Kirby Corp. announced today that fourth-quarter net earnings rose compared to a year ago, while revenues were down.
For the quarter ending Dec. 31, the Houston-based barge operator reported $22.2 million in earnings or 37 cents per share, compared with $2.8 million or 5 cents per share for the 2019 fourth quarter. Excluding one-time charges in the 2019 fourth quarter, net earnings were $34.5 million or 58 cents per share. Consolidated revenues for the 2020 fourth quarter were $489.8 million compared with $655.9 million in the 2019 fourth quarter.
For the 2020 full year, Kirby reported a net loss of $272.5 million or $4.55 per share, compared with net earnings of $142.3 million or $2.37 per share for 2019. Excluding one-time items in both years, 2020 net earnings were $110 million or $1.84 per share, compared with $174 million or $2.90 per share for 2019. Consolidated revenues for 2020 were $2.17 billion compared with $2.84 billion for 2019.
“During the fourth quarter, the impact of the pandemic on the economy continued to constrain demand in Kirby’s businesses. Although overall demand modestly increased in some areas of distribution and services, there was no improvement in inland and coastal barge utilization in the quarter," David Grzebinski, Kirby’s president and CEO, said in a statement. “In marine transportation, our inland and coastal businesses faced continued market weakness and low demand for liquid cargoes including refined products, crude, and black oil. With hurricanes impacting the Gulf Coast in October and a second wave of Covid-19 cases escalating during the quarter, average refinery utilization only began to improve in mid-November and remained well below historical norms for the fourth quarter. These challenging market conditions contributed to continued low barge utilization throughout the quarter, limited spot market activity, and increased pricing pressure."
Marine transportation revenues for the 2020 fourth quarter were $299.4 million compared with $402 million for the 2019 fourth quarter. Operating income for the 2020 fourth quarter was $29.2 million compared with $54.5 million for the 2019 fourth quarter. Segment operating margin for the 2020 fourth quarter was 9.7% compared with 13.6% for the 2019 fourth quarter.
In the inland market, average barge utilization was in the high 60% range during the 2020 fourth quarter, compared to the low 90% range in the 2019 fourth quarter.
Barge volumes were heavily impacted by lower refinery and chemical plant utilization and reduced demand for refined products and petrochemicals, Kirby said.
“Although Kirby’s businesses continue to be challenged by the Covid-19 pandemic and the associated unprecedented declines in demand, we believe that improved business activity and utilization levels will occur in the second half of the year," Grzebinski said. "With the vaccine distribution now underway, it is likely that material improvements in economic activity and increased energy consumption are ahead. We do believe, however, the first half of the year will likely remain challenging until the pandemic eases and refinery utilization materially recovers. In the first quarter, we expect weak market conditions in marine transportation to continue with further pricing pressure on contract renewals. As well, surging cases of Covid-19 across the U.S. have impacted our ability to crew our vessels, resulting in delays and in some cases lost revenue. As a result, we anticipate a sequential reduction in earnings during the first quarter with improving results thereafter as the effects of the pandemic moderate and demand for our products and services steadily increases.”
Grzebinski concluded, “Undoubtedly, 2020 will be remembered as an extremely challenging year. Kirby faced unprecedented reductions in demand across the company, a record setting hurricane season, and the need to protect the health and safety of our employees and customers. Throughout 2020, we safely crewed our vessels, kept our branches and facilities operating, ensured reliable and consistent customer service, and successfully integrated newly acquired companies and assets. Although our overall financial performance materially declined year-on-year, I’m pleased with our efforts to reduce costs, control capital expenditures, and focus on cash flow. With these actions, Kirby enters 2021 in a strong financial position. The new year brings continued uncertainty with respect to the timing of a material recovery and likely further reductions in earnings during the first quarter. Regardless, we believe better days are ahead with improved demand and activity levels for all of Kirby’s businesses as 2021 progresses and the impacts from the pandemic moderate.”