Crowley Liner Services raises its operating income

Crowley Liner Services raises its operating income    Crowley Maritime Corp., parent company of Crowley Liner Services, is the latest shipping company to report strong volume growth and improved financial results from its liner shipping activities for 2003, with operating income from this business up 15 percent to $20.9 million.
   The result compares with an operating income on liner-shipping activities of $18.2 million in 2002, and shows operating margins as a percentage of revenue rising to 3.6 percent in 2003, from 3.4 percent in 2002.
   Crowley Liner Services, the main business of the diversified Crowley Maritime shipping group, increased its revenues 9 percent in 2003 to $578.6 million, as container and non-container volume rose 7 percent to the equivalent of 581,955 TEUs. The liner-shipping business also experienced a 102-percent increase in other logistics service revenues.
   However, Crowley reported a 0.2 percent decrease in average revenue per TEU last year, 'a result of competitive pressures in Latin America, which was partially offset by rate increases from the Puerto Rico and Caribbean Islands Service,” the company said.
   The increase in logistics revenues was primarily due to revenues earned from the acquisition of a transportation service provider in October 2002, and a transportation management company specializing in the apparel industry purchased in July 2003.
   Earlier this year, Crowley sold its logistics business in Venezuela.
   Crowley Liner Services’ operating expenses increased 9 percent in 2003 to $527.2 million in liner with the growth of its container and non-container volume. Crowley also reported increased expenses associated with the takeover of the two logistics companies, which are consolidated in its liner-shipping business results. In a filing to the U.S. Securities and Exchange Commission, Crowley said it paid about $3.4 million to acquire a transportation management company specializing in the apparel industry in July 2003 and another $3 million to buy a transportation service provider in 2002.
   Crowley Maritime, which has activities in liner shipping, ship assist and escort services, oil and chemical distribution and transportation services, and energy and marine services, reported a group operating income of $42.2 million for 2003, up from $40.6 million in 2002, and a net income of $12.8 million for last year, down from $17.3 million. Group revenue rose marginally last year, to $978 million, from $972.9 million in 2002.
   Besides its liner-shipping business, Crowley’s oil and chemical distribution and transportation services arm also reported improved results for 2003. By contrast, the ship assist and escort services segment of the group saw its operating income fall to $9.7 million last year from $13.6 million, and the energy and marine services business incurred a loss of $13.5 million in 2003, as compared to an operating profit of $2.1 million in 2002.
   Operating revenues from the energy and marine services segment dropped 21 percent last year to $70.2 million. Crowley said the fall was due to several factors: the vessel outfitting and mobilization and the transportation of oil exploration cargo to Sakhalin Island, Russia; and reduced government and commercial contract activity on the U.S. West Coast. This decrease was partially offset by increased vessel activity in the Gulf of Mexico.
   “Vessel utilization in this segment is very volatile and it is impacted by oil exploration activity and general economic conditions,” Crowley said. “We believe that the operating revenues for our energy and marine services will increase in 2004 as we have been awarded some additional work in Russia.”