ECONOMY

Coastal shipping appears to be on the right course

Greek coastal shipping sailed on a positive course in 2005, achieving a decline in its bank borrowing by 4 percent and increasing both its turnover by 4 percent and the improvement of its net results by 38 percent compared to 2004, according to the XRTC consultancy firm. At the same time the sector is showing a decline in the passengers and vehicles carried, a drop in active ships and a rise in operation costs due to oil prices. Last year created serious concerns at the Merchant Marine Ministry and coastal shipping companies in their efforts to find the actual number of vessels required to cover the transport needs of the Greek islands. However, XRTC reports, new ships can only set sail if there is investment, which in turn requires a clear institutional framework – in other words, full liberalization, as the EU dictates. Companies must also realize that the national network of maritime transport does not only include profitable routes but is also a public service for remote and unpopular islands. Coastal shipping companies managed in 2005 to renegotiate their loans and improve their positions. In 2002 the total of the five listed companies’ bank obligations stood at 2.1 billion euros and declined to 1.69 billion euros last year. This is attributed to two reasons: the normal repayment of loans thanks to restructuring and the sale of vessels. In 2005, despite the rise of fuel prices by 30 percent, companies achieved a significant improvement in their turnover and their profits. The total cost of fuel in 2004 for listed companies reached 199.2 million euros, or 47 percent of operating costs, and rose to 257.7 million euros in 2005, or 64 percent of operating costs. Listed companies last year recorded a rise in turnover of 4.7 percent in the Aegean market year-on-year and a 3.5 percent rise in the Adriatic. Earnings before interest, tax, depreciation and amortization rose by 1.4 percent compared with 2004, while total investment in new ships in the 1999-2002 period came to $3.5 billion. However the lack of investments means the number of ships shrank from 131 in 2002 to just 87 last year.