Business buoyant at Irish Continental/Irish Ferries for HY 2022

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Irish Continental Group plc (ICG), the leading Irish-based maritime transport group, reports its financial performance for the half year ended 30 June 2022.

Highlights

Financial summary    
HY 2022* HY 2021** Change %
Revenue €263.1m €141.6m +85.8%
EBITDA*** €47.3m €12.7m +272.4%
Operating profit / (loss) €17.4m €(10.3)m
Profit / (loss) before tax €15.4m €(12.2)m
Basic earnings per share 8.0c (6.8)c
Interim dividend 4.64c nil +100.0%
Net debt*** €154.5m €112.1m +37.8%
Net debt (pre-IFRS 16)*** €105.9m €61.7m +71.6%

* HY 2022: Half Year up to 30 June 2022, ** HY 2021: Half Year up to 30 June 2021
*** Additional information in relation to these APMs is disclosed in the Appendix

Volume movements    
 HY 2022
’000
HY 2021
’000
Change %
Cars 214.2 29.8 +618.8%
RoRo freight 330.2 126.7 +160.6%
Containers shipped (teu*) 169.3 176.7 (4.2%)
Port lifts 164.9 165.5 (0.4%)

*teu: twenty-foot equivalent units

The HY 2022 result is reported against the background of a gradual return towards pre-pandemic travel patterns after the disruption of the last two years. The Group has continued to focus on strategic development and has maintained a strong liquidity position.

Key highlights in HY 2022 include;

  • Group revenue generated totalling €263.1 million, €121.5 million more than HY 2021.
  • Operating profit generated was €17.4 million, compared to an operating loss of €(10.3) million in HY 2021.
  • EBITDA generated of €47.3 million, €34.6 million more than HY 2021.
  • Gross cash balances of €38.6 million (31 December 2021: €38.5 million).
  • Net debt at €154.5 million, €12.3 million higher than at the beginning of the year.
  • The Directors have declared an interim dividend of 4.64 cent per share (2021: €nil) payable on 7 October 2022 to shareholders on the register on 16 September 2022.
  • Acquisition and commissioning completed of the ropax vessel, the Isle of Inisheer, which is now one of three vessels serving the Dover – Calais route.
  • Acquisition of container vessel, the CT Pachuca, which is being operated within the Group’s container services.
  • Further investment in environmentally friendly port equipment at Dublin Ferryport Terminals and commencement of operations at Dublin Ferryport Inland Depot.

Commenting on the results, Chairman John B. McGuckian noted; “HY 2022 was one of significant improvement in Group performance following the challenging trading environment over the previous two years following the imposition by governments of travel restrictions in early 2020 as preventative measures during the Covid-19 pandemic.

The gradual return of passenger travel towards more historic patterns and the continuing support of our freight customers together with the new ferry service on Dover – Calais drove HY 2022 revenues to a record level of €263.1 million. However, the Group also had to deal with the challenges of cost inflation particularly energy prices. Nevertheless, the Group reported a profit before tax of €15.4 million, €27.6 million ahead of last year.

On a strategic level, the Group continues to invest in its businesses, with over €50.0 million expended on strategic assets in the half year period. The Dover – Calais service, which commenced on 29 June 2021 was expanded to a three vessel service in May 2022 and now offers up to 30 sailings per day. We continue the expansion and modernisation of our container terminals with the latest automated and environmentally friendly equipment.

The improvement in revenue performance has continued to date. However, in the near term, the Group is cautious regarding inflation pressures and the associated macro-economic impact together with the challenges in passing cost increases through the logistics chain.”

Financial Highlights      
HY 2022 HY 2021 Change %  FY 2021*
Revenue €263.1m €141.6m +85.8% €334.5m
EBITDA €47.3m €12.7m +272.4% €52.3m
Operating profit / (loss) €17.4m €(10.3)m €(0.2)m

* FY 2021 = Year End up to 31 December 2021

ICG reports its results for HY 2022 against the background of a gradual return towards pre-pandemic travel patterns after the disruption of the last two years.

The Group recorded revenue of €263.1 million compared with €141.6 million in HY 2021, an increase of 85.8%. Earnings before interest, tax, depreciation and amortisation (EBITDA) were €47.3 million compared with €12.7 million in HY 2021. Group fuel costs increased by €35.3 million (155.5%) to €58.0 million from €22.7 million. Operating profit was €17.4 million compared with a €(10.3) million loss in HY 2021. A profit before tax of €15.4 million is reported compared with a loss before tax of €(12.2) million in HY 2021.

There was a net finance charge of €2.0 million (2021: €1.9 million) which includes net bank interest payable of €1.4 million (2021: €1.3 million), lease interest €0.7 million (2021: €0.6 million) and net pension interest income of €0.1 (2021: €nil). The tax charge amounted to €0.9 million (2021: €0.5 million). Basic EPS was 8.0c compared with (6.8)c in HY 2021. Adjusted EPS amounted to 8.0c versus (6.8)c for HY 2021.

Operational Review

Ferries Division

Financial Summary      
 HY 2022 HY 2021 Change % FY 2021
Revenue* €167.9m €62.9m +166.9% €175.5m
EBITDA €29.8m €(0.6)m €23.2m
Operating profit / (loss) €5.7m €(18.9)m €(17.4)m

* Includes intersegment revenue of €15.2 million (HY 2021: €5.8 million) (FY 2021: €13.8 million)

The division comprises Irish Ferries, a leading provider of passenger and freight ferry services between Ireland / UK, Ireland / France and the UK / France and the chartering of vessels.

Revenue in the division was €167.9 million (2021: €62.9 million) while EBITDA was €29.8 million (2021: €(0.6) million). Operating profit was €5.7 million compared to a loss of €(18.9) million in HY 2021.

The performance of the ferries operations in HY 2022 was significantly improved on HY 2021 as travel patterns gradually returned towards pre-pandemic levels after the disruption caused by Covid-19 across 2020 and 2021. The impact of the Dover – Calais operations, which commenced on 29 June 2021, can also be seen in the result for the period as the service moved to a three vessel operation with the addition of the Isle of Inisheer.

Irish Ferries commenced services on the Dover – Calais route on 29 June 2021, initially with one vessel, the Isle of Inishmore. The Dover – Calais route is now served by three vessels. The Rosslare – Pembroke route previously served by the Isle of Inishmore is now operated by the chartered vessel Blue Star 1.  

Volumes – Total      
 HY 2022 HY 2021 Change % FY 2021
Car volumes (‘000) 214.2 29.8 +618.8% 203.6
Passenger volumes (‘000) 894.4 132.8 +573.5% 667.8
RoRo freight volumes (‘000) 330.2 126.7 +160.6% 290.0
Volumes – Legacy Routes      
 HY 2022 HY 2021 Change % FY 2021
Car volumes (‘000) 113.9 29.8 +282.2% 161.6
Passenger volumes (‘000) 421.2 132.8 +217.2% 546.3
RoRo freight volumes (‘000) 145.8 126.7 +15.1% 259.2

In HY 2022, total cars carried were 214,200, up 618.8% on the same period in HY 2021. Total passenger carryings were 894,400, an increase of 573.5% on HY 2021. This increase in carryings reflects a gradual return to normal travel patterns, versus a full six-month period of travel restrictions in HY 2021 in response to the Covid-19 pandemic. The increase also reflects the impact of six full months of trading on the Dover – Calais route, which commenced on 29 June 2021.

Freight carryings in HY 2022 were 330,200 units, an increase of 160.6% over HY 2021, while freight revenues increased 94.3%. These increases also reflect the impact of the Dover – Calais operations.

Chartering      
 HY 2022 HY 2021 Change % FY 2021
Charter revenue €23.3m €8.8m +164.8% €20.7m

The division owns eight container vessels, five of which are chartered intra division and three chartered externally to third parties. The increase in revenue primarily relates to a strong charter market driven by increased global trade and the addition of two vessels in the division. Charter revenue also includes earnings from the long term receivable relating to the bareboat hire purchase contract arising from the disposal of the Oscar Wilde in a prior period.

Costs      
 HY 2022 HY 2021 Change % FY 2021
Depreciation, impairment and amortisation €24.1m €18.3m +31.7% €40.6m
Employee benefits expense €9.5m €7.9m +20.3% €15.7m
Other operating costs €128.6m €55.6m +131.3% €135.5m
Total operating costs €162.2m €81.8m +98.3% €191.8m

Costs in the division increased by €80.4 million in HY 2022 compared to HY 2021. This increase was principally attributable to the operational costs associated with the Dover – Calais route and fuel costs. Total divisional fuel cost increased to €48.3 million from €17.1 million in HY 2021 due to higher global fuel prices and increased consumption in comparison with HY 2021.

Container and Terminal Division

Financial Highlights      
 HY 2022 HY 2021 Change % FY 2021
Revenue* €111.0m €85.2m +30.3% €174.0m
EBITDA €17.5m €13.3m +31.6% €29.1m
Operating profit €11.7m €8.6m +36.0% €17.2m

* Includes intersegment revenue of €0.6 million (HY 2021: €0.6 million) (FY 2021: €1.2 million)

Operational Highlights      
 HY 2022 HY 2021 Change % FY 2021
Volumes ’000 ’000 ‘000
Containers shipped (teu) 169.3 176.7 (4.2%) 346.6
Port lifts 164.9 165.5 (0.4%) 335.5

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

Revenue in the division increased by 30.3% to €111.0 million (2021: €85.2 million), EBITDA increased to €17.5 million (2021: €13.3 million), while operating profit increased to €11.7 million (2021: €8.6 million).

Total containers shipped by Eucon were down 4.2% at 169,300 teu (2021: 176,700 teu). This decrease was driven by weather disruption in the first quarter of the year and ongoing congestion at European ports. Fuel costs increased to €9.7 million from €5.6 million in HY 2021 due to increases in global fuel prices. Vessel charter rates also increased versus the corresponding period last year in line with global rates. Other costs increased in line with inflation.

Containers handled at our container terminals in Dublin and Belfast fell 0.4% to 164,900 lifts (2021: 165,500 lifts). Dublin Ferryport Terminals’ activity was down 1.0%, and activity at Belfast Container Terminal was up 0.6%.