America’s largest tank barge operator, Houston-headquartered Kirby Corporation (NYSE: KEX) today reported results for the second quarter ended June 30, 2021 that included net earnings of $10.2 million, or $0.17 per share, compared with earnings of $25.0 million or $0.42 per share for the 2020 second quarter. Consolidated revenues for the 2021 second quarter were $559.6 million compared with $541.2 million reported for the 2020 second quarter.
President and CEO David Grzebinski said the results “reflected improved market dynamics and increased demand across most of the company’s end markets.”
“In marine transportation,” he said, “our inland business experienced a strong improvement in demand which resulted in second quarter average barge utilization increasing into the low to mid-80% range. This increase was primarily driven by improved economic conditions, higher refinery and chemical plant utilization, and increased demand for refined products and black oil. The Colonial Pipeline outage also provided significant temporary increases in barge demand during the second half of May. These favorable market dynamics helped to sequentially improve spot market pricing for the first time in over a year. Overall, inland revenues increased 13% sequentially and operating margins improved into the high single digits for the second quarter.”
Kirby’s marine transportation revenues for the 2021 second quarter were $332.9 million compared with $381.0 million for the 2020 second quarter. Operating income for the 2021 second quarter was $18.5 million compared with $51.4 million for the 2020 second quarter. Operating margin for the 2021 second quarter was 5.6% compared with 13.5% for the 2020 second quarter.
In the inland market, average barge utilization was in the low to mid-80% range during the quarter compared to the mid-70% range in the 2021 first quarter and the mid-80% range in the 2020 second quarter.
Operating conditions were fair with improved weather conditions and reduced flooding acrOss the waterway network. However, significant lock closures along the Gulf Intracoastal Waterway contributed to a 4% increase in delay days year-on-year.
As a result of increased barge utilization, average spot market rates improved approximately 10% sequentially. However, when compared to the 2020 second quarter, spot market rates were down approximately 10 to 15%. Term contract pricing on the few expiring contracts that renewed in the second quarter declined in the mid-to high single digits on average compared to a year ago. Revenues in the inland market declined 16% compared to the 2020 second quarter due to the impact of lower pricing and barge utilization, partially offset by increased fuel rebills. Compared to the 2021 first quarter, revenues increased 13% due to higher barge utilization and improved spot market pricing.
During the 2021 second quarter, the inland market represented 76% of segment revenues and had an operating margin in the high single digits. While inland operating margins improved sequentially, when compared to the year ago quarter, they were lower due to reduced barge utilization and pricing.
In the coastal market, weak demand for refined products and black oil transportation contributed to low spot market activity and barge utilization in the low to mid-70% range. Pricing on spot and term contracts was generally stable during the quarter. Revenues in the coastal market were modestly higher compared to the 2020 second quarter and represented 24% of segment revenues. The coastal business had a negative operating margin in the mid-single digits during the quarter.