ICG ‘well placed’ despite earnings fall
The group, which owns Irish Ferries and Eucon Freight, yesterday reported a 23.2%, or €16 million, decline in earnings before interest, tax, depreciation and amortisation to €50.7m for 2009. Operating profit fell by over 36% to €26.5m and basic earnings per share fell by nearly 38% to 102.4c. Group revenue for the year came in at €260.5m, a 24% decline from 2008’s €343m.
Group chairman John McGuckian said that last year provided “the most challenging trading conditions seen in Ireland for many decades”, which impacted directly on the group’s passenger business, “but more significantly, on our freight business, which is inextricably linked to levels of internationally traded goods in north-westEurope”.
However, Mr McGuckian said management held a relatively upbeat outlook for this year, although he noted that the economic environment remains challenging.
“With our restructured cost base, our substantial investment in modern tonnage and terminal facilities and our strong balance sheet, we are, fortunately, 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,” he said.
ICG’s figures were broadly in line with analyst expectations. The company called the EBITDA figure of just under €51m “a solid financial performance” and added that its net debt was reduced by €27m to €21.7m.
Bloxham analyst Joe Gill said: “The company is in remarkably good shape. Despite its exposure – 43% of sales derived from Ireland – to Europe’s fastest contracting consumer during 2009, ICG’s flexible and well invested cost model managed to drive debts down 55% and maintain its market leading positions in freight, cars and passengers while paying a generous €1 dividend.
“Aside from continuing those patterns during 2010 its operational leverage provides scope for material profit growth once trade volumes begin to recover. ”
He said that with no debt by year end, a well invested fleet, not requiring material capex for five-10 years, and a good operational platform, ICG is becoming a true cash machine. That largesse could be deployed in buying ships, buying ferry companies, share buybacks or special dividends, he said.
