Quarterly profit up 16pc to US$782 million at Canada's biggest railway

CANADA's largest railway, the Canadian National (CN), has posted a 16 per cent increase in first quarter net profit to C$775 million (US$782 million) year on year drawn on revenues C$2.3 billion, which went up 13 per cent.

Revenue increases were also attributed to higher freight volumes, robust pricing and fuel surcharges. Carloads went up 5 per cent during the quarter year on year.

Metals and minerals brought in 31 per cent more revenue, coal, 18 per cent; intermodal, 17 per cent; petro-chemicals, 15 per cent; automotive, 13 per cent and forest products, 10 per cent.

Operating income surged 23 per cent to C$793 million, while the operating ratio was 66.2 per cent, a 2.8-point improvement over last year's first-quarter performance of 69 per cent.

Operating expenses for the first quarter increased by eight per cent to C$1.6 billion, mainly due to higher fuel costs as well as labour and fringe benefits expense. These factors were partly offset by lower casualty and other expenses.

Said CEO Claude Mongeau: "While CN benefited from a milder winter and improving economic conditions, our very solid first-quarter results underscore that our strategy is working. The CN team did well on all key fronts, delivering high-quality service while handling solid volume growth at low incremental cost."