Seaboard: Higher fuel prices raise sales, dampen earnings
Agricultural and shipping company Seaboard Corp. said its marine segment had lower operating income despite an increase in sales, primarily because of higher fuel prices.
Seaboard Marine had operating income of $12 million in its third quarter ending Sept. 27, compared to $20.3 million in the same 2007 period. Sales were higher, $254.9 million versus $204.6 million in the same 2007 term.
The higher sales reflect “higher cargo rates and, to a lesser extent, higher cargo volumes. Cargo rates were higher in certain markets primarily as a result of higher cost-recovery surcharges for fuel. Cargo volumes were higher as a result of the expansion of services provided in certain markets and continued favorable economic conditions in several Latin American markets served.”
The drop in operating profit reflects “significantly higher fuel costs for vessels on a per-unit shipped basis. Operating income also decreased as a result of higher operating costs on a per-unit shipped basis including trucking, charter hire and owned-vessel operating costs, terminal costs and stevedoring.”
“Although management cannot predict changes in future volumes and cargo rates or to what extent changes in economic conditions and operating cost increases will impact net sales or operating income, it does expect this segment to remain profitable for the remainder of 2008, although significantly lower than 2007.”
Headquartered in Shawnee Mission, Kan., Seaboard is also involved in business such as grain, pork, sugar and citrus.