Mobile, Ala., based ship operator International Shipholding Corporation (NYSE: ISH) has announced financial results for the quarter and year ended December 31, 201.
Fourth quarter net income was $1.8 million $8.9 million for equivalent 2010 period. The 2011 quarterly results included a loss of $967,000 on the sale of an investment in a warehouse previously used by the Rail Ferry Service, while the 2010 quarterly results included a one-time reversal of an income tax provision of $3.9 million.
For the full year of 2011, net income was $31.5 million compared to $15.3 million for 2010. In addition to the non-recurring charges, full year 2011 results included a non-monetary gain of $18.8 million associated with the purchase of the remaining 50% interest in Drybulk Capeholding, Inc. ("Dry Bulk"), while 2010 results included an impairment charge of $25.4 million on the Rail Ferry Service.
Mr. Niels M. Johnsen, Chairman and Chief Executive Officer, stated, "In 2011 we continued our strategy of operating a majority of our fleet on medium to long-term charters, enabling us to generate significant revenue during a challenging time for the shipping industry. During the year we acquired a 2000-built multi-purpose ice strengthened vessel to service a recently awarded MSC contract. We also completed transactions to increase the ownership interest of our fleet by acquiring 100% interests in two pure car truck carriers, one Capesize vessel and one newbuilding Handymax vessel. In addition, we strengthened our potential earnings power during the year with the delivery of three Handysize Bulk Carriers and five Mini Bulkers.
The Company's Gross Voyage Profit, which represents the operating results of its five reporting segments, was $10.3 million for the fourth quarter of 2011 compared to $10.4 million in the 2010 three month period. While total results were comparable, individual segment results varied.
The U.S. Flag Time Charter Gross Voyage Profit was approximately $3.5 million lower in the 2011 fourth quarter in comparison to the 2010 fourth quarter results. This was primarily driven by reduced supplemental cargo volumes and higher operating cost on the company's Pure Car Truck Carriers ("PCTC").
The International Flag Time Charter segment reported improved results from Dry Bulk operations partially offset by a drop in the Indonesian contract rates. The vompany's Contract of Affreightment and Rail Ferry segments reported improved results due to increased tonnage carried during the quarter. The Other segment, which consists of supporting ancillary services, improved slightly in the fourth quarter of 2011 as compared to the fourth quarter of 2010. Administrative and general expenses during the fourth quarter of 2011 were at comparable 2010 levels.
Interest and Other Expense
Interest expense for the three months ended December 31 2011, increased from the comparable period in 2010, primarily as a result of the purchase of the two previously leased PCTC vessels and the additional debt associated with the purchase of three Handysize Bulk Carriers which began operating in first quarter, 2011. In addition, the company had a loss on the sale of its interest in a partnership which owned warehouse space previously used to support the Rail Ferry operations when that service operated in New Orleans. Due to the stabilization of the Japanese Yen, the company reported a small foreign exchange gain in fourth quarter of 2011 as compared to the same period in 2010, which reported a loss of $1.7 million on the strengthening of Yen during that period.
February 2, 2011