[ID] => 10581
[post_author] => 34
[post_date] => 2019-02-06 16:02:45
[post_date_gmt] => 2019-02-06 16:02:45
[post_content] => Kirby Corp has signed an agreement to acquire Cenac Marine Services’ tank barge fleet, which consists of 63 inland tank barges and 36 tow- and tugboats, for some $244m cash.. Cenac moves petrochemicals, refined products and black oil, including crude oil, residual fuels, feedstocks and lubricants, on the lower Mississippi River, its tributaries, and Gulf Intracoastal Waterway for major oil companies and refineries. The closing of the acquisition is expected to occur late in the first quarter of 2019, subject to the usual conditions. The acquisition is to be financed through additional borrowings.
“The acquisition of Cenac’s young fleet of well-maintained inland tank barges and modern boats is an ideal complement to Kirby’s operations,” says David Grzebinski, Kirby’s president and CEO. “Cenac has a strong history of operational excellence, and is well respected by the industry and its customers. Cenac’s inland fleet of 30,000-barrel tank barges, of which approximately 80 per cent are clean and 20 per cent are heated black oil vessels, has an average age of only four years. Similarly, Cenac’s fleet of modern inland towboats and offshore tugboats has an average age of only six years.
“The addition of these vessels to Kirby’s fleet will not only further reduce our average age profile, but will also further enable us to avoid significant capital outlays for new vessels in the future,” Grzebinski adds.
Announcement of the Cenac deal came as Kirby reported its financial results for 2018. Net earnings fell from $313.2m in 2017 to $78.5m, largely due to higher interest costs following earlier investments and a return to a negative tax position after 2017’s one-off relief. In operational terms, Kirby reports strong demand and high utilisation levels, with rising freight rates.
“In inland marine transportation, we continued to experience strong demand and high barge utilisation levels,” Grzebinski says. “These favourable market conditions resulted in further pricing increases with spot market rates sequentially improving in the mid-to high single digit range. During the fourth quarter, we experienced a 28 per cent increase in delay days as a result of seasonal weather patterns along the Gulf Coast and lock delays which reduced operating efficiencies. Despite those challenges, inland marine delivered a slight increase in sequential revenue with operating margins similar to the third quarter.”
“In coastal transportation, we continued to witness tightening market conditions and modest pricing improvement, particularly on large capacity vessels in the Atlantic region. As expected, however, our financial results in the quarter were negatively impacted by planned major shipyard maintenance on several large capacity vessels,” Grzebinski continues.
“Additionally, during the quarter we impaired four older articulated tank barge units (ATBs) and one leased barge that require mandatory ballast water treatment systems under new regulations. Investing to meet this requirement in these aging barges would be financially unattractive. We expect that we will early retire these ATBs at their next shipyard dates which range between 2020 and 2023.”
Favourable market dynamics are expected to continue in 2019, with new petrochemical and pipeline capacity coming onstream and bringing additional volumes to the Gulf Coast. “These factors are expected to result in [inland] barge utilisation rates in the low to mid-90 per cent range during the year,” Kirby says. “Together with a full year of contribution from 2018 acquisitions, including Higman, Targa’s pressure barge business and CGBM’s tank barges, as well as Cenac, inland revenues are expected to increase in the low to mid-double digits year-on-year with quarterly operating margins ranging in the mid-to-high teens.”
[post_title] => Kirby: Gather the fleet
[post_status] => publish
[comment_status] => open
[ping_status] => open
[post_name] => kirby-gather-fleet
[post_modified] => 2019-02-06 16:02:45
[post_modified_gmt] => 2019-02-06 16:02:45
[post_parent] => 0
[guid] => https://www.hcblive.com/?p=10581
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Kirby Corp, buoyed by another year of strong demand, is expanding and renewing its fleet through another acquisition