Attica eyes ferry firm

Greece’s largest ferry operator, Attica Holdings, wants to snap up a ferry company in northern Europe this year, using its 200-million-euro ($255.3 million) cash hoard, its chief executive officer said yesterday. In an interview with Reuters, CEO Alexander Panagopoulos said the European ferry market is poised for consolidation and that the company had received several proposals from other ferry operators seeking to be acquired. «Consolidation is very much the theme in the ferry market in Europe, and Attica is one of the natural consolidators on a pan-European scale,» he said. «We are receiving unsolicited proposals for Attica to acquire companies, and they do spark our interest,» he said. «The question is how much leverage do we want on our 200-million-euro cash balance.» He said an announcement might come after the summer that an acquisition could be anywhere between 200 million and 1 billion euros. Attica Holdings is one of Europe’s largest passenger shipping companies, operating international routes in the Adriatic, North and Baltic seas primarily through its 100 percent-owned Superfast Ferries subsidiary. Its stock trades at 16.4 estimated 2006 earnings, close to the European maritime sector average but below other ferry companies. Baltic ferry giant Finnlines trades at about 29 times, according to Reuters Estimates. Cash to spend In April, Superfast sold three of its ships in the Baltic to Estonia’s Tallink Group for 310 million euros. After paying off debt and returning 60 million to shareholders, Attica added 42 million euros to the 150 million in cash it already had on its books. Panagopoulos indicated the company was looking to acquire one of the ferry operators in the English Channel and possibly deploy new high-speed ferries. Since the opening of the Channel Tunnel in 1994, and more recently from the competition posed by budget airlines such as easyJet and Ryanair, channel ferry operators have seen their profit margins collapse. «The cross-channel market has been a bloodbath,» said Panagopoulos. «The ferry operators have seen their market disappear to budget airlines.» In addition, he said many of the ferry lines had depended on revenues from the sale of on-board, duty-free goods, a market which no longer existed between France and England. «We have moved on from the era of duty-free sales, which were the key driver in the Baltic Sea and also between the UK and France,» he said. «We are now in a new era of competition from low-cost airlines, Internet sales and speed. Because transportation requires speed, it is no longer about leisure.» The group’s 48.8 percent-owned Blue Star Ferries unit is the market leader in key Greek island routes, transporting about 4.5 million passengers a year, or roughly a quarter of Greece’s annual passenger traffic. Year-to-date, Attica’s share price is up 5.47 percent, closing at 4.24 euros on Thursday.