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BUNKER INDEX :: Price Index, News and Directory Information for the Marine Fuel Industry
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Kirby posts $5m rise in net profit as revenue jumps 50.8%

Bunker barge operator achieves $32.5m net earnings.

Image credit: Pixabay CC0

Updated on 26 Apr 2018 18:12 GMT

Marine transportation firm and bunker barge operator, Kirby Corporation, posted a net profit of $32.5 million in the first quarter (Q1) of 2018. The figure represents a rise of $5.0m, or 18.1 percent, on the $27.5m achieved during the corresponding period a year ago.

Total revenue in Q1 jumped year-on-year (YoY) by $250.0m, or 50.8 percent, to $741.7m, up from $491.7m in Q1 2017.

Earnings before interest, tax, depreciation and amortization (EBITDA) in Q1 rose by $12.9m, or 13.8 percent, to $106.3m.

Marine transportation

Marine transportation revenue in Q1 dipped $3.2m, or 0.9 percent, to $340.4m, whilst operating income for the period dropped $19.6 million, or 54.8 percent, to $16.2m.

The operating margin for the marine transportation segment was 4.8 percent compared with 10.4 percent a year ago. This was said to be due to weaker pricing in the marine and coastal markets.

In the coastal market, barge utilization rates improved into the high 70 percent range, primarily due to the impairment and early retirement of 12 barges during Q4 2017.

In the inland market, barge utilization was in the mid-90 percent range for the quarter, compared to the high 80 percent to low 90 percent range in Q1 2017.

Overall, inland market revenue increased YoY, primarily due to the contribution from the Higman acquisition. The operating margin for the inland business was in the low double digits during the quarter, and was impacted by the Higman acquisition, the adoption of an amended employee stock plan, and severance.

Revenue from the transportation of black oil and refined petroleum products was lower YoY, while revenue from the transportation crude oil and petrochemicals rose.

Commenting on the results, David Grzebinski, Kirby's president and chief executive officer, said: "Operationally, Kirby's first quarter results were in line with expectations, with strength in Distribution and Services offsetting some temporary weakness in Marine Transportation due to weather. Despite the temporary challenges in marine transportation, the inland sector continued to show early signs of a recovery during the first quarter, with spot market pricing increasing 10 percent to 15 percent compared to the 2017 fourth quarter. Increased customer demand and unusually poor seasonal operating conditions contributed to tight market dynamics across the industry. Although our barge utilization rates were in the mid-90 percent range throughout the quarter, our operations were challenged by increased delay days caused by adverse weather conditions across much of inland waterway system. Transaction fees and maintenance costs related to Higman also negatively impacted the quarter's results, but we are very pleased with the progress integrating Higman.

"In our coastal marine business, market conditions stabilized during the quarter, with term and spot contract pricing remaining unchanged relative to the 2017 fourth quarter. Utilization rates were in the high 70 percent range. While recent pricing stabilization is encouraging, we continue to expect difficult coastal market conditions in the near term. As a result, we took additional measures to reduce costs, including further workforce reductions and temporarily taking additional barges out of service."

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