Titanium Transportation (TSX-V:TTN) reported steep drops in revenue and profits in its second quarter as the Canadian cross-border transportation and logistics company weathered a weaker freight market.
Titanium eked out a profit of C$0.5 million, or C$0.01 per share, on revenue of C$42 million (a Canadian dollar equals US$0.76). The results, released on August 13, represented declines of about 77 percent in net income and nearly 19 percent in revenue compared to the second quarter of 2018.
Revenue originating in the United States fell more dramatically during the quarter – by about 29 percent to C$17 million. Canadian revenue dropped by nearly 10 percent compared to the second quarter of 2018, to C$24.9 million.
“Despite a more challenged operating environment, we remained profitable in the second quarter of 2019 and continued to build long-term shareholder value,” CEO Ted Daniel said in a statement.
Earnings before taxes and other expenses (EBITDA), which omits C$2.2 million in capital expenses, fell by nearly 32 percent to C$4.9 million.
The Ontario-based firm’s logistics business had a particularly weak quarter. Revenue fell by 36 percent to C$14.9 million, while its EBITDA dropped by 73.1 percent to C$0.7 million.
The trucking business held up relatively well during the quarter. It generated C$28.6 million in revenue in the quarter, a 4 percent drop from a year ago, while trucking EBITDA declined by 11 percent to C$4.5 million.
On a more positive note, Titanium said its new U.S.-based brokerage, in Charlotte, North Carolina, “already exceeded internal revenue projections,” though it did not provide specific figures.
Daniel said the weaker market may create opportunities for acquisitions.
“Significant overcapacity and lower spot rates in the marketplace have improved the landscape for opportunistic and accretive M&A,” Daniel said.
After reporting weaker first-quarter results in May, Daniel told analysts that he expected stable growth through the rest of 2019.
Titanium will discuss its second quarter results with analysts tomorrow, August 14.
