SeaLink’s Glenelg-Kangaroo Island ferry plan, Vivonne Bay rebuild on ice due to SA ferry contract ‘uncertainty’, posts $13.5m full year loss
SeaLink has put plans for a fast ferry service from Glenelg to KI and the rebuild of its Vivonne Bay Lodge on ice because of “uncertainty” over its contract.
SA Business
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SA-based national travel giant SeaLink says “uncertainty” over its long-term ferry services contract to Kangaroo Island has put its ongoing investment plans for the region on hold.
SeaLink’s KI ferry contract expires in 2024 following the state government’s decision in 2018 to put the contract out to tender.
SeaLink has run the ferry service from Cape Jervis to Penneshaw under a licence agreement for more than 30 years.
“Given the industry outlook (due to COVID-19), all our investment plans for the region, including the fast ferry from Glenelg and the rebuild of the Vivonne Bay Lodge depend on what happens with that contract,” chief executive Chief executive Clint Feuerherdt said.
SeaLink last year revealed it was in discussions with the state government for a “fast ferry” from Glenelg to KI.
It is also considering a rebuild of its Vivonne Bay Lodge on KI, which was destroyed in the summer bushfires.
Mr Feuerherdt was speaking on the sidelines of reporting a full year after-tax loss of $13.5m to the end of June.
The underlying result, after tax but before amortisation, was strong, a profit of $37.2m, up 47 per cent on the previous year.
The business, which earns 85 per cent of its income from government transport contracts nationally and in London and Singapore following a $635m buyout of Transit System Group, said revenues to the end of June totalled $646.5m.
SeaLink, which employs 8600 staff across its bus, tram and ferry transport and tourism services nationally and internationally, said it had received some support from the state towards port charges and was receiving funding from the Federal JobKeeper scheme.
The business recorded a $12.4m non-cash impairment related to COVID-19, including a write-off of its investment in UWAI, some of the goodwill associated with its Fraser Island operations and the carrying value of under-utilised vessels, especially relating to its lunch and dining tourism experiences.
SeaLink told investors it had “adapted and continued to trade strongly” through one of the most challenging operational environments on record.
“Despite the impacts of the bushfires across most of Australian during January 2020 and the ongoing COVID-19 pandemic, the result reflects the strong underlying nature of the essential services that SeaLink delivers to the cities and islands that it serves,” Mr Feuerherdt said.
“While the public transport operations have continued to deliver in line with expectations, the marine and tourism division in understandably greatly affected by border closures.
“The outlook for the group continues to be positive,” he said.
Mr Feuerherdt, who joined SeaLink in January, took home $1.1m in remuneration to the end of June, including incentives, while former chief executive and now chairman Jeff Ellison was paid $1.2m.
SeaLink will pay investors a 4.5c dividend per share on October 2.
Shares in SeaLink were up more than 6.5 per cent in afternoon trading.
