Ferry Division lifts ICG’s EBITDA

2024-03-27T19:22:45+00:00 March 27th, 2024|Finance|

Ferry, terminal, container and logistics conglomerate, Irish Continental Group (ICG), saw last year’s revenue decrease by €12.9 mill (2.2%) to €572 mill.

EBITDA increased by €5.4 mill to €132.6 mill, primarily due to a strong performance in the Ferries Division, which includes Irish Ferries.

Within this division, the recovery in passenger markets, the strong position in freight markets and the introduction of duty-free, lifted the Division to record levels of activity and revenue.

In May, 2023, the Group chartered ‘Oscar Wilde’ (ex Tallink’s ‘Star’) for an initial 20 month period with further extensions and purchase options. She initially entered service on the Rosslare/Pembroke Dock route, replacing the chartered ‘Blue Star 1’.

The Group also chartered the freight ro-ro ‘Norbay’ on a short-term basis, replacing the ‘Epsilon’, which was returned to her owner at the end of the charter.

The Container & Terminal Division performance was more challenging. However, this came against a backdrop of a number of years of record growth and profitability.

Overall, volumes and profitability have reduced, primarily driven by weak export and import levels in China and the impact of supply chain difficulties and the resulting over stocking had on reducing volumes in the earlier part of the year.

Despite the activity levels and demand activity reduction, the Group took advantage of its flexible cost base to maintain strong levels of profitability.

Last year saw another strong period of cash generation for the Group, further strengthening the balance sheet. Cash generated from operations of €136.7 mill (2022 = €132 mill) was used to fund capital expenditure of €21.8 mill and returns to shareholders of €45.8 mill via a combination of dividends and share buybacks.

Net debt at the year end fell by €27.4 mill to €143.7 mill (2022 = €171.1 mill).

Commenting on the results, Chairman, John McGuckian said; “Last year, I described 2022 as not just a year of recovery, but of building for long-term sustainable growth and stating our ambition to turn our full attention to maximising the opportunities that have arisen for the Group over the last few years.

“While 2023 did not yet see the maximisation of those opportunities, it did see significant progress towards it.

“2023 was another strong year for the Ferries Division and while the Container and Terminal Division experienced challenging trading conditions, the investment and modernisation of our facilities mean we are in an excellent position to capitalise on opportunities in the future.

“Capital allocation has always been a key focus in this company and our balance sheet strength allows us to take advantage of opportunities as they arise, “ he said.

The operating profit for the year was €68.4 mill, a rise of 2.5% The profit before tax was €63.3 mill, compared to €62.5 mill in 2022 while operating profit was €68.4 mill (2022 = €66.7 mill).

For the Ferries Division, EBITDA was €106.9 mill (2022 = €95.7 mill). The Division saw increased revenues arising from higher volumes, particularly on the Dover/Calais service. Fuel costs were also lower than the previous year, however this was offset by lower surcharges.

As in the previous year, when the Group also faced challenging trading conditions, ICG’s diversified revenue streams and flexible cost model allowed us to further strengthen our balance sheet.

Cash generated from operations amounted to €136.7 mill (2022 = €132 mill), which funded strategic capital expenditure of €21.8 mill, share buybacks of €21.4 mill, dividends of €24.4 mill and net repayments of borrowings of €14.4 mill.

Net debt at 31st December, 2023 stood at €143.7 mill (2022 = €171.1 mill).

ICG operates through two divisions; the Ferries Division and the Container and Terminal Division. The Ferries Division, which owns and manages the Group’s fleet, operates under the Irish Ferries brand, offering passenger and ro-ro freight services. The Division is also engaged in ship chartering activities with vessels chartered within the Group and to third parties.

This Division enjoyed a 3.1% rise in revenue to €412.3 mill.

Revenue in the first half of the year increased by 7.1% to €179.8 mill (2022 = €167.9 mill), while in the second half revenue increased by 0.2%, to €232.5 mill (2022 = €232 mill).

EBITDA increased to €106.9 mill (2022 = €95.7 mill) while operating profit was €52.1 mill, compared to €46.4 mill in 2022.

Fuel costs were €92.7 mill, a decrease of €11.9 mill on the previous year.

In total, Irish Ferries operated 14,250 sailings in 2023 (2022 = 13,642), the increase being due to additional sailings on the Irish Ferries Dove /Calais service.

It was estimated that the overall car market, on the routes that operated by the Division (Republic of Ireland to UK/France and the Dover Straits), grew by about 11.6% in 2023 to 4,461,000 cars. However, this is still 15% below pre-pandemic levels in 2019.

ICG’s share during the year increased over 2022 by 12.6% to 645,700 cars (2022=573,400 cars). This increase was due to the continued recovery in passenger markets and the benefit of a full year three ship operation on the Dover/ Calais route.

The total sea passenger market (ie, comprising car, coach and foot passengers) on the routes increased by 15% on 2022 to total 19 mill passengers.

ICG’s passenger numbers increased by 20.2% to 2,781,700 (2022=2,315,000).

The Group also continued to charter a number of vessels to third parties last year. Overall external charter revenues were €17.2 mill for the period (2022= €17.2 mill).