Kirby Corporation (NYSE:KEX) announced yesterday the signing of agreements to construct 29 additional 30,000 bbl. inland tank barges with a total capacity of 830,000 bbls. for delivery throughout 2014. Of the 29 inland tank barges, 18 are through the assumption of shipyard construction contracts from another inland tank barge operator and 11 are new orders placed by Kirby. Based on current commitments, steel prices and projected delivery schedules, the cost of the 29 inland tank barges is approximately $81 million. Trinity Marine Products will be building the barges.
The construction of the 29 inland tank barges are in addition to the previously announced construction during 2014 of 37 inland tank barges with a total capacity of 390,000 bbls. at a cost of approximately $45 million, as well as approximately $45 million in progress payments on the construction of the 185,000 bbl. coastal articulated tank barge and tugboat unit announced in January 2014 for delivery in mid to late 2015.
“The 29 additional 30,000 barrel inland tank barges which are expected to be delivered this year will help to meet the additional volume requirements driven by strong and expanding movements of crude oil and natural gas condensate, as well as new demand from expansions in the petrochemical and refining industries," said Kirby's Chairman and CEO Joe Pyne.
“Our first quarter guidance included some negative impact on our marine operations from the unfavorable winter weather we experienced during the month of January," Pyne said in regard to the 2014 first quarter guidance of $1.05 to $1.15 per share issued in late January. "Since early January, temperatures have primarily remained below freezing causing heavy ice on the Illinois, upper Mississippi and upper Ohio Rivers. We have continued to operate on these rivers despite the heavy ice conditions, but with additional horsepower or reduced tow sizes. We are not yet able to quantify the effect of the weather conditions on first quarter earnings, and we have also incurred a $.03 per share severance charge in the quarter, but we still expect earnings will be within the published guidance.”