CP Ships 1st-quarter earnings improve

CP Ships 1st-quarter earnings improve CP Ships earned a first quarter net income of $15 million on higher sales and freight rates, as compared to net earnings of $3 million in the first quarter of 2004.
   Operating income for the seasonally weak first quarter more than doubled to $29 million, from $11 million a year earlier. Revenue rose 19 percent to $966 million, despite a 5-percent decrease in volume to 533,000 TEUs due to schedule delays and service restructuring.
   The profit recovery came largely from a 25-percent jump in average revenue per TEU to $1,812, from $1,449 in the first quarter of 2004. Over the same period, the company’s cost per TEU rose 17 percent to $1,599, resulting in a somewhat wider operating profit margin for the carrier.
   CP Ships also reported that its average ocean freight rate, defined as revenue less inland, slot charter and other miscellaneous revenue divided by volume in TEU, rose 18 percent to $1,133. Average freight rate was also up 3 percent.
   “Our aim to improve freight rates in 2005 is off to a good start, outweighing the adverse impact of lower volume due mainly to schedule delays and service restructuring,” said Ray Miles, chairman of CP Ships.
   Commenting on its underperforming transatlantic operations, CP Ships said it made an operating income of $3 million in the first quarter, compared to a loss of $2 million in the first quarter of 2004. Higher transatlantic revenue more than covered higher costs. Transatlantic freight rates rose 3 percent between the fourth quarter of 2004 and the first quarter of 2005.
   CP Ships warned that there remains a risk of congestion developing during the year as industry volume recovers after the seasonally weaker first quarter.