Steady Sailing for Horizon Lines
U.S. domestic ocean carrier Horizon Lines’ third-quarter adjusted EBITDA increased 12.6% from the same period a year ago, according to Steve Rubin, Horizon Lines President and Chief Executive Officer.
This was primarily driven by lower claims-related expense, higher volume, and lower fuel and labor costs associated with vessel dry-docking, Rubin said.
“The positive factors driving adjusted EBITDA growth were partially offset by lower container rates and contractual labor and other expense increases.
A USD 12.5 million or 4.6% improvement in operating revenue versus the third quarter of 2013 was generated largely by an 8.9% revenue container volume increase.
In addition, we experienced growth in non-transportation services revenue in our Hawaii and Alaska markets. These favorable variances were partially offset by a 5.1% decrease in average revenue per container.
The decline in our container rates was primarily due to a shift in cargo mix mainly to include more automobiles and increased competition in our markets,” Rubin added.
In terms of the market outlook Horizon Lines expects 2014 revenue container loads to be above 2013 levels.
This projected volume growth takes into consideration the estimated impact of all deployment changes in the Puerto Rico markets.
“Overall, container rates are expected to be below 2013 levels due to competitive market conditions and an increase in automobile volume, which generally has lower container rates.”
The expected 2014 financial results should approximate 2013 results, with 2014 adjusted EBITDA projected between USD 90.0 million and USD 95.0 million, compared with USD 95.2 million in fiscal 2013, the company said.