Ferry operator ICG posts Q3 earnings rise to €25m
Published 19/11/2010 | 05:00
Ferry operator Irish Continental Group (ICG), which trades as Irish Ferries, posted a 9pc rise in earnings (EBITDA) to €25m in the three months to the end of September as turnover remained almost flat at €81.2m for the period.
In a meagre interim management statement issued yesterday, ICG warned that the economic backdrop to its business remained challenging, but noted that its operating profit in what was the company's third quarter climbed 12pc to €19m.
The ferry company's business is seasonally weighted towards the second half of the year, which is its busiest period as it incorporates the bulk of the summer holiday season.
"The impact of the impending adjustments in public finances in both Ireland and the UK is uncertain both with regard to tourism and freight demand," said ICG's statement. "Nonetheless, we have carefully managed our cost base and our operational capacity to continue to be able to compete profitably in this environment."
While the number of passengers using its services rose 5.9pc in the four months to the end of October, ICG said that its roll-on, roll-off freight operations continued to be weak, with volumes down 10.1pc in the four month period to the end of last month.
Container freight volumes at the company were 2.4pc lower as the company ditched some services that were being delivered at uneconomic rates, while the number of container units lifted at the ports from which ICG operates fell 3pc.
The total number of passengers carried in the first 10 months of this year was over 1.37 million, up 8.9pc year-on-year, while the number of cars carried was 1pc lower at 326,000.
Total turnover at the group in the nine months to the end of September was €203.6m, up from €200.4m a year earlier, while operating profit for the period was up 15.4pc to €27.8m. Its net debt fell to €13.8m from almost €27m at the end of June.
Analyst Stephen Furlong of Davy says that he continues to be keen on ICG stock because of its cash-generating abilities and operating leverage.
"The key catalyst will be any change in the supply conditions in the freight market," he said.
Bloxham Stockbrokers noted that ICG should have enough cash earnings in the current year to "comfortably cover" a €1 dividend for shareholders and that the company was likely to be debt free next year, sparking speculation over how shareholders might be further rewarded.
ICG shares closed down 10c at €15.20.