CALGARY, ALBERTA, CANADA — Canadian Pacific (CP) faced 2021 with “grit and tenacity,” an approach that helped the railway deliver solid earnings and revenue growth in the fiscal year.

Net income at CP in the year ended Dec. 31, 2021, totaled C$2.85 billion, equal to C$4.20 per share on the common stock, up 17% from C$2.44 billion, or C$3.61 per share, in fiscal 2020. Revenues also improved, climbing 3.7% to C$7.99 billion from C$7.71 billion.

The full-year results were in contrast to a fourth quarter that was held in check by catastrophic flooding in British Columbia followed almost immediately by cold temperatures, weather events that CP executives said serve as a reminder that railroading is an outdoor sport.

Net income in the fourth quarter ended Dec. 31 was C$532 million, or C$0.74 per share, down 34% from C$802 million, or C$1.19 per share, in the same period a year ago. Revenues were virtually flat, at C$2.04 billion compared with C$2.01 billion

“Grain volumes were down 21% in the quarter, while revenues were down 12%,” said John K. Brooks, executive vice president and chief marketing officer, in a Jan. 27 conference call with analysts. “As expected, the 40% reduction in the Canadian crop is driving this decline in volumes. The good news is we’ve taken the decline in the Canadian grain crop and created an opportunity. We had an all-time record quarter and year for our US grain franchise with 30% year-over-year RTM growth.

“As an example, the team worked extremely hard with our shippers and receivers to create a new supply chain to offset some of the challenges in Canada by moving US corn into Canadian cattle feed lots to supplement the shortage of domestic feed. We expect the challenges in Canadian grain to persist until we get the new crop in Q3. We will start to get some better visibility into the potential of the 2022 crop in the spring, but we are certainly happy to see snow on the ground across the prairies, providing much needed moisture.”

At the end of 2021 CP completed the acquisition of Kansas City Southern in a transaction valued at approximately $31 billion. Under terms of the transaction, KCS stockholders will receive 2.884 CP common shares and $90 in cash for each share of KCS common stock held and $37.50 in cash for each share of KCS preferred stock held. Following the closing of the transaction, the shares of KCS were placed into a voting trust with Dave Starling, former president and chief executive officer of KCS. Starling has been appointed the “voting trustee.” The Voting Trust, which ensures KCS will operate independently of CP, will remain in effect until the US Surface Transportation Board (STB) issues its decision on the companies’ joint railroad control application.

If approved by the STB, the transaction would create Canadian Pacific Kansas City Ltd. (CPKC), the only single-line railroad linking the United States, Mexico and Canada. The STB review of CP’s proposed control of KCS is expected to be completed in the fourth quarter of 2022. Once approved, CP and KCS expect to be fully integrated within three years, the companies said.