CP Ships Limited announced an unaudited operating income for second quarter 2002 of $21 million. This was $18 million lower than the same period last year, but a $27 million improvement from the $6 million operating loss in first quarter 2002. Net income for the second quarter 2002 was $16 million compared to $35 million in the same period in 2001 and basic earnings per share was 20 cents compared with 40 cents.
"Given difficult market conditions, which lead many of our competitors to sustain losses, we consider our second quarter $21 million operating income to be an excellent result," said CP Ships' CEO Ray Miles.
Volume at 498,000 teu, a record for the second quarter, was up 6 percent from the same period last year. The decline in average freight rate during the second quarter slowed to 2 percent, following a 7 percent decline in the first quarter from fourth quarter 2001. However, average freight rate was down 14 percent from second quarter last year. EBITDA was $41 million and cash from operations before restructuring and spin-off payments was $27 million in the quarter.
Operating income for the first half 2002 was $15 million compared with $70 million in the corresponding period last year. Net income was $5 million compared with $60 million.
During the second quarter, CP Ships announced the acquisition of Italia di Navigazione for $40 million. The transaction is the continuation of a key element of CP Ships' overall strategy of making acquisitions to strengthen its regional market positions, build trade lane economies of scale and create new opportunities for growth. On 24th July regulatory approval was received and closing is expected in early August.
At the end of May, CP Ships announced its plan to raise capital in the equity and debt markets to provide greater financial flexibility and additional liquidity for future growth. Despite difficult financial market conditions, the transactions successfully completed in early July with the issue of 9.6 million common shares
for $95 million and $195 million from ten-year unsecured senior notes.
In June, the Lykes Ranger, first in a series of five new geared containerships ordered under the four-year $800 million ship replacement program, entered service on schedule in the Asia-Americas trade lane.
The previously announced 2002 annualized cost reduction target of $100 million remains on course and is likely to be exceeded. The ship fleet reduced from 78 on March 31, to 73 on June 30