Profits and earnings fall at Irish ferry firm
OPERATING PROFIT and earnings at ferry company Irish Continental Group fell in the first half of this year, as a €4.5 million rise in fuel bills outweighed a marginal increase in turnover.
The ferry operator has announced plans for a tender offer to return up to €111.5 million of cash for shareholders by buying back ICG units, which will then be cancelled.
ICG plans to offer €18.50 a share in the tender, a premium of 15.6 per cent on its closing share price on Wednesday.
The Irish ferry company is also planning to pay a 33 cent a share dividend for the first six months. This is the same level as the first half of 2011.
The group recorded earnings before interest tax and depreciation of €14.3 million, down from €16.1 million in the same period in 2011. Its operating profit slipped to €5.1 million from €6.5 million in 2011. Revenue rose by 0.4 per cent to €127.1 million. The ferry group’s fuel bill increased to €28.9 million in the six-months.
Speaking to The Irish Times yesterday, ICG chief executive Eamonn Rothwell said fuel costs would increase by €8 million for the year as a whole if oil prices and exchange rates remain at current levels.
“It’s pretty significant and in the context of that increase we haven’t done too badly [in terms of trading],” he said.
ICG also announced the sale of its container shipping subsidiary Feederlink Shipping Trading to Danish company Unifeeder for up to €29 million.
This deal is subject to regulatory clearance in the UK and involves an initial payment of €20 million on closing and an additional €9 million over the following 12 months subject to certain conditions being met.
Feederlink recorded revenue of €21.6 million last year and a pre-tax profit of €1.8 million.
Mr Rothwell said it had decided to sell the business after receiving an approach at a “reasonable price”.
ICG’s freight volumes were down for the first half of the year, but passenger traffic was up by just under 1 per cent.
The first half of the year is less profitable for ICG for seasonal reasons.