SEACOR Reports First Quarter Loss
SEACOR Holdings Inc.’s reports on its first quarter results illustrate a recent trend in diversified companies that include barge components: a barge division that holds steady, partially offsetting weak demand or losses in other sectors.
The operating loss for the quarter ending March 31 was $0.1 million, compared with operating income of $19.0 million for the same quarter in 2019.
“I am quite pleased with our first quarter results,” said Charles Fabrikant, executive chairman. “The primary cause for the large swing in cash earnings relates to performing periodic heavy maintenance for some of our vessels and a fall-off in revenues related to Witt-O’Brien’s engagement in the U.S. Virgin Islands.”
The COVID-19 pandemic had a limited impact on its first quarter financial performance, the company said. Seacor’s diversified services “dampened, and, hopefully, will continue to mitigate for us the severe economic fallout of COVID-19 on the economy.”
Two of the company’s service lines that serve the Caribbean market, SEACOR Island Lines and Waterman Steamship, have experienced weaker demand. The Bahamas, like the U.S., has a “shelter in place” order in effect. In April, the U.S. military instituted a moratorium on cargo handling from vessels like the ones Seacor operates.
As a result of the passage of the CARES Act, the company said it can carry back net operating tax losses from 2019 to recoup $32 million of cash.
Sea-Vista, the company’s Jones Act tanker business, benefitted from charters that extend through the first quarter of 2021 and beyond. The company said its port and infrastructure services business and SEACOR Island Lines both experienced revenue growth year over year and made an increased contribution to operating income. Waterman Logistics benefited from steady cargo volumes and a full quarter of operations with no drydockings. “In the aggregate, these service lines had a positive incremental contribution of $4.8 million compared with the prior year quarter.”
SCF’s barges continue to move grain on the inland waterways and its terminals transfer agricultural and industrial essentials. The company’s Granite City, Ill.-based oil storage facility was fully utilized in the quarter.
The 4 percent year-over-year decline in U.S. grain exports through the Gulf of Mexico reduced demand for barge freight and activity levels at the company’s terminals on the Mississippi and Illinois rivers. The company blamed the trade war with China, U.S. farm subsidy programs that were a disincentive to exports, and competition from South America.
The company’s capital commitments as of March 31 were $61 million and included four U.S.-flag harbor tugs, the company’s interest in two foreign-flag rail ferries, six inland river dry-cargo barges, two inland river towboats, other equipment and vessel and terminal improvements.