Horizon Lines reported a loss of $1.6 million in its second quarter, which ended June 22, compared with a loss of about $900,000 in the second quarter of 2013. Earnings before interest, tax, however, was higher — $29.5 million in the second quarter, compared with $28.8 million in the same 2013 period.
The company had operating revenue of $281.2 million in the second quarter, compared with $259.8 million.
“An 8.3-percent improvement in operating revenue versus the second quarter of 2013 was generated largely by a 10.8-percent revenue container volume increase across our three markets,” said Steve Rubin, the company’s president and chief executive officer. “In addition, growth in non-transportation services revenue in our Alaska market resulted from a protracted seafood season. These favorable variances were partially offset by a 3.8-percent decrease in average revenue per container.”
The company noted that “the decline in our container rates was primarily due to a shift in cargo mix to include more automobiles and a change in overall market conditions.”
The company said it expects 2014 revenue container loads to be above 2013 levels, even though it faces increased competition both from National Shipping of America, which started a service between Houston and Puerto Rico in May 2013, and from Pasha, which is expected to put its new ship into the West Coast-Hawaii trade in the fourth quarter.
Horizon cautioned that it will “experience increases in expenses associated with our revenue container volumes, including our vessel payroll costs and benefits, stevedoring, port charges, wharfage, inland transportation costs, and rolling stock costs, among others. Although the number of vessels being dry-docked in 2014 is less than 2013, the costs associated with repositioning vessels and expenses related to spare vessels will slightly exceed 2013 levels. However, the majority of costs associated with repositioning vessels was incurred in the first half of 2014, whereas the costs were more evenly distributed throughout 2013.”
There have been media reports in recent that Horizon — which offers service between the U.S. mainland and Puerto Rico, Hawaii and Alaska — might sell one of its services, but the company did not address that subject in its earnings report.
Horizon reports loss, but revenues increase
