Horizon Lines Continue to Improve Financial Performance in Q2 2013

MarineLink.com
Monday, August 05, 2013

Horizon Lines, Inc. reported financial results for the fiscal second quarter ended June 23, 2013 with an almost doubled EBITDA from the same period last year.

"Horizon Lines second-quarter adjusted EBITDA nearly doubled from the same period a year ago, driven largely by reduced vessel charter expense, lower dry-dock transit and crew-related expenses, lower fuel consumption, higher non-transportation revenue, reduced overhead and gains on the sale of assets," said Sam Woodward, President and Chief Executive Officer. "The positive factors driving adjusted EBITDA growth were partially offset by reduced container volume and increased vessel operating expenses. Second-quarter results demonstrate that we are executing on our plan to improve Horizon Lines' financial performance."

Second-Quarter 2013 Financial Highlights  

  • Volume, Rate & Fuel Cost – Container volume for the 2013 second quarter totaled 56,159 revenue loads, down 6.0% from 59,768 loads for the same period a year ago. The decline was primarily a result of the reduced number of sailings between Jacksonville and San Juan. Unit revenue per container totaled $4,263 in the 2013 second quarter, compared with $4,269 a year ago.  Second-quarter unit revenue per container, net of fuel surcharges, was $3,250, up 2.6% from $3,168 a year ago. Vessel fuel costs averaged $659 per metric ton in the second quarter, 10.1% below the average price of $733 per ton in the same quarter a year ago.  
  • Operating Revenue – Second-quarter operating revenue declined 4.1% to $259.8 million from $270.9 million a year ago.  The factors driving the $11.1 million revenue decrease were an $11.5 million volume contraction, largely due to reduced sailings out of Jacksonville, and lower fuel surcharges of $8.2 million.  These items were partially offset by a $4.5 million increase in container revenue rates, and a $4.1 million rise in non-transportation revenue.  The improvement in non-transportation revenue was primarily due to an increase in certain transportation services agreements and other services.
  • Operating Income – Operating income for the second quarter totaled $16.0 million, compared with $1.0 million a year ago.  The $15.0 million improvement was primarily driven by a $3.9 million reduction in vessel lease expense, $2.9 million in lower dry-dock transit and crew-related expenses, and a $2.5 million improvement in fuel recovery primarily due to lower fuel consumption.  2013 second-quarter operating income includes expenses totaling $0.5 million primarily associated with the return of excess equipment related to the 2012 fourth-quarter service change in Puerto Rico. 2012 second-quarter operating income includes $1.2 million of antitrust-related legal expense, refinancing costs, an impairment charge and severance expense. Excluding these items, second-quarter 2013 adjusted operating income totaled $16.5 million, compared with $2.2 million a year ago.  (See reconciliation tables for specific line-item amounts.)
  • EBITDA – EBITDA totaled $28.8 million for the 2013 second quarter, compared with negative $0.6 million for the same period a year ago.  Adjusted EBITDA for the second quarter of 2013 was $29.2 million, an increase of 92.1% from $15.2 million for 2012.  EBITDA and adjusted EBITDA for the 2013 and 2012 second quarters were impacted by the same factors affecting operating income.  Additionally, 2013 adjusted EBITDA reflects the exclusion of $0.1 million of non-cash gains on marking the conversion feature in the company's convertible debt to fair value.  Adjusted EBITDA for the 2012 second quarter also reflects the exclusion of a primarily non-cash net loss of $14.9 million, resulting from a $47.7 million loss on the conversion of debt to equity, which was partially offset by a $32.8 million gain on marking the conversion feature of the company's convertible debt to fair value.  (See reconciliation tables for specific line-item amounts.)
  • Net Loss – The second-quarter net loss from continuing operations totaled $0.9 million, or $0.02 per share, on a weighted average of 35.6 million shares outstanding. This compares with a year-ago net loss of $31.1 million, or $1.55 per share, on a weighted average of 20.1 million shares outstanding.  On an adjusted basis, the second-quarter net loss from continuing operations totaled $0.1 million, or $0.00 per share, compared with an adjusted net loss of $14.8 million, or $0.74 per share, a year ago.  The 2013 and 2012 second-quarter net losses reflect the same items impacting adjusted EBITDA.  Additionally, the adjusted net loss for the 2013 second quarter excludes the non-cash accretion of the estimated multi-employer pension plan withdrawal liability related to our move from Elizabeth, New Jersey to Philadelphia, Pennsylvania, and the adjusted net loss for both the 2013 and 2012 periods excludes the non-cash accretion of payments associated with antitrust-related legal settlements, and includes the tax impact of the adjustments. (See reconciliation tables for specific line-item amounts.)

Outlook
Management continues to expect full fiscal year revenue container volume, excluding the loss of revenue loads associated with the reduced number of sailings between Jacksonville and San Juan, and rates to be slightly higher than 2012 levels.  Revenue container rate increases are necessary to mitigate contractual and inflationary growth in expenses, including the company's vessel payroll and benefits, stevedoring, port charges, wharfage, inland transportation, and rolling stock costs, among others.
 

Maritime Reporter September 2014 Digital Edition
FREE Maritime Reporter Subscription
Latest Maritime News    rss feeds

People & Company News

Drydocks World to Repair “High Island IV”

Drydocks World, the international service provider to the shipping, maritime, offshore, oil, gas, and energy sectors, has been chosen to carry out the drydocking

Decade Old India Shipping Summit Makes History

In ten years, India Shipping Summit held consistently in Mumbai, has sailed on a robust growth course despite the worldwide witnessing recessionary waves buffeting any endeavors to grow and gain.

Liebherr to Deliver RTGs to Mayotte and Manila

Liebherr confirms orders for variable speed RTGs and electric RTGs. DPWorld Asian Terminals Inc. has placed an order with Liebherr Container Cranes for a further 5 RTGs at its Manila facility.

Ports

UN: Ship Inspections near Somalia for Arms, Charcoal

The United Nations Security Council authorized the inspection of boats suspected of carrying illegal shipments of charcoal or weapons to and from Somalia on Friday,

UN Authorizes Ship Inspections Near Somalia For Arms, Charcoal

The United Nations Security Council authorized the inspection of boats suspected of carrying illegal shipments of charcoal or weapons to and from Somalia on Friday,

Liebherr to Deliver RTGs to Mayotte and Manila

Liebherr confirms orders for variable speed RTGs and electric RTGs. DPWorld Asian Terminals Inc. has placed an order with Liebherr Container Cranes for a further 5 RTGs at its Manila facility.

Finance

Areva-Siemens Raises Claim Over Finnish Reactor Delays

The French-German consortium Areva-Siemens , the supplier of Finland's much-delayed Olkiluoto-3 nuclear reactor, has increased its claim against Finnish utility Teollisuuden Voima (TVO),

Ezra Bags $70m in Offshore Contracts

Ezra Holdings Limited, a leading contractor and provider of integrated offshore solutions to the oil and gas industry, today announced that the Group’s Subsea Services division,

WFW Advises ING Bank on $340m Loan Facility for Euronav

Watson, Farley & Williams (WFW) has advised ING Bank N.V. (ING) as sole bookrunner and facility agent for a syndicate of banks on a $340 million loan facility made available to Euronav NV.

Container Ships

Decade Old India Shipping Summit Makes History

In ten years, India Shipping Summit held consistently in Mumbai, has sailed on a robust growth course despite the worldwide witnessing recessionary waves buffeting any endeavors to grow and gain.

Liebherr to Deliver RTGs to Mayotte and Manila

Liebherr confirms orders for variable speed RTGs and electric RTGs. DPWorld Asian Terminals Inc. has placed an order with Liebherr Container Cranes for a further 5 RTGs at its Manila facility.

UASC Targets Expansion to Beat Container Market Blues

UASC expects to reach volume of 2.35 mln TEU in 2014 Global carriers still struggling with weak conditions United Arab Shipping Company (UASC) is on a major expansion drive,

Logistics

Crowley Transports Panama Canal Gate

Crowley Maritime Corp.’s heavy lift barge 455 4 successfully delivered the first in a series of new gates for the ongoing Panama Canal expansion. Crowley is

UN: Ship Inspections near Somalia for Arms, Charcoal

The United Nations Security Council authorized the inspection of boats suspected of carrying illegal shipments of charcoal or weapons to and from Somalia on Friday,

Singapore Bunker Meter Mandate Targets 'Frothy Fuel'

Singapore, the world's biggest bunkering port, plans to end the so-called "cappucino effect" in ship fuelling through new meters designed to stop suppliers from short-changing customers,

 
 
Maritime Security Maritime Standards Naval Architecture Navigation Offshore Oil Pipelines Pod Propulsion Salvage Shipbuilding / Vessel Construction Winch
rss | archive | history | articles | privacy | terms and conditions | contributors | top maritime news | about us | copyright | maritime magazines
maritime security news | shipbuilding news | maritime industry | shipping news | maritime reporting | workboats news | ship design | maritime business

Time taken: 0.6651 sec (2 req/sec)