals will benefit from reduced ticketing and check-in wait times; with foot passengers being provided a seamless, contactless journey through enhanced kiosks, fare gates and boarding pass validation; and an express lane check-in at the terminals for pre-paid reserved customers in vehicles.

  Media Contact:
BC Ferries, Communications
Victoria: (250) 978-1267

Customer Contact:
Victoria: (250) 410-1465
Toll-free: 1-888-BCFERRY (1-888-223-3779)