Algoma Central Corp. doubles its profits

Algoma Central Corp., owner of Station Mall, Station Tower, 289 Bay Street, Station 49, the Waterfront Holiday Inn, and a fleet of boats that ply the St. Mary's River and other waterways, has some good news tonight for the financial markets.

The company announced it made a $23,915,000 profit last year, more than double the $11,739,000 profit it posted in the previous year.

Fourth-quarter earnings totalled $6,364,000, compared to a paltry $37,000 for the same quarter in 2003.

The following is excerpted from a news release issued tonight by Algoma Central Corp:

*********************** Net earnings for the twelve months ended December 31, 2004 increased from $11,739,000 or $3.02 per share in 2003 to $23,915,000 or $6.15 per share in 2004.

The increase of $12,176,000 was primarily the result of the following:

- increase in earnings of the ocean-going fleet due mainly to a combination of increased operating days due to fewer dry-docking days in 2004, reduced interest expense due to the 2003 refinancing and increased revenue due to strong demand for ocean self-unloaders

- increase in earnings of our tanker fleet due primarily to an increase in operating days and gains on the sale of vessels

- an increase in income tax expense in 2003 which we did not have in 2004 of $5,800,000 relating to an announcement by the Ontario government to increase the provincial corporate income tax rate from 12.5% to 14% effective January 1, 2004 and to defer future corporate tax rate decreases that were previously announced by the former Ontario government

The above increases were partially offset by a decrease in the operations of our domestic dry bulk fleet due mainly to increased costs. Net earnings for the quarter ended December 31, 2004 was $6,364,000 or $1.64 per share, an increase of $6,327,000 or $1.63 per share over the same period last year.

Of this increase, $5,800,000 or $1.49 per share was due to the income tax adjustment explained above. During the fourth quarter, the Corporation, through a wholly-owned subsidiary, purchased for cash consideration of U.S.$28 million a 100% interest in an ocean-going self-unloading vessel, the M.V. Bahama Spirit from Marbulk Shipping Inc.

Marbulk Shipping Inc. is owned 100% by Marbulk Canada Inc. which in turn is 50% owned by the Corporation.

The M.V. Bahama Spirit has a carrying capacity of 44,000 tonnes and currently operates on the East Coast of North America moving aggregates.

The Corporation also entered into a Memorandum of Agreement to purchase the M.T. Aggersborg, a 1998 built double-hulled petroleum products tanker, from Borg Tankers II Limited, Bermuda and operated by Dannebrog Rederi AS of Copenhagen, Denmark.

The expected delivered cost to Canada is approximately $42 million.

The transaction is expected to close late in the 1st quarter or early in the 2nd quarter of 2005.

The vessel is currently trading in the Arabian Gulf/Indian Ocean area and will be repositioned to the East Coast of Canada to join the Algoma Tanker fleet once the transaction is completed. In addition, the M.T. Gemini was purchased on February 14, 2005 for U.S. $2.3 million and will be transferred to Canadian flag.

The former U.S. flagged Gemini was owned by Cleveland Tankers (1991) Inc. of which the Corporation had a 25% ownership interest. On January 19, 2005, the Board of Directors declared a dividend of $0.25 per common share payable on Tuesday, March 1, 2005 to shareholders of record on Tuesday, February 15, 2005.

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