LONDON (ShareCast) - (Sharecast News) - Irish Continental Group updated the market on its trading for the first 10 months of the year on Wednesday, reporting consolidated group revenue of €308.8m (£264.37m), which was an increase of €23.5m, or 8.2%, compared with last year.
The London-listed ferry operator said that while the increases were achieved across all of its revenue streams for the 10-month period to 31 October, a significant proportion of the improvement arose in the ferries division from what it called "improved schedule integrity" following disruptions last year.

For the year-to-date, it said group fuel costs were marginally higher over the previous year, with lower dollar costs offset by stronger dollar exchange rates and increased consumption attributable to higher overall fleet capacity and schedule changes.

Net debt at the end of October was €118.8m, which included right-of-use obligations recognised following the adoption of IFRS 16.

During the period, the group returned more than €26m to shareholders and invested over €25m in expanding and improving its fleet.

Those fleet investments included the acquisition of a fifth container vessel, a deposit on a further container vessel and initial investment in exhaust scrubber systems in preparation for new fuel regulations.

The new fuel regulations, IMO 2020, are mandated by the International Maritime Organisation and apply worldwide from 1 January.

Under the regulations, the sulphur content of fuel oils will be limited to 0.5%, which Irish Continental said is a higher-priced fuel than existing heavy fuel oil.

The group said it was engaging with its customers in order to ensure that the increased fuel and investment costs which it would incur were passed through the logistical chain.

"There is continuing uncertainty over the timing and manner of the proposed exit of the United Kingdom from the European Union," the board said in its statement.

"During the period the group experienced some volatility in carryings as key Brexit dates were approached and subsequently postponed.

"The overall effect of this continuing uncertainty is generating negative impact on consumer sentiment and trade flows as investment decisions are delayed."

In the ferries division, total revenues recorded in the period to 31 October amounted to €184.3m, including intra-division charter income, which was a €12.2m, or 7.1%, increase on the prior year.

That increase was driven by schedule changes, additional cruise ferry capacity following the entry into service of the W.B. Yeats in January replacing the previous Oscar Wilde, and improved schedule integrity following the significant disruptions in the second half of 2018.

For the year to 23 November, Irish Ferries carried 370,700 cars, which was an increase of 1.6% on the previous year.

Those volumes were achieved against the decision to suspend sailings on the tourism-oriented fastcraft during the low tourism winter season.

Overall tourism revenues increased in line with volumes in a competitive marketplace, and carryings in the period since 30 June were up by 7.9%.

Freight carryings for the year to 23 November were 283,000 roll-on, roll-off (RoRo) units, which was an uplift of 10.5% compared with 2019.

That performance reflected the improved schedule integrity on the company's cruise ferry services following disruptions during the second half of last year, with carryings in the period since 30 June increasing by 14.4%.

"The cruise ferry Oscar Wilde was sold in April following entry into service of our newly constructed cruise ferry W.B. Yeats in January," the board said.

"The agreed consideration of €28.9m, which generated a profit after tax of €14.9m, is receivable in instalments over 72 months.

"The container vessel fleet has been increased to six vessels with the acquisition of the Thetis D in April and the CT Rotterdam in November."

Irish Continental also noted that it entered into an agreement in 2018 for the construction of a second cruise ferry, with a contracted delivery of late 2020.

"It is intended that this vessel will service the Dublin-Holyhead route alongside the existing Ulysses with the chartered Epsilon being returned to its owners."

In the container and terminal division, total revenues recorded in the period to 31 October amounted to €131m, which was a 9.1% increase on the prior year.

For the year to 23 November, container freight volumes shipped were 316,000 20-foot equivalent units (teu), which was a 5.7% improvement on the previous year, with the rate of growth standing at 4.0% in the period since 30 June.

Units handled at the company's terminals in Dublin and Belfast increased 4.1% year-on-year to 293,900 lifts, and in the period since 30 June, terminal throughput rose 2.6%.

"The group continues to invest in new technologies and capacity at its Dublin terminal," the board explained.

"The group has also agreed an extension to the port operating concession agreement at Belfast Port to 2026 where significant investment is being undertaken by the port owner Belfast Harbour Commissioners."

At 0912 GMT, shares in Irish Continental were up 4.51% in London at €4.52.

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