€3m operating profit for port company

SHANNON Foynes Port Company (SFPC) has reported a record operating profit of over €3m from 2012, a year that saw tonnage throughput at the company’s ports reach levels not seen since 2008.

 

In its annual report, the company revealed that after financing costs and net disposal proceeds, it achieved a profit of approximately €2.025 million. Its record operating profit of €3.062m was a 6.6% increase on 2011.

The cargo throughput of 10.3 million tonnes was up by 1.8% on the previous year. While increases in cargo were primarily experienced at single user terminals, with an average increase of 2.8% year-on-year, the primary general cargo terminal at Foynes was buoyed by a very strong final quarter to 2012, when it recorded a 3.8% increase in tonnages.

Operating margins also increased, from 28.2% in 2011 to 30.2% in 2012, and were five times what they were in 2006.
The increase in profitability over 2011 was largely driven by enhanced efficiencies in the business, as reflected by the company’s increase in operating margin to 30.2% (28.2% in 2011). This arises from continued focus on both revenue maximisation and cost control, with operating and admin costs down by €300,000 to €7m.

SFPC chairman, Michael Collins said, “Operationally, it was another very successful year for Shannon Foynes Port Company, which maintained its position as Ireland’s largest bulk port company in terms of tonnage throughput in 2012. This is a very strong performance by the port company and we are well positioned for further growth.”

The main drivers underpinning 2012 tonnage performance at SFPC relate to the agricultural and energy sectors, with the harsh weather of 2012 impacting positively, with animal feed imports particularly strong during the fourth quarter of the year.
Likewise, the ongoing restructuring in the domestic fuels distribution market has also had significant positive impact, as did the importation by the National Oil Reserve Agency of strategic inventories to its recently commissioned 140,000 ton national strategic deep-water storage facility on Tarbert Island.

Company debt has reduced to €13.3m from its 2008 peak of €17.6m, notwithstanding the significant investment expenditure of €5.8m incurred from 2008 to date.
The company remains committed to investing in its infrastructure over the short, medium and long-term as demonstrated in its masterplan, Vision 2041, which was launched in February.

SFPC CEO Pat Keating said, “We are really pleased with another year of significant growth. The SFPC throughput has now returned to levels last seen in 2008, suggesting that there is more life in the economy than one is generally led to believe. We believe we are now resourced at a level sufficient to provide competitive efficient services to our customers.

“This is a very exciting stage for our company. We have achieved exponential growth over the past three years and SFPC is now well positioned to take advantage of an economic revival.

“We also have a clear roadmap for growth in our long-term strategy, Vision 2041, which is focussed on realising the enormous potential afforded by the natural deep-water advantage of the Shannon Estuary, something no other Irish port company has.”

However, Mr Keating stated that notwithstanding the strong bottom line profits at SFPC, the company is faced with substantial obligations in terms of pension liabilities, debt servicing requirements, its capital investment programme and more onerous requirement from its shareholder in the form of increased dividend payments.
“It is, therefore, essential that we maintain the upward trend in profitability reported in recent years in order to satisfy these obligations in the future,” he added.