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Barge operator K-Sea Transportation Partners L.P. has reported a year-on-year decrease in net income of almost 60 percent during the last fiscal quarter.

Net income for the three months ended June 30, 2009 was $2.6 million, or $0.16 per share, a decrease of $3.8 million compared to net income of $6.4 million, or $0.45 per share, for the three months ended June 30, 2008.

The company reported operating income of $8.3 million, a decrease of $3.5 million, or 30 percent, compared to the fourth fiscal quarter ended June 30, 2008.

K-Sea said the decline in operating income and EBITDA resulted from a $4.7 million decrease in net voyage revenue, which was attributable to reduced customer needs and the transitioning of certain of vessels from contracted service to the spot market.

This decrease was partially offset by a $0.8 million reduction in general and administrative expenses as a result of cost reduction efforts the company implemented.

Meanwhile, net income for the fiscal year ended June 30, 2009 fell by $11.8 million, or 46 percent, to $13.9 million, or $0.88 per share, compared to a net income of $25.7 million, or $1.95 per share for the year ended June 30, 2008.

K-Sea said the fiscal 2009 year was adversely impacted by the $9.1 million decrease in operating income and the $2.5 million negative swing in other expense (income), net.

Commenting on the results, President and CEO Timothy J. Casey said, “Fiscal 2009 was an extremely challenging year in our country’s economy and financial system, as well as for K-Sea. In addition to an unprecedented decline in U.S. petroleum product demand, which was pronounced in our fourth fiscal quarter, our full year results were negatively impacted by unusual items that total approximately $4.8 million.

"At the end of June 2009, our fleet was approximately 70 percent contractually committed for the next twelve months. At June 30, 2010, assuming extension options are exercised by our customers and before adding any new period charter we may enter into, our contract cover will be approximately 60%. We believe these longer term arrangements have enabled us to weather the industry down-turn better than our competitors.

"Notwithstanding the current environment, we remain very optimistic about K-Sea’s future. We focus on transporting cargoes in the range of 20,000 to 150,000 barrels. The aggregate industry capacity in this size range approximates 18.7 million barrels, of which 28% are single-hull units.

"Recently, there has been a noticeable trend for customers to increasingly prefer double-hull vessels over single-hulls. If all barges currently contracted to be constructed are in fact built and placed into service, and if all existing single-hulls are removed from service, total capacity in this size range would decline by approximately 18%. As the largest operator of barges in this size range, our market position would be enhanced," the company added.