IRISH Continental Group (ICG) slipped into the red during the first quarter, recording a pre-tax loss of €1.2 million. It remains uncertain over its financial prospects for 2011 due to rising fuel costs.
The ferry and freight services group — which owns Irish Ferries and freight operators Eucon and Feederlink — said yesterday that revenue amounted to €77.5m for the period from the start of January to the end of April, compared to €75.7m for the corresponding period last year: an increase of 2.4%.
Passenger and freight revenue was also up by 4.5%, although last year’s sale of the previously named Pride of Bilbao vessel to the Cyprian shipping company St Peter Line meant that charter revenue fell by €1.4m, year-on-year.
The €1.2m loss for the period under review was down from a €200,000 pre-tax profit for the corresponding period last year.
However, management said the group’s business is “significantly weighted towards the second half of the year, when normally a higher proportion of the group’s operating profit is generated than in the first six months”.
ICG’s management said that its financials this year will depend on fuel costs. The group’s fuel bill ballooned by €10m last year and another €2.9m since the turn of the year.
“The greatest threat to our financial performance, this year, is the very significant increase in our fuel cost, following on from the €10m increase in our fuel bill in 2010,” the management said.
“We were successful last year in passing on that increase in that financial year. However, given the scale of the back-to-back increase in 2011, it will be a significant challenge to pass on all of this increase in the remainder of the current financial year, if oil remains at current price levels.
“Notwithstanding the current difficult economic backdrop, we are confident of passing on fuel cost increases through the cycle, as has been successfully proven by our business model in the past.”
Volumes across most of ICG’s business divisions are down in the year-to-date, but net debt is down from €6.3m to €4m.
ICG said the strength of its balance sheet remains “a major positive” and that the reductions in VAT in the hospitality sector “is a positive for inward tourism”.
© Irish Examiner Ltd. All rights reserved