Tropical’s profit rises despite hurricanes
Tropical Shipping, the U.S./Caribbean shipping arm of the Nicor Inc. group, raised its operating income 70 percent to $5.1 million in the third quarter despite the cost and service disruptions of hurricanes that affected the region’s ports and businesses in recent months.
“Our shipping business is performing exceptionally well,” said Thomas L. Fisher, Nicor’s chairman and chief executive officer.
Tropical improved its operating margin to 7 percent of revenue in the latest quarter from 5 percent a year earlier.
“Shipping operating income increased in the third quarter to $5.1 million from $3 million in 2003 primarily due to improved average rates offset in part by cost increases and service disruptions caused by recent hurricanes,” Nicor said.
Tropical had to divert ships from their normal schedules and routes because of the hurricanes, which affected many locations, including Florida. All of the carrier’s containerships sail to and from Florida.
Yet, shipping revenue at Tropical jumped 15 percent in the third quarter to $73.2 million, from $63.8 million.
By contrast, Nicor reported operating losses from its non-shipping activities — gas distribution and energy ventures — for the third quarter. These resulted in a net quarterly deficit of $11.6 million at group level, as compared to a breakeven result in the third quarter of 2003.
For the nine months ended Sept. 30, shipping operating income increased 19 percent to $16.2 million from $13.6 million in 2003, due primarily to higher volumes shipped. Nicor said shipping operating income was held back by cost increases unrelated to volumes, impacts on revenues and costs due to 2004 third-quarter hurricanes, and the non-recurrence of a vessel sale gain recorded in 2003.