ICG feels the heat – to open cross Channel service

2021-03-26T23:28:36+00:00 March 26th, 2021|Finance|

Maritime transport group, Irish Continental Group (ICG) reported a revenue decrease of €80.3 mill (22.5%) to €277.1 mill for 2020.

EBITDA decreased by €44.7 mill to €42.1 mill, principally due to Covid-19 travel restrictions on the passenger ferry business.

Year end net debt after total capital expenditure of €30.1 mill was €88.5 mill, 2.1 times EBITDA (pre non-trading items), and 1.7 times under banking covenant definitions.

However, ICG reported a strong financial position with available liquidity comprising cash and committed bank facilities of €240.8 mill as at 31st December, 2020.

Commenting on the results, Chairman John McGuckian, said, “2020 was an exceptionally challenging year for the Group, with the restrictions placed on travel due to the Covid-19 pandemic.

“While these restrictions brought large-scale disruption and reductions in our passenger business, the other parts of our business proved resilient throughout the entire year. Our ro-ro freight operations grew in 2020 despite the operational and market difficulties presented by the pandemic.

“The Container and Terminal Division largely maintained its profitability while it optimised capacity levels to meet market demands.  The Group maintained services on all its shipping routes to the UK and Continental Europe, and operations at its container terminals. Both were critical to maintaining Ireland’s supply chains during this challenging year.

“I would like to take this opportunity to thank all our colleagues who made the retention of these critical services possible in these difficult times, but in particular our colleagues on our front line in the ports, on our ships and in our terminals. During this most difficult year, their dedication to their roles kept our ships sailing, our terminals operating and crucially, our supply lines open,“ he said.

Out of the revenue decrease last year, €79 mill was attributed to lower passenger revenues.

EBITDA in the Ferries Division decreased by 66.8%, to €22.3 mill, while EBITDA in the Container and Terminal Division increased by 1%, to €19.8 mill.

In December, 2020, the Group’s principal defined benefit pension scheme trustee entered into a buy-out transaction to transfer the liabilities relating to pensioners (at the transaction date) to a third-party insurer.

This transaction materially reduces the size and risk of the scheme and has resulted in a non-trading expense in the year of €11.2 mill.

In 2019, ICG had incurred a non-trading gain of €14.9 mill relating to the sale of the cruise ferry ‘Oscar Wilde’.

Overall, the Group generated an operating loss or EBIT of minus €10.4 mill (2019: €64.9 mill profit). Cash generated from operating activities amounted to €46.1 mill (2019: €84.8 mill), and net debt reduced from €129 mill to €88.5 mill.

ICG operates through two divisions – Ferries Division and Container and Terminal Division.

The Ferries Division operates under the Irish Ferries brand offering passenger and ro-ro freight services. This division is also engaged in ship chartering activities with vessels chartered within the Group and to third parties.

The Container and Terminal Division includes the intermodal shipping line Eucon, as well as the division’s strategically located container terminal in Dublin and its terminal operations in Belfast.

Revenue for the Ferries Division was 33.4% lower at €141.4 mill (2019: €212.4 mill). EBITDA decreased by 66.8% to €22.3 mill (2019: €67.2 mill) primarily due to Covid-19 travel restrictions on the passenger business.

EBIT decreased by 145.8% to €(23.5) mill (2019: €51.3 mill), reflecting the result of non-trading items and the decrease in EBITDA.

It is estimated that the overall car market, to and from the Republic of Ireland, fell by around 63.5% in 2020 to 284,000 cars, while the all-island market, ie including routes into Northern Ireland, is estimated to have decreased by 51.8%.

Irish Ferries’ car carryings during the year were down on the previous year by 65.8% to 137,100 cars, (2019: 401,300 cars).

Resulting from the restrictions imposed and other Covid-19 considerations, a decision was made not to operate the fast craft ‘Dublin Swift’ given the available passenger capacity on the conventional ferries.

Total sea passenger market (ie comprising car, coach and foot passengers) to and from the Republic of Ireland decreased by 62.5% on 2019 to a total of 1.1 mill passengers, while the all-island market decreased by 56.2%.

Irish Ferries’ passenger numbers decreased by 66.3% at 519,000 (2019: 1.54 mill). In the first half of the year, Irish Ferries’ passenger volumes fell by 63.9% and in the second half of the year, which is seasonally more significant, the decrease in passenger numbers was 68.1%.

Later is was announced that Irish Ferries is to operate on the Dover/Calais route from June of this year.

The Isle of Inishmore’ is to be transferred to the English Channel with additional capacity being added in the coming months.

As part of the company’s commitment to the movement of freight on and off the Island of Ireland to both the UK and Europe, this additional capacity on the Dover/Calais route will significantly strengthen the capacity and reliability of the landbridge for exporters and importers.

Hauliers will now have one operator providing an inclusive service on the Dublin/Holyhead, Rosslare/Pembroke and Dover/Calais routes., which will allow exporters and importers easier, cheaper, and quicker access to European markets via the Common Transit Convention.

It is intended to offer passenger services on the route. This will be dependent on the easing of Covid-19 travel restrictions.

Doug Bannister, Port of Dover CEO, said: “We are delighted to welcome Irish Ferries to Dover.  This announcement gives the millions of customers across the UK and the Republic of Ireland who value the intrinsic benefits of the shortest sea crossing to Europe, the prospect of even more choice.

“We believe the inclusive landbridge product will be popular with Irish exporters and will strengthen the just in time supply chain into the European Union.  This is a clear signal of market confidence in the Dover route and will complement the resilient services currently provided.

“We wish Irish Ferries every success and look forward to having them on the route in the summer and working together as part of the Dover team building the future success of the Short Straits,” he said.

Jean-Marc Puissesseau, Chairman, Port of Calais, added: “The commencement of the service operated by Irish Ferries emphasises the strategic position of the port of Calais in the trade between Ireland, the UK and the continent. It is a clear sign of confidence just a few weeks before the opening of the new port of Calais.”