Ferry group Irish Continental back to profit after coronavirus

Ferry group Irish Continental saw a sharp recovery in its business in the first half of this year and said the trend has continued through the summer period. However, the business has yet to return to pre-pandemic levels.

Revenue jumped 85 per cent to €263.1 million as the group recorded a €15.4 million profit before tax compared to a loss of €12.2 million at the same point last year.

Earnings before interest, tax, depreciation and amortisation jumped nearly fourfold to €47.3 million in the six months to the end of June, from €12.7 million in 2021.

The company announced a 4.64 cent dividend per share for investors: last year, there had been no dividend announced for the period although the company did pay a nine-cent full-year dividend earlier this year.

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Travel restrictions

Chairman John McGuckian said the first six months of 2022 had been “one of significant improvement in group performance following the challenging trading environment over the previous two years” as the company coped with travel restrictions imposed during the Covid pandemic.

“The gradual return of passenger travel towards more historic patterns and the continuing support of our freight customers together with the new ferry service on Dover — Calais drove revenues to a record level,” he said.

He noted that inflation had been a challenge for the business, particularly energy prices. Group fuel costs more than doubled to €58 million from €22.7 million in the period.

“The group’s cost base has been affected by higher global prices, in particular fuel prices and charter rates,” the company said, adding that it had been successful so far in passing on those costs to customers. “It is essential that the group continues to do so,” it said.

Revenues in the group’s Irish Ferries division surged to €167.9 million, a multiple of the €62.9 million in the same period last year and just shy of 2021′s full-year revenues of €175.5 million.

Car volumes were up sevenfold at 214,200, from 29,800. Passenger numbers also jumped dramatically — to 894,400 from 132,800.

Roll-on, roll-off (RoRo) freight volumes more than doubled to 330,200, from 126,700 in the first six months of last year. Freight revenues were up 94.3 per cent, the company said.

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The first half figures for cars, passengers and RoRo volumes were all ahead of the full year numbers for 2021, in large part reflecting the impact of the new Dover-Calais route.

Stripping out the impact of routes added over the past year, car and passenger volumes both comfortably more than trebled year-on-year while RoRo freight was 15 per cent ahead.

“The improvement in revenue performance has continued to date,” Mr McGuckian said, with car volumes more than three times ahead of the same period last year and RoRo freight volumes more than double the 2021 numbers from the beginning of July to August 20th. Both were ahead of expectations, the company said.

“However, in the near term, the group is cautious regarding inflation pressures and the associated macroeconomic impact together with the challenges in passing cost increases through the logistics chain,” the group chairman said.

“On a strategic level, the group continues to invest in its businesses, with over €50 million expended on strategic assets in the half-year period,” he said.

That includes expanding the company’s Dover-Calais service — which was established only at the end of June 2021 — with the addition of a third vessel on the route in May of this year. Irish Continental is now operating 30 sailings a day on that route.

The company said it was continuing to invest in the expansion and modernisation of its container terminals “with the latest automated and environmentally-friendly equipment. The trading performance for the year to date across all our business has been strong. Despite significant cost pressures in both divisions, we have managed to maintain and grow profitability.”