Kirby reports profitable first quarter

Written by Marine Log Staff

Houston-headquartered Kirby Corporation (NYSE: KEX) today announced results for the first quarter ended March 31, 2022, Earnings in the quarter were $17.4 million or $0.29 per share, compared with a loss of $3.4 million, or $0.06 per share for the 2021 first quarter. Consolidated revenues were $610.8 million compared with $496.9 million in the 2021 first quarter.

“Kirby’s businesses continued to gain momentum with improved market conditions and increased demand, delivering sequential and year-on-year revenue and earnings growth,” said president and CEO David Grzebinski. “These tailwinds were somewhat offset by the impact of the COVID-19 Omicron variant, which we estimate reduced marine transportation earnings by approximately $0.10 per share during the first quarter. Although we continue to navigate supply chain constraints, distribution and services performed well. Our outlook for 2022 remains favorable, and we expect meaningful quarterly earnings progression for the remainder of the year.”

Commenting on last month’s news that Maersk Supply Service had selected Kirby to provide barge feedering services for its newbuild wind turbine installation vessel on the Empire Wind project, Grzebinski said: “At the end of the quarter, we announced a new business, Kirby Offshore Wind, and its award to provide barge transportation services for offshore wind towers and turbines to Maersk Supply Service for the Empire Wind project in New York. The 20-year framework agreement with Maersk, which will commence in late 2025 or early 2026, will provide significant revenue and earnings growth potential for our offshore business and greatly enhance our ESG product and services offering in the future.”

Commenting on the 2022 full year outlook, Grzebinski said, “Although first quarter results were materially impacted by the Omicron variant in marine transportation, we exited the quarter in a solid position. Refinery utilization is back to pre-pandemic levels, our barge utilization is strong in both inland and coastal, and rates are increasing. In distribution and services, despite supply chain constraints, demand for our products and services is growing, and we continue to receive new orders in manufacturing. Overall, we see momentum continuing to build, and we expect our businesses to deliver improved financial results in the coming quarters. While all of this is encouraging, we are mindful that ongoing challenges related to COVID-19, high commodity prices impacting demand, and additional economic headwinds are possible. Labor constraints and inflationary pressures are also contributing to rapidly rising costs across our businesses. In marine, we currently expect that cost escalators and rate recovery mechanisms in some term contracts will lag these cost headwinds in the second quarter. With these uncertainties in mind, we will continue to focus on costs and drive strong cash flow from operations. In the near-term, we intend to use this cash flow to reduce debt and further strengthen our balance sheet, but we will also continue to evaluate accretive acquisitions and high-return organic growth opportunities to create long-term shareholder value. As always, we will continue to take a disciplined approach to capital allocation and regularly evaluate our capital allocation program to ensure we have the right levels of capital to fund our projects, strengthen our financial position, and enhance value over the long-term.”

“In inland marine, favorable market conditions have contributed to Kirby’s barge utilization being at or modestly above 90% since mid-March,” said Grzebinksi. “This improvement is expected to continue going forward, driven by high refinery and petrochemical plant utilization, increased volumes from new petrochemical plants, and minimal new barge construction across the industry. As a result, the Company expects continued improvements in the spot market, which currently represents approximately 35% of inland revenues. Term contracts are also expected to continue to reset higher to reflect improved market conditions for the duration of the year. Increases in fuel costs are expected to contribute to increased rebill revenue with no margin. Overall, inland revenues are expected to grow by 15% to 20% year-on-year with steady increases throughout the year as market conditions tighten further and contracts renew higher. Material inflation to costs, including significantly rising fuel prices, are expected to be headwinds but will be largely mitigated when escalations in contracts occur during the second half of the year. Barring cost inflation and rising fuel costs as well as the timing of contract escalations and fuel rebills, we expect near term operating margins to be in the low double digits and gradually improve as the year progresses.

“In coastal marine, Kirby expects modestly improved customer demand through the balance of the year with company barge utilization in the 90% range. Rates are also expected to slowly improve, but meaningful gains will be challenged by underutilized barge capacity across the industry. For the full year, with the impact of the company’s exit from the Hawaii market and reductions in coal shipments, coastal revenues are expected to be down in the low single digits compared to 2021. Beginning in the second quarter, revenues and operating margins are expected to be impacted by planned shipyard maintenance and ballast water treatment installations on certain vessels. Consequently, coastal operating margins for the remainder of the year are expected to be a slight loss in the low single digits and approach breakeven as the year progresses.”


Kirby says it expects 2022 capital spending to range between $170 to $190 million. Approximately $5 million is associated with the construction of new inland towboats, and approximately $145 to $155 million is associated with marine maintenance capital and improvements to existing inland and coastal marine equipment and facility improvements. The balance of approximately $20 to $30 million largely relates to new machinery and equipment and facility improvements in distribution and services, as well as information technology projects in corporate.


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