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Sea Containers weather storm of reduced third quarter profits

Bermuda-registered marine transport company, Sea Containers Ltd., made $9,767,000 (53 cents a share) for the third quarter to September 30 on revenue of $145 million.

That represents a 43 percent drop from 1994 third quarter profits of $17.2 million ($1.19 per share) on revenues of $153.7 million.

Sea Containers Ltd., registered at the 41 Cedar Avenue address of law firm Appleby, Spurling & Kempe, is a container asset lessor and operates ferries and ports and invests in leisure industry products, such as hotels.

The company is about to announce orders and options for six new high speed car ferries at a cost of about $200 million, with the first two vessels being delivered in early 1997.

Net income for three quarters was $105.7 million ($8.49 a share) on revenues of $374 million.

Operating profits from container asset leasing increased 25 percent to $23.8 million. From the leisure division, operating income leapt 150 percent in the third quarter of 1994 to $5.9 million.

Ferry and port operating income declined from $23.7 million in the third quarter of 1994 to $11.4 million in this year's third quarter, due primarily to the absence, the company said, of income from the ferry unit which was sold. It was also due to reduced revenue from Hoverspeed operations.

Hoverspeed competes with the Channel Tunnel, but a rate war started by other ferry companies drove the price, and therefore the yield down.

President, Mr. James Sherwood, said that despite the absence of traditional ferry income in the third quarter, the results were most encouraging.

There was soft demand in the Far East but strong North American demand and steady demand in Europe.

Mr. Sherwood said the ferry and port operations, other than Hoverspeed, had shown third quarter improvement. Hoverspeed's first full year of competing with the Channel Tunnel, he said, led to interesting results.

Ferry services at the fringes of the Tunnel's influence area had suffered badly and he expected some of them to close. It has meant a major increase in volume on the main corridor to France where both the tunnel and Hoverspeed operate.

He predicted that it would soon mean that the tunnel was operating to capacity and there being a large volume of traffic for the ferries as well. The largest ferry operator on the corridor has just announced a rate increase for 1996.