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Displaying items by tag: ICG Preliminary Results

#ICGresults- Irish Continental Group plc released today their Preliminary Statement of Results for Year Ended 31 December 2015.

Commenting on the results, Chairman John B McGuckian said, “2015 was another successful year for the group with growth in revenue of 10.5% to €320.6 million and earnings before non-trading items, interest, tax, depreciation and amortisation (EBITDA) of €75.5 million, up 49.5%. During 2015 the Group benefited from lower world fuel prices, stronger Sterling and increased carryings. The Group maintains a pivotal position in facilitating Ireland’s international trade and tourism and is operationally geared to the economic recovery in Ireland. We have seen the benefits of this recovery continue into the early weeks of 2016 which, notwithstanding a weakening in Sterling and assuming current oil prices, gives us confidence that we can look forward in 2016, in the absence of unforeseen developments to further growth in revenue and earnings.”

2015 Overview (see below, attached downloadable preliminary results and charts). 

2015 has been another successful year for the Group, with a positive operational and financial performance in both divisions building upon the continued Irish economic recovery.

The Group has again strengthened its strategic position as the leading maritime transport provider in the Republic of Ireland. Revenue for the year grew by 10.5% to €320.6 million. EBITDA for the year increased by 49.5% to €75.5 million. Adjusted EPS, which excludes non-trading items, and the net interest cost on defined benefit pension obligations, was 87.7% higher at 29.1 cent. The Group’s return on average capital employed (ROACE) also increased significantly to 36.7% in 2015 (2014: 20.5%). The Group has benefited from the improvement in 2015 of the economies in our sphere of operations and the decline in global fuel prices. Sterling strength was a positive for tourism business in Irish Ferries. The strength of Sterling increased average yields during the period and also increased the attractiveness of Ireland as a tourist destination for UK based travellers. However, this benefit is partially offset by Sterling denominated costs. The Group’s total fuel cost was 26.4% lower than the previous year at €39.0 million (2014: €53.0 million). The benefit of lower fuel costs for the Group has been partially offset by a strong dollar versus the Euro, the fuel adjustment mechanism with freight customers where we pass on the reduction in fuel costs and the amendment of EU environmental regulations requiring the Group to consume more expensive fuel grades. The Group invested in its operations in the period through the acquisition of four LoLo container vessels adding to its owned vessel fleet and expansion of its container terminal operations at Belfast Port, both being examples of the continued growth in our operations.

BUSINESS REVIEWS Irish Continental Group operates through two divisions; the Ferries division operating under the Irish Ferries brand offering passenger and RoRo freight services. This division also carries out ship chartering activities. The Container and Terminal division, which includes the container shipping line, Eucon, and two container terminals, Dublin Ferryport Terminals (DFT) and Belfast Container Terminal (BCT), within the two main ports on the island of Ireland.

FERRIES DIVISION Revenue in the division was 10.6% higher than the previous year at €203.9 million (2014: €184.3 million). Revenue in the first half of the year increased 11.3% to €86.5 million (2014: €77.7 million), while in the second half revenue increased 10.1%, to €117.4 million (2014: €106.6 million). EBITDA increased to €63.7 million (2014: €43.1 million) while EBIT was €48.1 million compared with €28.0 million in 2014. The increase in profit was primarily driven by increased freight and passenger revenue and lower fuel prices in the year compared with 2014.

Car and Passenger markets It is estimated that the overall car market, to and from the Republic of Ireland, grew by approximately 1.2% in 2015 to 789,000 cars, while the all-island market, i.e. including routes into Northern Ireland, is estimated to have remained flat. Irish Ferries’ car carryings performed strongly during the year, at 400,900 cars, (2014: 381,800), up 5.0% on the previous year. In the first half Irish Ferries grew its car volumes by 7.1% while in the second half, which includes the busy summer holiday season at 3.6%.

The total sea passenger market (i.e. comprising car, coach and foot passengers) to and from the Republic of Ireland remained flat in 2015, at a total of 3.2 million passengers, while the all-island market decreased by 2%. Irish Ferries’ passenger numbers carried were up 2.0% at 1.676 million (2014: 1.643 million). In the first half of the year, Irish Ferries passenger volumes were up by 2.6% and in the second half of the year, the growth in passenger numbers was 1.5%.

RoRo Freight The RoRo freight market between the Republic of Ireland, and the U.K. and France, continued to grow in 2015 on the back of the Irish economic recovery, with the total number of trucks and trailers up circa 6% to approximately 888,000 units. On an all-island basis, the market was up around 4% to approximately 1.66 million units. Irish Ferries’ carryings, at 272,500 freight units (2014: 247,900), were up 9.9% in the year reflecting a strong performance by Irish Ferries relative to the market (volumes were up 11.5% in the first half and 8.5% in the second half). The freight market enjoyed excellent growth in 2015 helped by favourable economic condition in the Republic of Ireland. These economic factors in addition to the introduction of the ‘Epsilon’ in 2013 with the increased frequency it has provided has allowed us to outperform the market. The Epsilon in its second full year of operation has continued to perform well on both the Ireland – UK and Ireland – France routes.

Chartering The ’Kaitaki’ remained on its 4 year charter to KiwiRail during the year, operating in New Zealand. In an extension of the division’s chartering activities, four LoLo container vessels were purchased in late 2015 for a combined cost of €24.2 million. The vessels are the MV Elbfeeder (built 2008), MV Elbtrader (built 2008) and MV Elbcarrier (built 2007), each which has a capacity of 980 teu (Twenty Foot Equivalent) and a gross tonnage of 8,246 tons together with the MV Ranger (built 2005) which has a capacity for 803 teu and a gross tonnage of 7,852 tons. The three Elb vessels are currently on year-long charters to the Group’s container shipping subsidiary Eucon on routes between Ireland and the Continent whilst the Ranger is on charter to a third party.

CONTAINER AND TERMINAL DIVISION Revenue in the division increased to €118.2 million (2014: €107.0 million). The revenue is derived from container handling and related ancillary revenues at our terminals and in Eucon from a mix of domestic door-to-door, quay-to-quay and feeder services with 71% (2014: 71%) of shipping revenue generated from imports into Ireland. With a flexible chartered fleet and slot charter arrangements Eucon was able to adjust capacity and thereby continue to meet the requirements of customers in a cost effective and efficient manner. EBITDA in the division increased to €11.8 million (2014: €7.4 million) while EBIT rose 93.6% to €9.1 million (2014: €4.7 million) due mainly to increased volumes both in Eucon and in our terminal operations as well as reduced fuel costs. Overall container volumes shipped were up 3.4% compared with the previous year at 286,500 teu (2014: 277,200 teu).

Containers handled at the Group’s terminals in Dublin Ferryport Terminals (DFT) and Belfast Container Terminal (BCT) were up 32.9% at 248,500 lifts (2014: 187,000 lifts). DFT’s volumes were up 6.6%, while BCT’s lifts were up 146.4%. The increase in Belfast arises from the awarding in April 2015 by Belfast Harbour Commissioners (BHC) of the Services Concession to BCT for the operation of a combined container terminal at Victoria Terminal 3 (VT3). The process of combining the two existing container terminals in Belfast began in June and was completed in September.

On 1 January 2015, the EU Sulphur Directive came into force in many parts of Northern Europe, including the North Sea and the English Channel termed as Sulphur Emission Control Area’s (SECA’s). This reduced the permissible level of sulphur in bunker fuel from 1.0% to 0.1% for vessels in these SECA’s requiring the vessels in the Eucon fleet to consume higher cost, low sulphur fuel.

FINANCE EBITDA for the year was €75.5 million (2014: €50.5 million). There was a net outflow of working capital of €1.6 million, due to the higher level of activity in our operations. The Group made payments, in excess of service costs, to the Group’s pension funds of €2.7 million. Cash generated from operations amounted to €71.8 million (2014: €44.4 million).

Interest paid was €2.8 million (2014: €3.6 million) while taxation paid was €0.8 million (2014: €1.1 million). Interest received amounted to €0.1 million (2014: €0.1 million).

Capital expenditure was €35.0 million (2014: €8.0 million) which principally included €24.2 million for the acquisition of container vessels together with the annual refits of the passenger vessels.

The Group’s IAS 19 year end pension deficits were €5.1 million (2014: €24.1 million). Net debt at year end was €44.3 million (2014: €61.3 million) which represents 0.6 times EBITDA (2014: 1.2 times EBITDA). DIVIDEND During the year the Group paid the final dividend for 2014 of 7.035 cent per ICG Unit. The Group also paid an interim dividend for 2015 of 3.638 cent per ICG Unit, and the Board is proposing a final dividend of 7.387 cent per ICG Unit, payable in June 2016, making a total dividend for 2015 of 11.025 cent per ICG Unit, an increase of 5.0% on the prior year.

Subject to shareholder approval at the Annual General Meeting, the final dividend will be paid on 10 June 2016 to shareholders on the register at close of business on 27 May 2016. Irish dividend withholding tax will be deducted where appropriate. THE BOARD In the first half of the year executive directors Tony Kelly and Garry O’Dea retired from the Board on reaching the normal retirement age of 60 years. On 3 March 2016, the Group appointed David Ledwidge as a Director of the Company. David joined ICG in 2006 and in February 2015 was appointed as Chief Financial Officer ("CFO") designate taking up the CFO role in June 2015. He has been with ICG for over 9 years and has played a very significant part in the development of the Company which now looks forward to his contribution at Board level.

CURRENT TRADING & OUTLOOK Since our last update to the market, in the Interim Management Statement of November 2015, trading conditions have remained favourable. Revenue for the year increased by 10.5% for the full year, versus 9.9% for the 9 months to the end of September 2015 resulting in EBITDA for the final quarter of 2015 up €3.1 million at €11.4 million. The improved momentum has continued into the first two months of 2016. In the period to date cars are up 4% on last year and passenger carryings are 1% ahead of 2015. RoRo freight volumes are up 14% on the same period in 2015. In the Container and Terminal Division containers carried are up 12% while port lifts reflecting the expanded operations at Belfast Port are up 53% year to date.

Lower world fuel prices will continue to help performance although the recent weakening of Sterling will affect the Euro value of UK originating revenues. As a result of these factors, and the ongoing improvement in the economic outlook in our sphere of operations, we look forward, in the absence of unforeseen circumstances, to further growth in revenue and earnings for the financial year 2016.

Published in Ports & Shipping

Ferry & Car Ferry News The ferry industry on the Irish Sea, is just like any other sector of the shipping industry, in that it is made up of a myriad of ship operators, owners, managers, charterers all contributing to providing a network of routes carried out by a variety of ships designed for different albeit similar purposes.

All this ferry activity involves conventional ferry tonnage, 'ro-pax', where the vessel's primary design is to carry more freight capacity rather than passengers. This is in some cases though, is in complete variance to the fast ferry craft where they carry many more passengers and charging a premium.

In reporting the ferry scene, we examine the constantly changing trends of this sector, as rival ferry operators are competing in an intensive environment, battling out for market share following the fallout of the economic crisis. All this has consequences some immediately felt, while at times, the effects can be drawn out over time, leading to the expense of others, through reduced competition or takeover or even face complete removal from the marketplace, as witnessed in recent years.

Arising from these challenging times, there are of course winners and losers, as exemplified in the trend to run high-speed ferry craft only during the peak-season summer months and on shorter distance routes. In addition, where fastcraft had once dominated the ferry scene, during the heady days from the mid-90's onwards, they have been replaced by recent newcomers in the form of the 'fast ferry' and with increased levels of luxury, yet seeming to form as a cost-effective alternative.

Irish Sea Ferry Routes

Irrespective of the type of vessel deployed on Irish Sea routes (between 2-9 hours), it is the ferry companies that keep the wheels of industry moving as freight vehicles literally (roll-on and roll-off) ships coupled with motoring tourists and the humble 'foot' passenger transported 363 days a year.

As such the exclusive freight-only operators provide important trading routes between Ireland and the UK, where the freight haulage customer is 'king' to generating year-round revenue to the ferry operator. However, custom built tonnage entering service in recent years has exceeded the level of capacity of the Irish Sea in certain quarters of the freight market.

A prime example of the necessity for trade in which we consumers often expect daily, though arguably question how it reached our shores, is the delivery of just in time perishable products to fill our supermarket shelves.

A visual manifestation of this is the arrival every morning and evening into our main ports, where a combination of ferries, ro-pax vessels and fast-craft all descend at the same time. In essence this a marine version to our road-based rush hour traffic going in and out along the commuter belts.

Across the Celtic Sea, the ferry scene coverage is also about those overnight direct ferry routes from Ireland connecting the north-western French ports in Brittany and Normandy.

Due to the seasonality of these routes to Europe, the ferry scene may be in the majority running between February to November, however by no means does this lessen operator competition.

Noting there have been plans over the years to run a direct Irish –Iberian ferry service, which would open up existing and develop new freight markets. Should a direct service open, it would bring new opportunities also for holidaymakers, where Spain is the most visited country in the EU visited by Irish holidaymakers ... heading for the sun!

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