Barge line posts profit despite weather, oil and steel prices
American Commercial Lines Inc. today announced first quarter net profit of $2.3 million, compared to a net loss of $1.1 million for the first quarter of 2007
Revenue for the quarter increased 18.5 percent to $270.5 million from $228.2 million for the first quarter of 2007.
Michael P. Ryan, president and chief executive officer, said inclement weather drove a 70 percent increase in idle barge days compared to the prior year and resulted in twice as many lost production days at the company’s Jeffboat shipyard.
“This resulted in significant inefficiencies in our transportation business and lower than expected manufacturing output. In addition, our operating costs continued to escalate, largely driven by an almost 60 percent increase in fuel cost per gallon over the first quarter of 2007,” he said.
“Despite these factors and weaker import demand as a result of the falling U.S. dollar, we continued to see positive barge freight pricing. We achieved productivity-related improvements in our manufacturing margins during the quarter. We will continue to execute our strategy and manage the business through these challenges, while implementing strict discipline around cost control.”
The transportation segment’s revenue improved 16.3 percent to $204.8 million in the first quarter, driven by increases in outside towing and charter/day rate revenues combined with an overall 16.1 percent increase in affreightment rates, largely driven by fuel escalation, on 4.5 percent lower affreightment ton-miles.
On average, compared to the first quarter of 2007, the fuel neutral rate on the dry freight business increased 5.1 percent and the liquid freight business increased 6.7 percent. Total volume measured in ton-miles declined in the first quarter to 10 billion from 10.2 billion in the same period of the prior year, a decrease of 1.9 percent. On average, 5.3 percent fewer barges operated in the first quarter of this year compared to the first quarter of 2007.
Manufacturing revenue was $64.1 million in the first quarter compared to $52.1 million during the same period last year. The company said the increase was driven by higher steel price pass-throughs and the additional liquid barge sales.