Oil prices hit profits at Interbulk

LOGISTICS company Interbulk, in which engineering entrepreneur Jim McColl holds a 5 per cent stake, yesterday admitted that rising oil prices had held back profit growth.

The East Kilbride-based firm posted a 16 per cent rise in sales during the six months to 31 March to 146.2 million but said operating profits had only nudged up from 7.3m to 7.5m. Yet interim pre-tax profits surged from 558,000 to 1.9m after it cut the interest payments on its debt by 1.3m.

Chief executive Koert van Wissen told The Scotsman that the firm would be passing on rising fuel costs to its clients over the next two to three months.

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He added: "Increases of this size were beyond everyone's expectations and so it will take a few months to pass on the costs."

Last month Interbulk raised 18.2m through a share placing with Chinese logistics group Sinotrans, with 17.4m from the deal destined to pay down the firm's 106.5m debt.

Interbulk floated on Aim in 2006 after a reverse takeover led by McColl. The company initially paid private equity company 3i 46.2m for Rotterdam-based United Transport Tankcontainers and 8.5m for InBulk Technologies, another part of McColl's group. In 2007, the company acquired UBC, Europe's largest dry bulk container company, in a 79.5m deal.

Finance director Scott Cunningham said the Sinotrans deal was expected to be completed by the end of the month.

When the deal was announced, Cunningham estimated that the cash injection would help to reduce interest payments by some 2.6m a year.

McColl, who is also a non-executive director of the firm, will see his stake diluted to about 3 per cent after the placing.

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