ICG shares up despite fall in profits

IRISH CONTINENTAL Group’s share price rose by 1.8 per cent yesterday in spite of the company announcing a sharp fall in revenues and profit for the first nine months of this year.

In an interim management statement published yesterday, ICG, which owns Irish Ferries, revealed that its revenues declined to €197 million in the nine months to the end of September, from €265.5 million a year earlier.

Its operating profit for the period was €24.1 million compared to €37.5 million in 2008.

The ferry operator’s earnings before interest, tax, depreciation and amortisation (Ebitda) fell by 25 per cent to €41.7 million.

ICG said the economic environment “remains challenging” and that sterling’s weakness against the euro “remains an issue”.

ICG brought down its net debt to €30 million at the end of September, from €48.5 million at the end of June.

This is its lowest level of net debt since 1993. Davy yesterday forecast that the company could be debt free in 2011.

ICG said that between July 1st and the last day of October, its passenger numbers rose by 1 per cent to 643,000. It also carried 2 per cent more cars, at 171,000.

RoRo freight volumes declined by 16 per cent, and container business was 19 per cent down. The number of “units” lifted at its ports fell 18 per cent to 59,000.

In the year to the end of October, ICG’s passenger numbers were down 4 per cent at 1.26 million, while its car traffic declined by 2 per cent to 330,000.

RoRo freight volumes fell by 20 per cent in the first 10 months, while its container business were 27 per cent lower year-on-year.

ICG chief executive Eamonn Rothwell said: “We have seen some pick up on the tourism side. I think we are seeing a migration [of passengers] back from airlines to ferries.

“People are fed up paying bags charges and other fees with airlines. In terms of freight, there’s no real sign of an improvement.”

ICG operates ferry services from Ireland to Britain and France and runs container freight and terminal operations from Europe.

The company has three large shareholders – property developer Liam Carroll, Mr Rothwell and the Philip Lynch-led Moonduster.

Mr Rothwell declined to comment on what might happen to Mr Carroll’s 29.3 per cent stake in ICG following the collapse of the developer’s Zoe group last month.

In a note yesterday, broker Davy said: “ICG remains supported by dividend and free cash flow yields of 8 per cent and 12 per cent respectively.”

Davy has set a 12-month price target of €16.50. ICG’s shares closed yesterday at €13.23.