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The article copied below appeared in TradeWinds, the shipping industry publication. The weekly paper and its associated web site provide regular coverage of developments concerning Crowley Maritime and other water transportation companies. |
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Feisty Crowley goes after insurers Asbestos claims have erased earnings at Crowley Maritime for the first half of 2004.
By Bob Rust, Oslo The company says it will push its insurors hard to get back the $6.3m it paid in May to settle a batch of asbestos illness claims by former seamen. More claims are on the way. Meanwhile, the company is signalling that it has liquidity and financing in place for possible acquisitions in the near term.
Oakland, California-based Crowley reports in its interim results filing that it lost a net $4.1m in the first six months of this year on operating revenues of $482.3m. The revenue figure was up just 5% from $460.3m in the first half of last year, when Crowley lost $2.27m. Revenues would have grown more but for vessel disposals and drydockings, the company says. Operating income shrank to $4.8m in the first half of this year from $7m in the first half of 2003. The company states the net loss attributable to holders of common stock as $4.9m, which is 63% worse than the $3m common shareholders lost last year. The second quarter was in the black. Comparing the second-quarter figures for this year and last, Crowley reports a thin positive result of $0.7m now on revenues of $255.6m, down from $2.3m in 2003 on revenues of $240.3m. Operating profits were $5.2m in the quarter, down from $8.9m. Net earnings attributable to common shareholders were $0.3m, down from $1.9m. On each reported quarter, preferred stockholders have received some $0.4m in dividends. The company reports that at the end of May it paid out $6.3m in newly advanced claims by seamen over illness attributable to exposure to asbestos. These claims became known in the first quarter. Other claims, not yet resolved, have been known since 1996. Crowley is after its insurers to make good as much as possible of these losses and says it “will aggressively pursue the insurance claims” for the settlements and legal costs. It adds that “a large number of insurance policies written by dozens of insurance companies over a period of many years” are involved. Crowley maintains that it could recover “substantially all of the settlements.” Protection and indemnity clubs normally foot the bill for personal injury claims, such as those relating to asbestos, that are brought against shipowners. A number of Crowley ships are currently in the UK Club but may have been covered elsewhere during the years the claims relate to. Meanwhile, Crowley is signalling strategic acquisitive ambitions. It points out that this year it has ordered two tank barges and purchased fuel distribution companies in Alaska, Northland Fuel and Yukon Fuel besides selling off its Venezuelan liner logistics operations for some $1.5m. Of its acquisition plans going forward it writes: “To be certain that we have the financial resources required for any project that meets our criteria, we maintain a revolving line of credit that may provide up to $95m and, in December 2003, we received proceeds of $115m from a term loan that can be used for general corporate purposes, acquisitions and/or other corporate projects.” In this connection it reports that it had cash and cash equivalents of $122.2m on hand at the end of June and long-term debt in the amount of $402.8m. |
