Thomas L. Gallagher | Jul 29, 2009 12:28PM EDT
Barge operator and manufacturer American Commercial Lines lost $3.8 million in the quarter ending June 30, compared with a net profit of $3.7 million in the second quarter of 2008. Revenue in the quarter fell 30.4 percent to $224.7 million.
Higher interest rates cost $4.3 million more this year than last, the company said. In July, the company refinanced its debt structure to bring the cost of debt down.
"Freight demand is down and our highest volumes are coming from our lowest margin commodities,” said Michael P. Ryan, president and CEO.
Higher margin metals and refined liquid petrochemical products markets remained weak in the second quarter. While the Company had strong volumes of grain and coal, grain rates are significantly lower than the prior year. The imbalance in available north and south bound freight continued to require more frequent repositioning of northbound empty vessels, the company said.
Manufacturing revenue from external customers in the second quarter fell $24.7 million or 25.8 percent below the prior-year quarter primarily because the company made only 19 dry hoppers compared with 93 in the prior year. The number of liquid tankers and special vessels changed only a little.
"Given the fluctuating demand and the overall reduction in our manufacturing backlog, in July, we reduced the shipyard headcount by approximately 10 percent,” Ryan said. “Subsequent to the end of the quarter, we added a new order for 20 dry cargo barges to our manufacturing backlog and have seen an increase in activity by potential barge purchasers for barge replacement given current relatively low steel prices and higher anticipated grain demand along the Inland Waterways."
Contact Thomas L. Gallagher at tgallagher@joc.com.