Irish Ferries parent firm records 61% rise in profit

FERRY OPERATOR Irish Continental Group (ICG) has warned of an “uncertain” 2011 due to higher fuel costs and the effects of austerity measures in the British and Irish economies.

The company, which owns Irish Ferries, secured a 61 per cent increase in pretax profits in 2010 following an increase in passenger numbers and the sale of one of its ships, it announced yesterday.

However, this was slightly offset by a fall in turnover at its container and terminal division, while group fuel costs were “substantially higher”, ICG said.

The company will pay a dividend of €1 per share in June. According to Bloomberg data, ICG chief executive Eamonn Rothwell owns 4.7 per cent of the company, meaning he will receive about €1.2 million from the payout.

Moonduster, a consortium comprising the Philip Lynch-led One51 and the Cork-based Doyle shipping company, will get €6.1 million for its 24.5 per cent shareholding.

ICG’s share price rose 5 cent on the Iseq yesterday, closing at €17.60. In a statement, ICG chairman John McGuckian said the company was well placed to “compete vigorously” in a tougher environment.

“For 2011 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.”

Fuel costs rose 31 per cent to €41.4 million last year and are set to act as another “headwind” this year, Mr McGuckian added, citing concerns over supply due to political uncertainty in North Africa.

The ICG chairman said economic cutbacks in Britain and Ireland would have an impact on levels of both tourism and trade.

However, he cited “an increase in value for money in the Irish tourist product”, including new attractions such as the Convention Centre Dublin, the Grand Canal Theatre and Aviva Stadium, and said ICG had made “a solid start to the year”.

In the first nine weeks of 2011, Irish Ferries’ passenger numbers rose 4 per cent compared to the same period last year, though car numbers are down 1 per cent.

Passenger numbers increased 7.8 per cent to almost 1.54 million in 2010, boosted in the second quarter by the volcanic ash disruption to air travel, while car numbers fell 2.4 per cent to 367,000.

Higher passenger revenues more than compensated for lower freight revenues. Roll-on, roll-off (ro-ro) freight volumes declined 9.2 per cent to 178,000 vehicles, although the rate of decline eased in the second half.

Turnover at the ferries division advanced 3.2 per cent to €153.7 million, while turnover at its container and terminal division fell 2.7 per cent to €109.8 million.

During the year under review ICG completed the sale of the vessel Bilbao to St Peter Line at a profit of €9.4 million.

ICG: 2010 results

Pretax profits: €40.1 million (+61%)

Turnover: €262.2 million (+0.7%)

Operating profit:€40.9 million (+54%)

Earnings per share (eps): 156.8 cent (+53%)

Final dividend: 100c (n/c)

Summary: After two years of decline, total revenues at ICG rose thanks to the tourism sector performing well. Freight volumes were affected by overcapacity in the market but the decline slowed towards the end of the period. Container volumes held up, but operating profit in this division declined.