“Undoubtedly, 2020 will be remembered as an extremely challenging year,” said David Grzebinski, president and CEO of America’s largest tank barge operator, Houston-headquartered Kirby Corporation (NYSE: KEX), as the company today reported 2020 fourth quarter and full year results.
Net earnings for the quarter ended December 31, 2020, were $22.2 million or $0.37 per share, compared with $2.8 million or $0.05 per share for the 2019 fourth quarter. Excluding one-time charges net earnings were $34.5 million or $0.58 per share. Consolidated revenues for the 2020 fourth quarter were $489.8 million compared with $655.9 million reported for the 2019 fourth quarter.
For the 2020 full year, Kirby reported a net loss of $272.5 million or $4.5 per share, compared with net earnings of $142.3 million or $2.37 per share for 2019. Excluding one-time items in both years, 2020 net earningswere $110.0 million or $1.84 per share, compared with $174.0 million or $2.90 per share for 2019. Consolidated revenues for 2020 were $2.17 billion compared with $2.84 billion for 2019.
“During the fourth quarter, the impact of the pandemic on the economy continued to constrain demand in Kirby’s businesses,” said Grzebinski. “Although overall demand modestly increased in some areas of distribution and services, there was no improvement in inland and coastal barge utilization in the quarter.”
“In marine transportation,” he said, “our inland and coastal businesses faced continued market weakness and low demand for liquid cargoes including refined products, crude, and black oil. With hurricanes impacting the Gulf Coast in October and a second wave of COVID-19 cases escalating during the quarter, average refinery utilization only began to improve in mid-November and remained well below historical norms for the fourth quarter. These challenging market conditions contributed to continued low barge utilization throughout the quarter, limited spot market activity, and increased pricing pressure.
In his comments on the 2021 full year outlook, Grzebinski said “the first half of the year will likely remain challenging until the pandemic eases and refinery utilization materially recovers. In the first quarter, we expect weak market conditions in marine transportation to continue with further pricing pressure on contract renewals. As well, surging cases of COVID-19 across the U.S. have impacted our ability to crew our vessels, resulting in delays and in some cases lost revenue.”
In inland marine, Grzebinski said that barge utilization is projected to start the year in the low to mid-70% range and improve into the high 80% to low 90% range by the end of the year.
In coastal, COVID-19 and the associated impact on market conditions are expected to have a meaningful impact on 2021 results.
“With current headwinds including limited spot demand, the return of some chartered equipment, lower term contract pricing, and crewing difficulties due to COVID-19, coastal’s financial results are expected to be lower in 2021,” said Grzebinski. “As well, the retirement of three older large capacity coastal vessels during the second and third quarters of 2020, and the retirement of an additional vessel in mid-2021, will have a negative impact on full year results when compared to 2020.”
CAPITAL SPENDING INCLUDES NEW TOWBOATS
Kirby expects 2021 capital spending to range between $125 to $145 million, with the midpoint representing a year-on-year reduction near 10%. Approximately $15 million is associated with the construction of new inland towboats, and approximately $95 to $110 million is associated with capital upgrades and improvements to existing inland and coastal marine equipment and facility improvements.