A €29 million bill for shipping group Irish Continental's controversial plan to hire crews of foreign nationals for its vessels left the company in the red last year. Barry O'Halloran reports.
Irish Continental Group (ICG), which operates Irish Ferries, grew turnover by almost 2 per cent to €298.7 million in 2005 from €293.3 million the previous year. After operating costs and write-offs, ICG made a trading profit of €19 million for the year, 19 per cent short of the €23.3 million it earned in 2004.
A €29.1 million bill to pay voluntary redundancy to workers who agreed to leave the company as a result of its decision to outsource ships' crews left the group with an operating loss of €10.1 million for 2005, as against the €10.9 million operating profit it earned the previous year.
The company had €1 million investment income, and had a €5.7 million charge for finance costs. This resulted in a pretax loss for the year of €14.8 million, compared to a profit of €5.5 million in 2004. Losses per share came to 66.9 cent in 2005, compared with earnings per share (EPS) of 23.4 cent a year earlier.
Group net debt dropped by close to 10 per cent last year to €105.9 million from €117.9 million.
Turnover in the ferries division, which consists of ferry operations to and from Ireland, ship chartering and holiday services, was €162.7 million, down from €164.3 million in 2004. Oil costs hit this operation, and left the group with a 44 per cent increase in its fuel bill to €18.7 million.
Difficult market conditions and the industrial dispute that resulted from the group's move to outsource its ships' crews hit passenger numbers, the company said. These dropped by 6.6 per cent to 1.49 million. Car numbers (carried on its car ferries) declined by 4.5 per cent to 366,000.
However, roll-on roll-off freight business grew, with the number of vehicles carried up 3 per cent at 210,000.
The container and terminal division, including Eucon, Feederlink and Euofeeder freight services and its container port in Dublin, performed well. Turnover was up 5 per cent in 2005 at €136.4 million from €129.8 million. Fuel costs were up 44 per cent at €10.5 million while vessel charter costs rose by 15 per cent to €30.6 million.
ICG said yesterday that there was a net surplus of €7.4 million in its defined-benefit pension scheme. However, a number of its officers are members of a merchant navy scheme, the liabilities for which are shared by a number of employers. This scheme has a deficit and the group's liability for this is €4.3 million.
The group confirmed yesterday that 500 of its 1,055 staff have applied for voluntary redundancy. It expects to save 20 per cent of its €57 million wage bill by hiring foreign nationals for less.
ICG chairman John B McGuckian said there had been some loss of revenue as a result of last year's industrial action. "But we are confident we have taken a major step forward in reducing our cost base," he said.
