Weak euro chemical market blamed for 7% dip in revenues
Logistics firm InterBulk has reported a drop in revenues and profits for the 2012 financial year, largely from reduced activity in the European chemical sector.
InterBulk said the euro crisis and the weakness of the euro against other currencies has led to a seven per cent drop in revenues to £280 million for the year to September 30.
Pre-tax profits for the year dropped to £4.88 million against £5.38 million the previous year.
However, lower interest rates payable as a result of the group's 2011 demerger meant profits after tax for the year rose to £4.33 million against £3.87 million the previous year.
The demerger removed £21 million of what InterBulk described as “expensive mezzanine debt” and a new four-year refinancing package agreed in October is expected to bring interest savings of around £1.5 million a year.
InterBulk said it repaid £17.4 million of mezzanine debt in June 2011, which reduced its net financing expenses by £2.1 million in the 2012 financial year.
The East Kilbride-based group, which is part-owned by Clyde Blowers, reduced its net debt - including equipment finance - by more than £11 million to £72.5 million in the last financial year.
InterBulk said dry bulk continued to improve in the year though liquid bulk was “behind prior periods” with reduced transportation activity in most regions driven by the slow demand in the chemical sector.
David Rolph, InterBulk non-executive chairman, said: "After achieving two years of strong revenue growth, the weak external business environment, evident following the euro crisis has impacted activity levels in our main market, the European chemical sector.
“As a consequence, revenue declined this year by seven per cent to £280 million.
“Despite these industry-wide pressures, the impact on profit has been offset by the improvement in margins achieved by the strengthened management team in our dry bulk division and lower interest costs flowing from the deleverage achieved in 2011.
“These factors ensured the profit before tax remained consistent with the previous year at £5.2 million.”
InterBulk said it achieved a number of milestones in China during the year, which it notes is the largest and fastest growing chemical-producing and consuming country in the world.
A strategic alliance with Chinese shipping giant Sinotrans, which has a 35 per cent stake in InterBulk, will provide a “strong platform to service the development of both domestic and international business from China” InterBulk said.