Tonnage tax cuts boost International Shipholding’s earnings

Tonnage tax cuts boost International ShipholdingÆs earnings    A $7.7 million reduction in deferred tax after the enactment of the Jobs Creation Act allowed New Orleans-based International Shipholding Corp. to double its net yearlong earnings in 2004, and more than quadruple its earnings for the fourth quarter.
   Net earnings rose to $7.8 million in the fourth quarter from $1.7 million a year earlier, and increased to $12.8 million for the year from $5.5 million in 2003.
   “Passage of this new tax act, and our fourth quarter 2004 election for our qualified domestic operations to be taxed under the tonnage tax provision of the new law, rendered net deferred tax provisions booked in prior years unnecessary,” International Shipholding explained.
   Before the tax adjustment, the parent company of Waterman Steamship saw its fourth quarter operating income decrease to $564,000 from $3.6 million in the same quarter of 2003. Revenue from the company’s diversified shipping and other activities rose to $64 million from $62 million.
   International Shipholding reported an operating income of $11.9 million in 2004 down from $19.6 million in 2003. Revenue increased to $263.5 million from $257.8 million.
   In December the company chose to have its U.S.-flag operations, other than those of two ineligible vessels used exclusively in U.S. coastwise commerce, taxed under the new tonnage tax regime.
   Operationally, in spite of higher fuel costs and weather delays, the results of International Shipholding’s Lighter Aboard Ship liner services showed improvement during the fourth quarter and full year, the company reported. This resulted from improved cargo volumes after the lifting of steel import tariffs.
   Results for the company’s time charter vessels and pure car carriers were down in the fourth quarter and full year 2004. Results for International Shipholding’s Mexican rail/ferry service also deteriorated in 2004 as a result of higher than anticipated operating costs primarily due to machinery deficiencies, weather delays due to hurricanes and higher fuel costs.
   In early January, International Shipholding completed a public offering of $40 million of convertible exchangeable preferred stock.