MAY 1, 2014 — Houston-headquartered Kirby Corporation (NYSE:KEX) has exercised its option for a second 185,000 barrel ATB and is poised to order two more. David Grzebinski, who was elected as Kirby’s President and Chief Executive Officer April 29 in line with the company’s succession plan, gave the news yesterday as Kirby announced record first quarter earnings.
“As a result of consistently strong coastal tank barge demand, utilization and increasing pricing,” said Mr. Grzebinski,”yesterday we exercised our option for the construction of a second 185,000 barrel coastal articulated tank barge and 10,000 horsepower tugboat unit (“ATB”) for approximately $75 million, with expected delivery in the first half of 2016. Including progress payments for this unit and previously announced increases in our inland construction program, we now expect our 2014 capital spending to be in the $320 to $330 million range.
“Also, yesterday our Board of Directors approved the construction of two additional ATB’s and we will update our capital spending guidance once we have construction contracts signed.”
Kirby’s new 2014 capital spending guidance range of $320 to $330 million includes approximately $135 million for the construction of 66 inland tank barges and one inland towboat, and approximately $80 million in progress payments on the construction of the two 185,000 barrel ATB’s. The balance of $105 to $115 million is primarily capital upgrades and improvements to existing inland and coastal marine equipment and facilities, and diesel engine services facilities.
Kirby ordered its first of what now will be four ATBs in January, with the 578 ft barge unit being ordered at Gunderson Marine in Portland, OR, and the 10,000 bhp tugboat unit being ordered at Nichols Brothers Boat Builders, Freeland, WA.