Kirby climbed out of the red in the fourth quarter with the Houston oil services firm pitching a further recovery in 2022.
The New York-listed company posted a $16.7m adjusted profit for the fourth quarter of 2021, good for $0.27 per share, with the lift coming from its marine transportation segment which saw utilisation and revenues jump despite bad weather.
“Our inland business experienced improved market fundamentals due to strong refinery and petrochemical plant utilisation and increased customer volumes,” chief executive David Grzebinski said.
“Favourable market dynamics also led to increased sequential and year-on-year spot market pricing, as well as higher rates on term contract renewals for the first time since the start of the pandemic.
“In coastal marine, market conditions were stable in the fourth quarter.”
Kirby said utilisation for its inland vessels jumped into the mid to high 80% range in the fourth quarter, up from the high 60% range in the fourth quarter of 2020 and the low 80% range in the third quarter of 2021.
Term contracts for those ships increased 10% year-over-year and revenues jumped 20%, pushing revenues for the entire segment up to $351m from $299m.
The growth came despite Hurricane Ida creating adverse wind conditions on the US Gulf Coast and Covid-19 crewing challenges adding costs equivalent to $0.01 to $0.02 per share.
Market conditions for its coastal vessels held steady sequentially with spot and term contract pricing stable, Kirby said.
Grzebinski said the overall improvements in Kirby’s fourth-quarter performance were dragged down in part by a seasonal reduction in earnings for its distribution and services segment.
Heading into 2022, he said the company sees continued improvements for both inland barges and in the oil and gas markets, prompting increased capital spending.
“Although there are still some uncertainties surrounding the Covid-19 omicron variant which are currently impacting our operations, we see strong momentum building and expect all of our businesses to deliver significantly improved financial results in 2022,” Grzebinski said.
Barge utilisation is expected to top out in the low 90% range, with improvements to the spot market leading to revenue growth from 10% to 15%.
Coastal marine business is forecast to "modestly improve" in 2022 as both refined products and crude oil volumes grow, though pricing is expected to remain challenged with plenty of tonnage available.
Kirby shares were up in early trading on Wednesday, jumping $3.64 to $65.67.
