Canadian Pacific: investment in rail and locomotives

Redacción Opportimes 11 marzo, 2022

Las inversiones de Canadian Pacific en rieles, locomotoras otros gastos de capital sumaron 1,551 millones de dólares canadienses en 2021. Canadian Pacific's investments in rail, locomotives and other capital expenditures totaled CAD1,551 million in 2021. — Photo: Canadian Pacific.

Canadian Pacific Railway Limited’s investments in rail, locomotives and other capital expenditures totaled CAD1,551 million in 2021.

Such amount was 8.1% lower compared to its 2020 benchmark and 6.8% lower compared to 2019.

For starters, additions of $970 million in 2021 (2020: $1,161 million), approximately $907 million (2020: $1,008 million) were spent on refurbishing depleted assets, namely rail, sleepers, ballast, signals, and bridges.

Additionally, Canadian Pacific spent approximately $10 million (2020: $25 million) on positive train control compliance requirements and invested $53 million (2020: $128 million) on network improvements and growth initiatives.

In 2021, its locomotive spending was $121 million (2020: $126 million) and focused on continued reinvestment in Canadian Pacific’s existing locomotive fleet.

Railcar investment of about $176 million (2020: $127 million) focused primarily on refurbishing depleted assets, including the acquisition of covered grain hoppers.

Canadian Pacific

Also in 2021, the company invested $47 million (2020: $45 million) in information systems software focused primarily on streamlining and improving business systems and providing real-time data.

Ultimately, building investments were $105 million (2020: $103 million) and included items such as facility upgrades, renovations, and store equipment.

Other items totaled $132 million (2020: $126 million) and included investments in containers, work equipment, and vehicles.

By 2022, Canadian Pacific expects to invest $1.55 billion in its capital programs, which will be funded by cash generated from operations.

Approximately 60-70% of planned capital programs are for roads and highways.

The company projects that 15-20% will be allocated to rolling stock, including rail cars and locomotive upgrades.

Likewise, the company expects that 5% will be assigned to information services and another 5% to buildings, while the category of other investments would have a coverage of 5 to 10 percent.

Free Cash

Canadian Pcific generated positive Free cash of $1,793 million in 2021, an increase of $636 million, or 55%, from $1,157 million in 2020. This increase was primarily due to an increase in cash provided by operating activities, before the Merger termination fee and Acquisition-related costs from KCS, and lower capital additions.

The company generated positive Free cash of $1,157 million in 2020, a decrease of $200 million, or 15%, from $1,357 million in 2019. This decrease was primarily due to a decrease in cash provided by operating activities.