Horizon Lines said it lost $20.1 million in the first quarter of its current fiscal year compared to $26.8 million in the same 2012 period.
Horizon, which operates container liner services between the U.S. mainland and Alaska, Hawaii, and Puerto Rico, said revenue for the quarter was $244.5 million compared to $263.4 million in the first quarter of last year.
Container volume for the 2013 first quarter totaled 51,321 revenue loads, down 10.1 percent from 57,086 loads for the same period a year ago. The decline was primarily a result of the reduced number of sailings between Jacksonville, Fla., and San Juan, Puerto Rico.
Unit revenue per container totaled $4,363 in the 2013 first quarter, compared with $4,257 a year ago. First-quarter unit revenue per container, net of fuel surcharges, was $3,286, up 1.9 percent from $3,225 a year ago.
Horizon says a revenue load includes any 20-foot, 40-foot, 45-foot or 48-foot container it moves with freight, rather than repositioning an empty. The majority of the containers that Horizon moves are 40-foot boxes.
Vessel fuel costs averaged $675 per metric ton in the first quarter, 2.8 percent below the average price of $693 per ton in the same quarter a year ago.
The company had adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) of $13.7 million, which Sam Woodward, president and chief executive officer, said was 25.7 higher than a year ago.
That improvement was “driven largely by improved fuel recovery, reduced dry-dock transit and crew-related expenses, lower vessel charter expense, continued execution of the Puerto Rico business-improvement plan, and reduced overhead,” he said “The positive factors resulting in adjusted EBITDA growth were partially offset by reduced container volume, higher stock-based compensation expense, mechanical issues on one of our vessels and increased vessel operating expenses.
“In recent months, we have taken steps to improve the competitiveness of our Puerto Rico service by reducing sailings between Jacksonville and San Juan to once a week and moving our northeast service to Philadelphia,” Woodward said. “The move to Philadelphia resulted in a $4.1 million charge in the first quarter, but, along with our other initiatives, should allow Horizon to strengthen the financial performance of our Puerto Rico trade lane.”
The company said it expects 2013 revenue container volume and rates to be slightly higher than 2012 levels, excluding the loss of revenue loads associated with the Puerto Rico service reduction.
It also said revenue container rate increases are necessary to mitigate contractual and inflationary increases in expenses, including the company’s vessel payroll costs and benefits, stevedoring, port charges, wharfage, inland transportation costs, and rolling stock costs, among others.
The company continues to expect that its 2013 vessel lease expense will be about $13.8 million lower than in 2012, due to the recent acquisition of its three Jones Act-qualified vessels that were not previously owned. The lower vessel lease expense will be partially offset by about $8.5 million of additional interest expense in 2013 in connection with debt incurred for the acquisition of those vessels.
Horizon said it continues to expect 2013 financial results will significantly exceed 2012 results, with 2013 adjusted EBITDA projected between $85 million and $97 million, compared with $66 million in 2012. - Chris Dupin