January 23, 2021 - TRA Newswire -



Two developments this week for Kansas City Southern (KCS) (NYSE:KSU) made news.



The company reported strong fourth quarter and full year 2020 results, despite significant operating and economic challenges and announced it has entered into a joint agreement with NorthPoint Development to develop the master planned Wylie Logistics Park in Wylie, Texas, located adjacent to KCS’ David L. Starling Wylie Intermodal Terminal.



Fourth Quarter 2020



Fourth quarter revenues were $693.4 million, a decrease of 5% primarily due to lower volumes related to a service interruption at Lazaro Cardenas due to teachers' protests, lower fuel surcharge and fluctuations in foreign currency. Fourth quarter operating expenses were $431.1 million. Operating income was $262.3 million and the reported operating ratio was 62.2%. Fourth quarter net income was $166.3 million, or $1.80 per diluted share. Adjusted fourth quarter operating income, operating ratio, net income and diluted earnings per share were as follows:



"Despite several significant challenges in the fourth quarter, including continued impacts from the pandemic, weather events and an extended outage from illegal protests on segments of our network in Mexico, KCS delivered strong fourth quarter results," stated president and chief executive officer, Patrick J. Ottensmeyer. "Thanks to the hard work and dedication of our employees, we are overcoming the adversity that we faced in the fourth quarter and throughout 2020, and we heighten our focus on Precision Scheduled Railroading (PSR)-driven service improvementsto realize the significant growth opportunities that we see going forward."



Full Year 2020



Full year 2020 revenues were $2.6 billion, a decrease of 8% on a 6% decline in carloads. Operating income was $1.0 million and the reported operating ratio was 61.9%. Full year 2020 net income was $619.1 million, or $6.54 per diluted share. During 2020, the KCS network experienced a rapid decline in volumes followed by an unprecedented volume rebound, forcing the Company to quickly adjust its service model to match customer demand while optimizing its cost structure. These actions resulted in significant improvements to train length and fuel efficiency, improving 12%and 5%, respectively. PSR initiatives also contributed directly to operating expense savings of $96 million in 2020, and are projected to deliver incremental savings of $50 million in 2021.



"As we turn our focus to 2021, our primary objective will be the implementation of PSR Phase 3, which combines improved operational performance with an intense focus on customer service and revenue growth,” stated Ottensmeyer. "Phase 3 of PSR will help us capitalize on the unique growth opportunities available across our franchise. "These growth opportunities, combined with an intense focus on excellent execution, give us confidence to reinstate a multi-year outlook, which has improved from the guidance provided a year ago. We look forward to deliveringanother year of strong returns to shareholders.”



Along with earnings results, KCS has issued the following financial outlook:Revenue Growth: Double-digit growth in 2021Operating Ratio: ~57.5% in 2021, Between 55% - 56% in 2022Earnings per Share $9.00 or better in 2021, Between $10.50 - $11.00 in 2022Capital Expenditures ~17% of revenue in 2021 & 2022Free Cash Flow ~$700M in 2021 & 2022



Kansas City Southern (KCS) (NYSE: KSU) announced today that it has entered into a joint agreement with NorthPoint Development to develop the master planned Wylie Logistics Park in Wylie, Texas, located adjacent to KCS’ David L. Starling Wylie Intermodal Terminal.



Wylie Logistics Park



In other important news, KCS Said that the Wylie Logistics Park will offer 2.4 million square feet of potential building capacity for traditional warehousing and distribution; industrial grade amenities; dual feed electrical system with redundant power; as well as a heavy-haul road network comprised of direct access to Highway 78 and the interstate system, air and seaports, and a state-of-the-art intermodal terminal.



“KCS is pleased to enter into this agreement with NorthPoint Development for the Wylie Logistics Park,” said KCS vice president chemical and energy products Ginger Adamiak, who also leads the company’s industrial development team. “Wylie is part of the Dallas metro area, the fourth fastest growing industrial market in the U.S., and Wylie offers a business-friendly environment, low taxes and a double free port exemption.”



"We are extremely bullish on the opportunities that the Wylie Logistics Park offers,” said NorthPoint Development president/founding partner Chad Meyer. “Wylie is a supportive, pro-business municipality partnering with a unique Class I intermodal facility that has the best direct connectivity to the growing east coast ports. Couple this with exceptional demographics from an eCommerce demand and the great labor pool that this development requires and you have all of the ingredients for a very successful project."



KCS’ Wylie Intermodal Terminal opened in 2015 and expanded in 2018. It now offers track capacity of 19,000 feet and annual lift capacity of 342,000, resulting in fluid and efficient availability of containers and improved on-time arrivals and departures. The terminal also boasts 1,800-wheeled parking spaces (with room to expand); 300 container stack spots; an Automated Gate System (AGS) with high definition imagery; optical character recognition and biometric driver identification; enhanced traffic signals and specific turn lanes.



“The Wylie Logistics Park is ideal for customers looking to combine logistics and real estate in one location,” said KCS vice president intermodal and automotive Rodrigo Flores. “Locating in the park will provide tenants and customers significant cost savings by reducing drayage from ramp to facility and providing quick access to the regional interstate network. Customers will also enjoy the environmental benefits of intermodal transportation and connectivity to other intermodal and port facilities on KCS’ U.S. and Mexico rail network.”