ISC raises net income, welcomes arrival of “tonnage tax”
International Shipholding Corp. (ISC), the New Orleans diversified shipping company best known for its lighter aboard ships, reported net income of $220,000 for the third quarter, as compared to a net loss of $1.6 million for the same quarter in 2003, and welcomed the introduction of the new “tonnage tax” regime for U.S.-flag ships.Revenue for the third quarter rose 8 percent to $69 million. Operating income declined to $1 million, from $3 million in the third quarter of 2003, but this was offset by lower financial costs in the latest quarter.
“The combined operating results for our LASH (lighter aboard ship) liner services during the third quarter of 2004 were approximately in line with the results for the same quarter of 2003, in spite of higher fuel costs and unanticipated repairs,” the shipping company said.
Results for time charter vessels improved, primarily as a result of the late 2003 sale of a multipurpose vessel, which had operated unprofitably during the third quarter of 2003 following the termination of its charter to the U.S. Military Sealift Command.
However, ISC’s third-quarter result from a U.S.-flag coal carrier were down from the same quarter of 2003 as a result of the vessel being out of service eight days in 2004 for unscheduled repairs.
Results for the company’s Mexican rail/ferry service also dropped in the third quarter because of added rail hire related to delays and higher fuel costs.
The recently enacted American Jobs Creation Act of 2004 will allow ISC to change the United States tax treatment of its domestic and foreign shipping operations.
“We are currently analyzing the new law, which we expect to materially reduce our effective tax rate,” the company said. “The act will allow us to elect to replace the normal corporate income tax structure on a portion of our operations with a ‘tonnage tax,’ and will allow us to defer the recognition of earnings on our foreign operations until those earnings are repatriated.”
For the first nine months of 2004, ISC posted net income of $5 million on revenue of $199 million, as compared to net income of $4 million and revenue of $196 million for the same period of 2003.
For the first nine months, income from the LASH liner service improved over the comparable period of 2003 primarily as a result of improved cargo volume in its transatlantic trade in spite of higher fuel costs and weather delays, the company said.
ISC is listed on the New York stock exchange.
