IRISH CONTINENTAL Group’s pretax profit declined by 25 per cent to €6.2 million in the first half of this year due to rising fuel costs and weak consumer demand.
The ferry operator reported a 3.4 per cent rise year on year in revenues to €126.6 million in the six months to the end of June, but operating profits declined by 26.1 per cent to €6.5 million.
Revenues at its ferries division – which operates services to Britain and France – were flat at €68.2 million but turnover from its container and terminal division rose by 7.3 per cent to €59.1 million.
Within its ferries division, ICG reported a 10.7 per cent year on year increase in its Ro-Ro (roll-on, roll-off) freight revenues to €25.9 million.
But passenger, car and on-board revenues declined by 2.2 per cent to €40 million.
ICG carried 670,500 passengers in the half year, down 3.6 per cent on the same period of 2010. This was due to a combination of the ash cloud effect – which boosted demand – not being repeated this year and weak consumer demand due to the recession. Car traffic was down 3.1 per cent at 151,600.
Commenting to The Irish Timeson trading since the end of June, ICG chief executive Eamonn Rothwell said: "It's tough going out there at the moment. The trend has continued. The car market is soft, as is freight. That's disappointing."
Mr Rothwell added that while export volumes remained strong, imports were down. There was also “softness” in the British tourist market to Ireland, he said.
Fuel costs rose by €4.3 million in the period. The ferry group’s bill for the entire year is expected to mirror the €10 million increase it recorded in 2010. “It’s going to be very difficult for us to pass on these increases in full for the second year on the trot,” Mr Rothwell said.
ICG continues to pay down its debt, which almost halved in the six-month period to €14.4 million. Its ability to pay down its net debt is due to strong cash generation and tight costs management.
ICG announced an interim dividend – its first since 2006 – of 33 cent a share. This will cost it €8.2 million.
Analysts expect the group to announce an additional dividend of 67 cent a share at the time of its full-year results. This would bring its dividend for the year to €1 a share – mirroring similar windfalls for shareholders over the past four years.
ICG’s shares closed unchanged yesterday at €14.70.