Wednesday, February 21, 2024
Hawai'i Free Press

Current Articles | Archives

Tuesday, November 8, 2011
Horizon Lines Reports $126M Loss in 3rd Quarter
By Selected News Articles @ 8:49 AM :: 6392 Views :: Energy, Environment, National News, Ethics

Journal of Commerce: Horizon Loses $126.4 Million, Expects Stabilization

Carrier expects better results after refinancing, ending trans-Pacific service

by Joseph Bonney Nov 7, 2011

Horizon Lines lost $126.5 million from continuing operations in the third quarter, compared with a $8.2 million net profit a year earlier, but expects its recent refinancing and exit from the trans-Pacific market to stabilize future results despite “challenging” economic conditions.

The results, announced after the market’s close Friday, included a $117.5 million goodwill impairment charge stemming mainly from the shutdown of the trans-Pacific service and deteriorating earnings. Horizon said the amount of the goodwill impairment is an estimate that may be adjusted during the fourth quarter.

Horizon announced last month it would discontinue its services between the U.S. West Coast and Guam and from China to the United States. The service’s last scheduled sailings are this week.

The company said it expects the shutdown of the trans-Pacific service to produce a pretax restructuring charge of $105 million to $110 million in the fourth quarter, following negative adjusted earnings before interest, taxes, depreciation and amortization of approximately $43.7 million for the year’s first nine months.

Horizon launched the trans-Pacific service last December after Maersk Line did not renew a take-or-pay agreement for eastbound capacity on the backhaul of Horizon’s service from the U.S. mainland to Guam. Horizon is laying up the service’s five chartered ships, each with capacities of 2,824 20-foot-equivalent units, and seeking to subcharter them.

The new trans-Pacific business helped boost Horizon’s operating revenue 8.2 percent to $321.9 million in the third quarter and 5.9 percent to $914.8 million through the year’s first nine months.

But operating expenses rose 16.1 percent to $280.9 million in the third quarter and 14.3 percent to $830.3 million during the years’ first three quarters. Horizon’s vessel fuel costs increased $46.4 million through September.

Horizon’s continuing operations produced negative earnings before interest, taxes, depreciation and amortization of $98.6 million in the third quarter, compared with positive $33.2 million a year earlier. Adjusted EBITDA fell to $21.9 million from $36.6 million.

Horizon said economic conditions in its domestic markets are continuing “at a slow and uneven pace.” The carrier serves Puerto Rico, Hawaii and Alaska in addition to the discontinued Guam service.

The company said it expects to be in compliance with its debt covenants through 2012 as a result of its recently completed $652.8 million refinancing that staved off the threat of defaults.

“We believe the refinancing, together with the decision to terminate our trans-Pacific service, positions us on solid financial footing with adequate liquidity to fund both the shutdown (of the trans-Pacific service) and continuing operations, and with the opportunity to deliver a more predictable financial performance in the future,” Horizon said in a filing with the Securities and Exchange Commission.

---30---

American Shipper: Horizon reports $126 million loss in 3Q

Links

TEXT "follow HawaiiFreePress" to 40404

Register to Vote

2aHawaii

808 Silent Majority

Aloha Pregnancy Care Center

AntiPlanner

Antonio Gramsci Reading List

A Place for Women in Waipio

Ballotpedia Hawaii

Broken Trust

Build More Hawaiian Homes Working Group

Christian Homeschoolers of Hawaii

Cliff Slater's Second Opinion

DVids Hawaii

FIRE

Fix Oahu!

Frontline: The Fixers

Genetic Literacy Project

Grassroot Institute

Habele.org

Hawaii Aquarium Fish Report

Hawaii Aviation Preservation Society

Hawaii Catholic TV

Hawaii Christian Coalition

Hawaii Cigar Association

Hawaii ConCon Info

Hawaii Debt Clock

Hawaii Defense Foundation

Hawaii Family Forum

Hawaii Farmers and Ranchers United

Hawaii Farmer's Daughter

Hawaii Federalist Society

Hawaii Federation of Republican Women

Hawaii History Blog

Hawaii Homeschool Association

Hawaii Jihadi Trial

Hawaii Legal News

Hawaii Legal Short-Term Rental Alliance

Hawaii Matters

Hawaii's Partnership for Appropriate & Compassionate Care

Hawaii Public Charter School Network

Hawaii Rifle Association

Hawaii Shippers Council

Hawaii Smokers Alliance

Hawaii State Data Lab

Hawaii Together

HIEC.Coop

HiFiCo

Hiram Fong Papers

Homeschool Legal Defense Hawaii

Honolulu Moms for Liberty

Honolulu Navy League

Honolulu Traffic

House Minority Blog

Imua TMT

Inouye-Kwock, NYT 1992

Inside the Nature Conservancy

Inverse Condemnation

Investigative Project on Terrorism

July 4 in Hawaii

Kakaako Cares

Keep Hawaii's Heroes

Land and Power in Hawaii

Legislative Committee Analysis Tool

Lessons in Firearm Education

Lingle Years

Managed Care Matters -- Hawaii

Malama Pregnancy Center of Maui

MentalIllnessPolicy.org

Military Home Educators' Network Oahu

Missile Defense Advocacy

MIS Veterans Hawaii

NAMI Hawaii

Natatorium.org

National Christian Foundation Hawaii

National Parents Org Hawaii

NFIB Hawaii News

No GMO Means No Aloha

Not Dead Yet, Hawaii

NRA-ILA Hawaii

Oahu Alternative Transport

Obookiah

OHA Lies

Opt Out Today

OurFutureHawaii.com

Patients Rights Council Hawaii

PEACE Hawaii

People vs Machine

Practical Policy Institute of Hawaii

Pritchett Cartoons

Pro-GMO Hawaii

P.U.E.O.

RailRipoff.com

Rental by Owner Awareness Assn

ReRoute the Rail

Research Institute for Hawaii USA

Rick Hamada Show

RJ Rummel

Robotics Organizing Committee

School Choice in Hawaii

SenatorFong.com

Sink the Jones Act

Statehood for Guam

Talking Tax

Tax Foundation of Hawaii

The Real Hanabusa

Time Out Honolulu

Trustee Akina KWO Columns

UCC Truths

US Tax Foundation Hawaii Info

VAREP Honolulu

Waagey.org

West Maui Taxpayers Association

What Natalie Thinks

Whole Life Hawaii

Yes2TMT