Irish Continental posts profits of €28m after Federlink deal
SHIPPING company Irish Continental Group (ICG) revealed yesterday that Federlink, the North Sea subsidiary it sold last year for €29m, had a net asset value of just €1m – meaning the company made a paper profit of €28m.
Chief executive Eamonn Rothwell said he thinks it was the best deal done on the Irish market in 2012.
Federlink was bought by Danish company Unifeeder.
It provides container shipping services on routes between the port of Rotterdam and the East Coast of the UK.
ICG was publicly congratulated by shareholders at its AGM yesterday on the profits made in the deal.
Mr Rothwell said no other sales or acquisitions are planned.
He said that markets for the company are generally flat at present and "it's still tough out there" but there are clear signs that the US market is recovering.
ICG has carried 1.5pc fewer passengers in the year to date while car volumes have fallen 5.5pc.
Container freight volumes rose 10pc.
Mr Rothwell says this slight advantage in freight is due to a number of competitors being temporarily down on capacity.
"Our business is quite seasonal and the summer is there to play for," he added.
Mr Rothwell also revealed that his company does not hedge against changes in fuel prices and its tourism business is most exposed to price rises.
ICG's freight activities have an automatic fuel surcharge mechanism – meaning changes in the cost of fuel are passed on to freight customers straight away – but no such automatic price adjustment exists for the ICG ferries that carry tourists.
Hedging against fuel price rises is common among the shipping and aviation business.
But Mr Rothwell says that hedging is expensive and "if you have a strong balance sheet, you generally don't need to hedge".