ICG PLC - Irish Ferries results are good.http://www.independent.ie/business/irish/rothwell-mulls-icg-sail-away-from-irish-stock-exchange-30075080.html
near the end
Rothwell described ICG's recent investment in an extra ship, Epsilon, as a "major vote of confidence in the Irish economy". "We haven't bought a ship since 2011," he said.http://www.irishtimes.com/business/sectors/transport-and-tourism/irish-ferries-owner-irish-continental-group-steers-route-to-higher-profits-1.1715658http://otp.investis.com/clients/uk/icg/rns/regulatory-story.aspx?cid=500&newsid=396941
The Ferries division employs five owned multipurpose ferries, four of which are operating on routes to and from the Republic of Ireland and one chartered out and operating in New Zealand. In addition to the owned fleet the Division also charters in one further vessel as part of its operations. In 2013, 4,381 sailings were operated by Irish Ferries, carrying passengers, passenger vehicles and RoRo freight.
Revenue in the division was 1.1% higher than the previous year at €161.7 million while operating profit (before non-trading items) was €24.9 million compared with €22.4 million in 2012. The increase in profit was due principally to increased freight revenue and lower bunker (fuel) costs partially offset by reduced passenger revenue. Fuel cost in the division was down €3.5 million (8.9%) to €35.8 million. Revenue in the first half of the year was flat at €69.4 million (2012: €69.5 million), while the second half saw an increase of 2.0%, to €92.3 million (2012: €90.5 million).
Given the weak economic backdrop in our main markets, which affects consumers' propensity to travel, Irish Ferries' car carryings remained resilient during the year, at 350,900 cars, (2012: 353,800), down slightly (0.8%) on the previous year. This is broadly in line with the overall market performance into and out of the Republic of Ireland, which we estimate to have been flat year on year. Irish Ferries' passenger numbers carried were up 1.6% at 1.568 million (2012: 1.544 million). In the first half of the year, our passenger volumes were up by 0.3% and car volumes were down by 4.2%. In the second half of the year, which is seasonally more significant, the growth in passenger numbers was 2.6% while cars carried were up by 1.6% compared with the same period last year. During 2013 sterling was weaker than in the previous year which provided a headwind in our passenger segment.
Our business benefited from the start of a recovery in demand in the British market for Ireland's Tourism product where overall visitor numbers grew slightly following four years of serious decline. Britain continues to provide the largest proportion of passenger traffic for Irish Ferries amongst all of the countries where we source income and the continuation of Ireland's attractiveness in that market is critical to our future growth.
The Republic of Ireland's RoRo market returned to growth with a 3% increase in overall market carryings during the first half of the year followed by a 6% increase in the second half, to provide full year growth of 4%. This is a welcome sign of Ireland's return to improved economic health.
Irish Ferries' carryings, at 205,300 freight units (2012: 183,700), were up 11.8% in the year reflecting a strong performance by Irish Ferries relative to the market (volumes were up 7.9% in the first half and 15.7% in the second half).
The improvement in the RoRo markets informed our decision in the final quarter of 2013 to augment our capacity on the Dublin / Holyhead route whilst also commencing a new service between Dublin and Cherbourg. The chartered vessel Epsilon will provide a major improvement in our frequency on Dublin / Holyhead which we believe will restore some lost competitive advantage. With the vessel's superior freight deck and the number of cabins on board (70), we will also provide a once weekly service to France which will provide additional capacity to our customers throughout the year - much of which we are unable to provide because of the freight deck limitations of the cruise ferry Oscar Wilde (which is a more passenger-oriented vessel). It will also broaden our tourist offering by providing an economy style service to France complementing the Oscar Wilde.
This investment in both the Dublin / Holyhead and Dublin / Cherbourg routes will increase the Ferries' Division cost base but the initiative is targeted to become profitable within a short number of years
The MV Kaitaki remained on charter during the year, trading in New Zealand. The charter to P&O terminated on 30 June 2013 following which a new charter commenced, on 1 July 2013, to KiwiRail. The new charter is for a period of 4 years with an option for the charterer to extend the agreement by a further 3 years, out to 2020. The Princess Anastasia (formerly 'Bilbao') remained on bareboat hire purchase charter to St. Peter Line. Under the terms of the charter party, (forming part of the hire purchase sale agreement), title to the vessel will transfer to the charterers, on payment of the remaining instalments due under the agreement.
CURRENT TRADING & OUTLOOK
In the year to date the unprecedented adverse weather has resulted in a significant number of cancelled sailings (16% of budgeted sailings) which has resulted in some loss of discretionary passenger business and a disruption to freight business. However the additional capacity provided by the Epsilon has helped to counter the effect of the lost sailings. Car carryings, year to date, are flat, while RoRo freight volumes are up approximately 18%. Total passengers carried are down 4%. On the Ireland / France route a new competitor has entered the market with effect from January 2014, with a once weekly sailing. Container freight volumes are flat year to date, while container throughput at our terminals is up 2.5%.
The improved economic backdrop which we have experienced over the last 12 months looks likely to continue through 2014. However the impact on our business during 2013 has been mixed with the sea passenger market remaining flat while there has been a return to growth in the freight market. We would expect the continued improving outlook to have a positive impact on both strands of our business, passenger and freight, and, with our additional vessel capacity in place, we are well positioned to capitalise on this improved economic environment.