Rand Logistics, Inc. (NASDAQ:RLOG) net income in 2Q2017 amounted to $2.6 million. Freight and other linked revenue from firm operated vessels, which discounts fuel and other surcharges dropped $6.3 million in 2Q2017 against $43.8 million recorded in the same period, a year earlier. Total sailing days came at 1,185 against to 1,278 in the preceding period, mainly as an outcome of operating 2 fewer vessels in the reported quarter.
The highlights
Rand Logistics reported that delay days surged to 73 from 68. Delay Days as a fraction of total Sailing Days came at 6.2% against 5.3% in the comparable period last year. Ed Levy, the President and CEO, said that the results in 2Q2017 showed an unexpected drop in demand from aggregates clients, especially as it is related to components for use in public infrastructure assignments.
As per the Lake Carriers’ Association, the lakes-wide stone demand dropped 13.9% over the last quarter. The stone tonnage dropped by 12.1%. This, together with lower salt tonnage following higher than normal inventories coming from last year’s unusually mild and dry winter in the Great Lakes area, lead to in inefficiencies in trade network and triggered vessel margin per day to drop by nearly 4.4% against the comparable quarter, a year earlier.
The CEO of Rand Logistics added that to address these market conditions, they elected to minimize capacity by nearly 28 sailing days in July, which showed 2.4% of total sailing days in 2Q2017. Beginning in August, the company started to witness a steady growth in demand for specific commodities that the company carry.
In addition, the company were awarded numerous new pieces of activities that were not included in yearly estimate, which resulted in relaunching one of company’s vessels back into service in September. Based on October data, as well as the book of business for the sailing season and considering normal weather conditions, Rand Logistics project to sail nearly 3,500 days, a jump from the initial estimate of nearly 3,405 days. The company also expect that the earnings for the quarter closed December 31, 2016 will surpass the earnings recorded in same quarter last year.
