Sea Containers marine
container lessor, passenger and freight transport operator, and leisure industry investor, today announced its results for the first quarter ended March 31, 2003. Net earnings for the period were a loss of $10.3 million (loss of $0.49 per common share) on revenue of $351 million, compared with a loss of $6 million (loss of $0.32 per common share) on revenue of $218 million in the prior year period.
The first quarter is traditionally loss making because of the seasonality of the company's passenger and freight transport business
. It is also the weakest period for marine container leasing because of reduced consumer purchasing post Christmas and Asian holidays which cause factory closures. In the first quarter of 2002 the company owned only 50% of Silja Oyj Abp while in the first quarter of 2003 it owned 100%, thus it had to include 100% of Silja's first quarter seasonal losses this year.
Silja's first quarter 2003 revenue was $115 million compared with $94 million in the year earlier period. This winter has been exceptionally harsh with heavy ice conditions which cause fuel consumption to rise and prevent operation of aluminum hulled fast ferries. Fuel costs were $3 million higher than budget in the period due to ice and fears of disruption to world oil supplies
because of the Iraq war and Venezuelan strikes, causing a short term spike in prices. Oil prices have now declined back to more normal levels and Silja is 50% hedged for the second and third quarters at prices lower than current levels
so it should recover the overspend in the first quarter in the remainder of the year. (The company's other ferry operations are similarly hedged.) Silja also had a large passenger ship out of service for drydocking (this work is always done in the slow first quarter) and this caused a $1 million reduction in revenue.