Shipping firms healthier

Developments in the passenger shipping sector are accelerating. After a three-year period of difficulties caused by big debts, companies have rallied. The first signs of a recovery should be apparent in their financial results for the first half of 2004. This year will be crucial for domestic passenger shipping. All indications point to a big shake-up, since the monopoly of Greek passenger shippers ends on November 1 and foreign firms will be allowed to compete for market share in routes in the Aegean and Ionian seas. Last year, domestic passenger shippers made a great effort to contain costs. They also completed negotiations with banks for a restructuring of their debt with more favorable terms. It is an indication of their success in both that the passenger shipping index on the Athens Stock Exchange (ASE) showed the greatest turnaround of all sectoral indices. In general, 2003 was a good year for passenger shippers, despite the fact that the war in Iraq and the SARS scare hit international tourism. That does not mean that difficulties are over. If anything, competition is intensifying. For example, Strintzis Lines, an Attica Enterprises subsidiary and the operator of Blue Star ferries is heavily competing with ANEK for the lucrative Piraeus-Hania route. Iraklion-based Minoan Lines, in search of a partner, would be favorable to a partnership with ANEK, although questions of oligopoly could arise. DANE Lines, which operates in the Dodecanese, is in difficult straits. In its recent annual general meeting, which lasted more than six hours, ANEK, DANE’s main shareholder, made it clear that it neither wants to bail out nor shut down DANE. Nonetheless, ANEK representative Iosif Manoussoyianakis said that the main shareholder will make the major decisions without taking account of critical views. He added that a restructuring program will show results in about a year’s time and that the return of DANE’s shares to trading on the ASE is feasible. Gerassimos Kalogeratos, one of DANE’s main shareholders, accused ANEK of «driving away» all potential investors. Despite these objections, a new DANE board was elected. Attica Enterprises confirmed its leading position in the sector last year, with earnings before interest, taxes, depreciation and amortization (EBITDA) rising 65 percent to 100.8 million euros. Net pretax profit rose 317 million to 28.3 million on sales of 385.5 million euros. Of these, 253.7 million was generated by the Superfast ferries and 131.8 million from Blue Star ferries. (In the first quarter of 2004, EBITDA increased 284 percent to 10 million euros, compared to the same period in 2003, on turnover of 69.7 million, up 7 percent.) In 2003, Attica Enterprises reduced financial expenditure by 14.5 million euros. Minoan Lines returned to profitability in 2003, posting net profit of 1.3 million euros, after two seasons with losses. Turnover increased 7.9 percent, to 194.2 million euros. ANEK’s results also improved in 2003. Turnover rose 7.21 percent, to 171.7 million euros, and EBITDA rose to 35.62 million, compared to 34.43 million in 2003, while financial expenditure was reduced 12.06 percent. Net pretax profit was 4.09 million euros. On the contrary, Maritime of Lesvos (NEL) showed both turnover and pretax profit decrease, by 6.3 percent (to 64.4 million euros) and 38.3 percent (to 937,000 euros) respectively.