Depressed Cargo Rates Hit Seaboard Revenue

Depressed Cargo Rates Hit Seaboard Revenue

Seaboard Marine containers

Decreased cargo rates and lower volume year-over-year drove revenue drops at Seaboard Marine in the third quarter of 2013, according to Seaboard Corp., the parent company.

Seaboard Corp. said its marine segment posted quarterly revenue of $219.5 million, down 9.4 percent compared with the same period in 2012. Furthermore, Seaboard Marine’s operating income decreased $28.0 million and $37.0 million for the three and nine month periods of 2013, respectively, reflecting increased trucking costs and terminal operating cost increases impacted by the decreased volume, particularly in Venezuela, according to the company.

“Management cannot predict changes in future cargo volumes and cargo rates or to what extent changes in economic conditions in markets served will affect net sales or operating income during the remainder of 2013,” Seaboard said in a written statement about the marine division. “However, based on recent market conditions, management anticipates this segment will not be profitable for the remainder of 2013.”

From January to September, Seaboard invested $20.7 million in its marine segment, primarily for purchases of cargo carrying and handling equipment, and plans to invest another $12.6 million for the same reasons during the remainder of 2013. Seaboard’s management also intends to evaluate whether to purchase more containerized cargo vessels for the segment during 2013.

Overall, Seaboard Corp. reported its net income in the third quarter of 2013 was $31.4 million, plummeting 58.0 percent year-over-year from $74.6 million, while revenue was $1.65 billion, up from $1.48 billion. The revenue gain was fueled by increases in the sugar, pork and commodity trading and milling divisions, partially offset by declines in the power, marine and other sectors.

In the first nine months of 2013, Seaboard Corp.’s profit dropped 37.4 percent to $129.1 million, from $206.3 million. Revenue rose 10.2 percent to $4.91 billion, from $4.46 billion, driven by gains in the pork, commodity trading and milling and power divisions, which were partially offset by drops in the marine, sugar and other sectors.