ICG may be facing choppier waters

Eamonn Rothwell came across as pretty chipper yesterday when talking about his company's figures for 2007. The group saw profits rise, customer numbers grow, and it even won four top ferry awards. As the chief executive saw it, the 2007 results were a reflection of the excellence of its management, writes COLM KEENA

In an interview with The Irish Times, he was anxious to stress that his ferries were offering a better and more attractive service and that it was this, when compared with anecdotal evidence of increasing unhappiness with the hassle and the hidden costs involved in air travel, that explained the positive results.

He said that, contrary to claims from trade unions that some staff were being paid €4 an hour, ICG was paying some of the best rates in the ferry sector in order to secure quality staff.

"The current spread of pay rates paid by the fleet management contractor, DFM Ltd, to their employees on all of our ships range from €8.77 per hour to in excess of €35 per hour," the group said in its statement on its preliminary results.

Mr Rothwell said the statement had been passed by ICG's auditors and the rates were not subject to deductions for accommodation or anything else. No one working on the ferries was getting less than €8.77 an hour, he said. "That is the factual situation."

Most of the workers on the lowest rate are from eastern Europe.

Davy Stockbrokers analyst Stephen Furlong was in broad agreement with Rothwell's positive reflections.

The core ferry business in terms of cars and freight performed "very strongly" and the results were "materially above forecasts", he said. He also noted that net debt had dropped to €84.5 million, from €113.8 million.

He saw a number of "headwinds" for 2008, including oil prices which may be up about one-third on the 2007 figure of €36 million, as well as the difficulty of maintaining business levels against a more difficult economic environment.

Rothwell said oil prices, which were up €5 million in the second half of 2007, were a concern as the company looked ahead.

So was the potentially dampening effect the sterling/euro exchange rate might have. About 70 per cent of ICG's passenger custom departs from the UK, and the exchange rate will make it less attractive for British-based people to holiday here.

However, on the positive side he cited the response the group had had to its new vessel, the Oscar Wilde, which sails between Ireland and France and has increased freight capacity, as well as the ongoing development of the Dublin port terminal.

Turnover in the container and terminal division grew by 11 per cent in 2007, and new capacity is being developed.

Port charges were ICG's greatest cost in 2007, at 29 per cent, followed by fuel (16 per cent) and payroll (15 per cent).