CN Rail replaces CEO in bid for greater ‘speed’
in a statement. The railroad didn’t elaborate on Jobin’s exit or compensation he may be owed. Canadian National didn’t provide his age, though it listed him as 58 in a filing on March 7, 2017. The shares rose .21 per cent to $97.22 in Toronto, leaving them down 5.4 per cent this year.
Jobin ascended to the top post when CEO Claude Mongeau retired because of health reasons. Jobin, previously the railroad’s chief financial officer, had taken over on an interim basis less than a year earlier while Mongeau was on medical leave.
The carrier’s shares returned only about 30 per cent under Jobin’s leadership. That trailed the 37-per-cent total return for smaller rival Canadian Pacific Railway Ltd. and a subindex of Canadian industrial stocks. Canadian National’s stock has been the worst performer this year among North America’s publicly traded railroads.
And the carrier’s operating ratio, a benchmark of efficiency, worsened almost four percentage points in the fourth quarter. As a result, last year was the first time in more than two decades that Canadian National didn’t top rival Canadian Pacific in the measure.
Halliburton blamed Canadian National last month for halting new shipments of sand needed to produce oil and gas from shale formations through hydraulic fracturing. Another customer, Emerge Energy Services, shifted some shipments of fracking sand to BNSF Railway Co., the railroad owned by Warren Buffett’s Berkshire Hathaway Inc.
“This news will likely be a surprise for all investors,” Jason Seidl, a Cowen & Co.
The International Energy Agency says crude-by-rail shipments in Canada are expected to more than double over the next two years, as a lack of pipeline capacity forces producers to look to alternatives.
The Paris-based IEA forecasts in its latest oil markets report that crude-byrail exports will grow from 150,000 barrels a day in late 2017 to 250,000 barrels a day this year — and then to 390,000 barrels a day in 2019.
The IEA says shipments could peak as analyst, said in a note to clients. “This announcement, along with operational issues in the first quarter, should keep near-term pressure on shares.”
He said he wouldn’t be surprised if Ruest, “a seasoned rail veteran,” became permanent CEO. high as 590,000 barrels a day in 2019 if producers don't resort to crude storage in peak months.
The shipments are significantly higher than the record high of 179,000 barrels a day reached in September 2014, before oil prices collapsed.
The IEA says rail shipments are expected to return to around the 170,000barrel-a-day level in 2020, assuming Enbridge Inc. successfully expands its Mainline pipeline system.
Vowing to fix its service problems, Canadian National is boosting its 2018 capital-spending budget to a record $3.2 billion and hiring about 400 conductors in the first quarter alone. The company in December said it would buy 200 locomotives.