Horizon Lines said it is in discussions to sell its logistics unit and expects to report lower fourth quarter results next Thursday. The company said it expects “modest” growth this year in earnings before interest, tax, depreciation and amortization.
“The typically slow first quarter is expected to be exacerbated by the seasonality of the company’s new China service, which replaces a more consistent month-to-month earnings stream produced by its previous space charter agreement with Maersk,” the company said in a statement.
Horizon said it expects 2011 financial results “to improve in line with the economic recovery in its domestic trade lanes, the ramp-up of the new China business and the continued implementation of aggressive cost-reduction initiatives,”
Horizon, which announced it was pleading guilty to an antitrust charge for price-fixing in the Puerto Rico trade, said it expects to report adjusted EBITDA of approximately $96 million for 2010, down from $112.7 million in 2009. That would put fourth quarter EBITDA at $17.4 million, compared with $28.2 million a year earlier.
“The company’s fourth quarter results were adversely impacted by lower-than-projected volumes in its Hawaii trade lane, rising fuel prices, continued rate pressures, particularly in Puerto Rico, and the anticipated start-up costs related to the company’s new China service,” Horizon said.
Horizon said its 2010 results would include a charge of $30 million, which it said represents the present value of the $45 million fine the company will pay over five years for the antitrust violation.
The company offered no details about its decision to sell its logistics unit but said it was in discussions about a possible sale.