Profit up while debt sinks at ferry firm

CAR ferries operator, Irish Continental Group, reported a sharp rise in pre-tax profits last year, prompting a €1 final dividend to shareholders.

The group’s debt of €13.8 million at end September is now down to €6.3m, the lowest since 1993.

Results for the year to end December 2010 showed the profit before tax rose 61% to €40.1m against €24.9m, while turnover for the period rose marginally to €262.2m (+0.7%) following two years of decline.

Earnings per share rose 53.1% to 156.8 cent, while the group’s earnings before interest tax, depreciation and amortisation (EBITDA) increased by just 5.7% to €53.6m.

Turnover at the ferries division was 3.2% ahead at €153.7m, with earnings before interest and tax rising to €24.5m against €18.1m in 2009.

While passenger numbers were up almost 8% at 1.538m, car numbers fell 2.4% at 367,000.

The group estimated the overall roll-on roll-off freight market grew by about 3% last year after a fall of 14% the year before and a drop of 4% in 2008.

Irish Ferries roll-on roll-off carryings for 2010 were down 9.2% to 178,000, as the division was hit by increased competing freight capacity on both the Holyhead and Dublin to Liverpool routes.

Key factors in the results included a strong performance from the passenger side of business and profit on the sale of its Bilbao vessel (€9.4m), the company said in its statement.

Some of those gains were partly offset by a weakness in the freight side of the business, due to the sharp reduction in economic activity in Ireland over the last number of years, as well as an overcapacity of ships in that segment of its operations.

Turnover at the group’s container and terminal division fell by 2.7% to €109.8m, with operating profits down 16.7% to €7m due to higher fuel costs and higher restructuring costs.

For 2011, ICG’s chairman John B McGuckian said: “We are facing into an uncertain year, with the combined effects of higher fuel costs and austerity programmes in Ireland and the UK providing a challenge.

“Nevertheless, we have made a solid start to the year and, with a strong balance sheet to support us, we look forward to the rest of the year with confidence.”

So far this year, Irish Ferries passenger numbers are up 4% on last year, while car numbers are down by a modest 1%.

The board is proposing a final dividend of 100 cent per ICG share, which is unchanged from the previous year.

It did not pay an interim dividend.

Commenting on the figures, Davy Research said: “We continue to like ICG for its cash generation and dividend stream.”