ICG shares rise despite sharp fall in revenues

SHARES IN ferry operator Irish Continental Group (ICG) rose by 2.9 per cent yesterday in spite of it reporting a sharp decline in revenues and profitability for 2009 and issuing a cautious outlook for this year.

There was further good news for investors, with the company announcing plans for a €24.6 million dividend payment, to be disbursed in June. This amounts to €1 per share and represents a yield of 6.3 per cent.

ICG chief executive Eamonn Rothwell, who owns 16 per cent of ICG, will receive about €3.9 million from the dividend payout.

Mr Rothwell has acquired his shareholding over the past 22 years.

Moonduster, a consortium comprising the Philip Lynch-led One51 and the Cork-based Doyle shipping company, will get €6.1 million.

ICG more than halved its net debt last year, reducing it from €48.7 million to €21.7 million at the end of December 2009. This was its lowest level of debt since 1993.

With the ferry company generating healthy cash flows, analysts predicted yesterday that it could be debt free by the end of 2010.

“We plan to reduce the debt as much as possible,” Mr Rothwell said yesterday, adding that there were “some headwinds” facing the company, including a rise in fuel prices recently.

ICG yesterday reported a 24 per cent drop in revenue to €260.5 million while its earnings before interest, tax, depreciation and amortisation fell by 23 per cent to €50.7 million.

The Irish ferry company posted an operating profit of €26.5 million in 2009, down from €41.8 million a year earlier.

These figures reflect the company’s exposure to the Irish economy, where it derives 43 per cent of its revenues.

ICG chairman John McGuckian described last year as “the most challenging trading conditions seen in Ireland in many decades”.

He said the outlook for 2010 remained “challenging” but the company was “well placed to compete vigorously in this tougher environment and with the operational leverage in the business a resumption of trade growth will be of significant benefit”.

ICG said there was a recovery in its trading position, particularly in terms of passengers and car traffic, in the second half of 2009.

“The freight market is tough; tourism is a bit better,” Mr Rothwell said. “It’s not getting worse on the freight side so that’s a good sign.”

ICG carried more than 1.4 million passengers in 2009, a decline of 2.7 per cent. Car traffic was static at 376,000 vehicles.

Its roll-on, roll-off freight business recorded an 18.7 per cent reduction while container freight was down 25.7 per cent and port lifts were 23.3 per cent lower.

ICG’s accounts yesterday showed that it paid no corporation tax last year, in spite of recording a pretax profit of €24.9 million.

This was largely due to the effect of tonnage relief of €3.2 million from its activities in Ireland and the Netherlands.

In October, the MV Pride of Bilbaowill be returned to ICG from PO, which has decided not to renew its charter on the vessel.

Mr Rothwell said ICG was considering three options for the ship: sale, charter or operation as part of its own fleet.

“I’m negotiating with a number of people,” he said.

“It’s going to be the autumn before we get a resolution.”