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Rail News: Financials

Florida East Coast boosts railway's revenue, operating profit


Yesterday, Florida East Coast Industries (FECI) reported consolidated third-quarter revenue, a 13 percent increase compared with third-quarter 2004. Consolidated net income rose slightly to $10.7 million.

Florida East Coast Railway L.L.C.’s (FECR) quarterly revenue of $59.9 million increased 29.5 percent compared with the same 2004 period. Revenue — which included $3.5 million from fuel surcharges vs. $1.2 million last year — was driven by a 31 percent and 28.7 percent rise in intermodal and carload revenue, respectively.

The 351-mile regional’s quarterly operating profit increased 111 percent to $16.5 million and operating ratio improved 10.7 points to 72.4 compared with third-quarter 2004.

“The performance of the railway has continued to improve and has run ahead of our expectations throughout the year,” said FECI Chairman, President and Chief Executive Officer Adolfo Henriques in a prepared statement. “While the impact from Hurricane Wilma is difficult to ascertain at present, we are maintaining our previous 2005 full-year outlook for the railway's revenues and operating profit growth until an assessment can be completed.”

FECI officials expect the railroad’s 2005 revenue to range between $222 million and $230 million, increasing between 11 percent and 15 percent; and operating profit to range between $56 million and $58 million, rising 18 percent to 23 percent compared with 2004. Officials also predict FECR’s annual capital expenditures will range between $32 million and $36 million.

“We intend to invest additional capital in 2006 to increase the railway's capacity,” said Henriques. “First, we intend to purchase four new locomotives, to be delivered in the third quarter of 2006, [and] second, we intend to add an additional 11 miles of siding from Indian River to Frontenac. Both initiatives represent an investment of approximately $14 million.”