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Bermuda Container Line Releases Interim Report
"Bermuda Container Line's net earnings for the first six months of 2003 declined by $755,000 or 32% compared to the first half of 2002. This decrease was due to a combination of lower revenue and increased expenses. Revenue declined by $354,000 or 2.67% while expenses increased by $401,000 or 3.5%.
The lower revenue was a function of a decline in cargo volume, all in the Ro/Ro and breakbulk areas. Eastbound container volume for both the BCL and SISL services increased but this was more than offset by a decline in non-containerized cargo volume. This fall-off is directly related to fewer large building projects which create demand for the movement of structural steel and pre-fabricated concrete sections.
A number of expense categories were impacted because of increased prices but the most dramatic was in fuel costs. These were responsible for over $100,000 of the increase in total expenses.
For a number of years BCL has been able to hold the line and even reduce freight rates by controlling costs while expanding revenue through volume growth. Unfortunately this beneficial situation is coming to a close. The ocean carriers serving Bermuda face stevedoring rate increases in the second half of 2003 and little overall growth in cargo volume. If this trend continues freight rates will eventually have to be increased.
At this time your Company expects the second half of the year to be better than the first. Freight volume and revenue for the third quarter to the end of August are showing an increase over the same period in 2002."