Tropical Shipping’s parent company sold
Tropical Shipping’s parent company finalized a deal yesterday to sell its operations to an Atlanta-based company for$2.4 billion,Guardian Businesscan confirm. The’jury’is still out on how the move will affect one of the largest freight businesses in this country.
International reports yesterday indicated that Nicor Inc. had agreed to sell its billion-dollar operations to AGL Resources for cash and stock, creating one of the largest natural gas distributors in the United States. Nicor also owns Tropical Shipping.
While there have been reports that the deal could mean Tropical Shipping could be up for sale, Nicor representatives yesterday said the freight business was actually a good’fit’for AGL Resources.
“Tropical Shipping is a good, well-run operation,”said the company’s Director of Corporate Communications Annette Martinez.”At first glance, it may not appear that the business fits, but there are actually some commonalities between it and their(AGL’s)utility operations.
“It’s an asset-based business focused on outstanding customer service and, like their(AGL’s)utility operations, it’s a low-cost provider.”
Nicor Inc.’s largest subsidiary is Nicor Gas, which provided almost 80 percent of its sales in 2009.
Tropical Shipping, Nicor’s shipping subsidiary, carries containerized freight between Florida, The Bahamas and much of the Caribbean region. Its cargo largely consists of building materials, food and other necessities for developers, manufacturers and residents in the region.
The news follows an earlierGuardian Businessarticle outlining that jobs could be on the line at Tropical Shipping, following its U.S. parent company’s announcement it is pursuing”head count reductions”as it battles against a drop in income.
For the first quarter of 2010 Nicor Inc. saw operating income generated by its shipping interests fall from$6.6 million in 2009 to a$500,000 loss this year. This was compounded by a drop in operating revenues from$89.4 million in the first quarter of 2009 to$83.5 million this year.
To date, no indication has been given as to where the jobs axe may fall with Tropical having a number of bases in the U.S. as well as here in Nassau, in Freeport and in Marsh Harbour, Abaco. The”head count reductions”are expected to be in addition the closure of its West Palm Beach cargo facility in Florida, transferring that work to the company’s Miami-based warehouse.
The drop in revenue comes after management at Tropical had reversed a$72 million battering on its income in 2009, emerging from the turbulent year with almost$30 million of operating profit.
That represented a$10 million drop in income on the year before, but the company did manage to plough$62.5 million in savings back to redress the performance.