Kirby’s first-quarter earnings were buoyed by strong fundamentals in its coastal tank barge fleet that fuelled near-full utilisation in a tight market.
The Houston tug and barge owner reported net income of $70.1m, a surge from $40.7m in the first three months of 2023.
“We are off to a solid start in 2024,” chief executive David Grzebinski said in an earnings statement.
“Both of our segments performed well during the quarter, delivering improved revenue and operating income, and our team executed well despite weather-related delays in the marine transportation segment and continuing supply chain delays in distribution and services.”
In the marine transportation segment, the company’s large fleet of inland barges suffered from high winds, ice delays on the Illinois River, fog on the US Gulf Coast and lock delays in the Mississippi River. But Grzebinski said demand was strong, utilisation was in the mid-90% region, and spot and term charter rates rose.
The coastal fleet had strong fundamentals and utilisation in the high 90% region.
“During the quarter, we saw solid customer demand and limited availability of large capacity vessels, which resulted in price increases on term contract renewals in the low 20% range and low 30% increases in spot market prices,” Grzebinski said.
“Our planned shipyard maintenance on several large vessels continues to wind down and we brought one large unit back into service in the quarter. Overall, first-quarter coastal revenues increased 20% year over year and operating margins were in the high single to low double-digit range.”
The result was $475m in revenue for the New York-listed company’s marine transportation fleet, up from $413m in the first quarter of 2023.
| Q1 2024 | Q1 2023 | |
| Marine transportation revenue | $475m | $413m |
| Total revenue | $808m | $750m |
| Total costs and expenses | $706m | $689m |
| Operating income | $102m | $61.5m |
| Net earnings attributable to Kirby shareholders | $70.1m | $40.7m |
| Diluted earnings per share | $1.19 | $0.68 |
Operating income rose to $83m from $43m.
By contrast, Kirby’s distribution & services business had operating income of $22m in operating income on $333m in revenue in the first quarter, down from $22.8m in operating income on $338m in revenue a year earlier.
“We are off to a solid start in 2024 and have a favourable outlook for the remainder of the year. Our balance sheet is strong, and we expect to generate significant free cash flow despite high levels of capex this year and expect to use the majority of free cash flow for share repurchases,” Grzebinski said.
“We see favourable markets continuing and expect our businesses will produce improving financial results as we move through this year.”
Also on Thursday, Kirby announced that Christian O’Neil is its new president and chief operating officer, starting on Friday.
He has been president of the marine transportation business since 2018.
The chief operating officer seat had been vacant. O’Neil will take the president’s hat from Grzebinski, who previously had been COO until he became chief executive in 2014.
Kirby Corp operates a fleet of 1,078 inland tank barges, 28 coastal tank barges and four offshore dry-cargo barges.
