Barge operators report earnings
Two U.S. barge companies have reported mixed third quarter earnings, and a strong market for liquid commodities.
Kirby Corp., a specialist in moving liquid cargo, said it had record profit of $34.4 million compared with $25.9 million for the 2006 third quarter.
Consolidated third quarter revenue was a record $302.6 million, up 14 percent over the $264.6 million reported for the 2006 third quarter.
“Our record third quarter results mark the 15th consecutive quarter that our earnings exceeded the same quarter of the previous year,” said Joe Pyne, Kirby’s president and chief executive officer. “Our marine transportation demand fundamentals remain the best we have seen since the early 1980s, with our fleet of tank barges and towboats essentially fully utilized. Pricing for our services continues to trend upward. Our diesel engine services segment continues to benefit from strong service activity and direct parts sales in the majority of its markets.”
Pyne said in the fourth quarter, “we expect our marine transportation business levels to remain strong and anticipate contract and spot market rate increases to be consistent with the first nine months of 2007. We anticipate that some deterioration in operating conditions caused by winter weather will increase delay days and decrease efficiency. Business levels in our diesel engine services markets remain strong as we enter the fourth quarter.”
Kirby also has a division that services diesel engines,
American Commercial Lines Inc., which moves both dry and liquid commodities, said net income for the quarter was $15.9 million down from $28.4 million for the third quarter of 2006.
Revenue fell to $258.4 million from $266.6 million for the third quarter of 2006
American Commercial said total barge industry tonnage for the three and nine months ended Sept. 30, declined 8.1 percent and 3.4 percent, respectively. Grain and bulk commodities saw decreases of 27.4 percent for the third quarter and 18.5 percent for the nine-month period. Liquid commodities improved 9.6 percent for the third quarter and 14.2 percent for the nine-month period..
Mark R. Holden, president and CEO, said, “Volatility persists within most of our major markets in our transportation business, including weak bulk commodity tonnage and the continued unpredictability of the U.S. grain markets. For the three and nine months ended Sept. 30, our volumes for all grain and bulk commodities combined were down 10.3 percent and 11.4 percent, respectively. Though improved over the first half, grain volume and pricing continued to lag prior year in the third quarter.”
Holden said our bulk commodities are being negatively impacted by the weakness of the U.S. dollar, which slows the flow of imports and are also being affected by the severe housing market which impacts related bulk commodities, including cement.”
“We continue to diversify our book of business toward a more stable, predictable mix of commodities, including more energy related commodities (such as coal) and liquid commodities,” he said.
“Despite the challenges we have experienced this year, we are remarkably on track to record the second best year in the company’s 93-year history, surpassed only by last year,” Holden added.