KCS registers an 8.1% drop in its revenues

Kansas City Southern (KCS) reported an 8.1% year-on-year decline in its 2020 revenue on Friday, to $ 2.632 billion.

Covid-19 costs increased total expenses for the year ended December 31, 2020 by approximately $ 10.0 million, primarily due to wages paid to certain high-risk employees who were allowed to stay home accordingly. under a Mexican presidential decree, they were symptomatic or quarantined, as well as expenses related to cleaning and decontamination of locomotives and other workspaces, and costs of protective equipment for KCS employees.

KCS believes that it has a strong liquidity position to continue business operations and pay its debt obligations.

At the end of last year, the company had total available liquidity of $ 788.2 million, consisting of available cash and a revolving line of credit, compared to available liquidity as of December 31, 2019 of $ 748.8 million. Additionally, KCS has no debt maturities until 2023.

KCS

During the year ended December 31, 2020, the company did not significantly alter the terms of its freight agreements with customers.

Cash flows from operations remain strong, according to the company itself; however, planned capital expenditures were reduced by $ 75.0 million, resulting in annual capital expenditures of $ 410.2 million in 2020.

KCS: Financial Indicators

If the Company were to experience another significant reduction in revenue, it would have additional alternatives to maintain liquidity, including decreases in capital expenditures and cost reductions, as well as adjustments to its capital allocation policy.

To date, KCS has not reduced or suspended its share buyback or dividend payment program.

Profile

Kansas City Southern is a partnership with national and international rail operations in North America that are strategically focused on the growing north/south freight corridor that connects key commercial and industrial markets in the central United States with major industrial cities in Mexico.

KCS controls and owns all shares of The Kansas City Southern Railway Company (KCSR), a Class I railroad in the United States founded in 1887.

KCSR serves a 10-state region in the Midwest and Southeastern regions of the United States and has the shortest north/south rail route between Kansas City, Missouri and several key ports along the Gulf of Mexico in Alabama, Louisiana, Mississippi and Texas.

KCS controls and owns all the shares of Kansas City Southern de México (KCSM). Through its 50-year concession from the Mexican government, which could expire in 2047 unless extended, KCSM operates a key commercial corridor of the Mexican rail system and its main route is between Mexico City and Laredo, Texas.

Laredo is the main international gateway through which a substantial portion of the train and truck traffic between the United States and Mexico crosses the border.