Inthe New York-listed operator’s first-quarter earnings report management saidthe decision is a reflection of rising demand for tonnage that is eligible tooperate in the US cabotage trade, which is governed by the Jones Act.
Thecompany indicated that it exercised an option to construct a second185,000-barrel tank barge and 10,000-hp tug, which will cost roughly $75min total and is due for delivery in the first half of 2016, just 24 hours ago.
“Including progress payments for this unitand previously announced increases in our inland construction program, we nowexpect our 2014 capital spending to be in the $320 to $330mrange,” added David Grzebinski, who replaced JoePyne as CEO earlier this week.
Inaddition to the option management said Kirby’s board of directors also approveda request to construct two more ATBs. The company failed to elaborate further butindicated it plans to disclose more details and update the capital expenditureforecast when pen meets paper.
Thecommentary came as the operator reported net earnings of $62.3m for the threemonths to 31 March, versus a gain of $57.5m in the same stretch of 2013.Earnings before interest, taxes, depreciation and amortization rose to $146.9mfrom $139.9 year-on-year.
Kirbysaid its latest capital spending estimate includes $135m for the constructionof 66 inland tank barges and one tug plus $80 worth of progress payments forthe two 185,000-barrel ATBs. The balance relates what was described as “capitalupgrades and improvements”.
