The parent of Irish Ferries, the shipping company that has been dogged by industrial relations troubles recently, yesterday reported a 20 per cent fall in pre-tax profits for 2003.
Its owner, Irish Continental Group (ICG), said turnover grew by 4 per cent to €304.3 million in 2003 from €293.6 million the previous year. However, a 9 per cent increase in costs to €280.2 million from €260.5 million ate into profits.
This included a once-off charge of €4.8 million to pay the expected cost of a redundancy programme that the company is negotiating with the unions. It announced that programme towards the end of last year.
Operating profits were slashed by almost 30 per cent to €24.1 million from €33.1 million in 2002. A reduced interest bill, to €6 million from €9 million, eased the impact of this on pre-tax profits, which came in at €17.7 million for 2003, a 13 per cent shortfall on the previous year's figure of €24.1 million.
Basic earnings per share (EPS) were down 9 per cent at 71.6 cent from 78.3 cent. Adjusted EPS, that is excluding the exceptional item, were 91.4 cent, up 8 per cent on the 2002 figure of 85 cent.
The board is not recommending the payment of a dividend for the year.
During the year, it bought back 5 per cent of its issued share capital at a cost of €9.8 million and a tranche of redeemable shares for a total of €1.8 million. The cost of both exercises was taken against its end-2003 reserves.
It reduced net debt by €32.4 million to €125 million during 2003.
Net cash inflow was down almost 20 per cent to €54.4 million from €68.5 million. The decrease was mainly attributable to the fall in operating profits.
Talks between management and the two unions representing ICG's 777 workers, SIPTU and the Seamen's Union of Ireland, on the company's proposal to lay off 52 employees are continuing at the Labour Relations Commission.
In a statement yesterday, outgoing chairman Mr Tom Toner warned that it was imperative that the company cut its costs in order to compete.
A note from Davy Stockbrokers analyst Mr Stephen Furlong echoed this warning.
Mr John McGuckian, the board's senior non-executive director, will succeed Mr Toner when he retires on April 30th, the date of the annual general meeting.
Mr Liam Booth will retire on the same day.
