JEFFERSONVILLE — Halfway through the year, American Commercial Lines Inc. is showing a major turnaround compared to last year’s six-month figures.

According to the barge manufacturer’s second-quarter earnings report, the company showed earnings of $6.5 million, compared to a $15.6 million loss through two quarters last year.

“We continue to see solid year-over-year improvements in our financial performance as a result of our focus on safe and efficient operating practices and cost control,” said Mark Knoy, president and CEO, in the earnings report. “We have also enjoyed a robust demand for our liquid transportation services and reasonably good operating conditions to date.”

The overall increase has been driven partially by an increase in revenues in each of the barge manufacturer’s segments.

Revenues for the current quarter increased 9 percent over the prior year’s second quarter to $218.7 million. Revenues for the current six-month period increased 16 percent over the prior six-month period to $436.8 million, according to the report.

By segment, transportation revenues increased 10 percent to $324.4 million for the six-month period, according to the earnings report. And for Jeffboat, ACL’s manufacturing segment, revenues for the current six-month period increased 53 percent to $80.3 million, with 144 barges sold to third parties compared to 99 barges in the prior six-month period.

One decline was noted in revenues for the company’s dry cargo revenues, which declined by 2 percent, according to the report.

However, the drop was negated by a 22 percent increase in the company’s liquids business over the six-month period. According to the report, the net barrel capacity of the liquid fleet increased by more than 6 percent as a result of the addition of 16 tank barges, which included eight Jeffboat-built tank barges.



Upcoming risks

The early positive numbers are a good sign for the inland ship builder.

ACL generally posts its best numbers in the last two quarters of the year because grains and corn are harvested and shipped later in the year, and as a result, pushes up demand for barge transportation.

However, the drought conditions that have existed this summer may affect revenues later in the year.

According to the report, progress in ACL’s bottom line was made despite a challenging dry cargo market, where the market has endured rate pressure resulting from weak domestic coal demand, uncertainties in the grain markets linked to the developing drought and the overall sluggishness of the US economic recovery.

“Drought conditions are presenting us with several challenges as river conditions have worsened in recent weeks,” Knoy said in the report. “These low water conditions are causing operating inefficiencies. At this time, the potential impact of the drought on the grain harvest and our business is unclear.

“Factors such as domestic demand for grain for ethanol and livestock consumption, as well as global grain price dynamics will also have an impact on U.S. grain export levels.”



Continued fleet changes

Part of ACL’s ongoing effort at Jeffboat has been to update its shipping fleet.

According to the earnings report, the manufacturing segment’s backlog is lower than it was in the second quarter of 2011 and at the end of the year last year. The decline is attributable to the revitalization of the fleet and there is no additional 2012 capacity for external barges.

Despite a lower number of ships being produced and operating as part of ACL’s fleet, the company reported an increase in volume with a fleet that was 18 percent smaller.