Farrell Reports $35-Million Turnaround — Sells Four Ships To U.S. Lines

Farrell Lines expects to record a modest net profit for 1982, Richard V. Parks, president and chief operating officer said recently.

This represents a $35-million operating turn-around over the previous year.

Mr. Parks also predicted an operating profit for the 58 year old U.S. flag steamship line in 1983, basing his forecast on the sale recently of four 1,700 TEU containerships to United States Lines and a brighter outlook in Farrell's Mediterranean, West African and chartering divisions.

The four Farrell containerships sold to U.S. Lines have been deployed on the North American/ Australian and New Zealand trade route. The sale to U.S.

Lines will result in the suspension of Farrell Line's service to this region.

The total package for the four Farrell containerships totals approximately $150 million, including debt, mortgages, and equity capital.

"The sale of these vessels will have a favorable impact on our balance sheet expediting the continuing turn-around of Farrell Lines. It will make Farrell Lines much more viable and stronger," Mr. Parks said.

Farrell Lines is suspending its Australian service mainly because of high operating costs on that trade route and declining cargo volume due to a softening of the region's economy. Farrell Lines will honor all current cargo commitments between North America and Australia and New Zealand with the four voyages in progress.

The company is o p t i m i s t ic about its Mediterranean and West African trade routes, where it holds a substantial cargo position.

It believes it will further expand its market share in that region of the world due to anticipated economic growth and Farrell's position as a U.S.-flag carrier. The Line's charter division is also projected to do well in 1983.

Mr. Parks joined Farrell Lines in 1979 and was appointed president and chief operating officer in 1981. The company subsequently has reorganized its top management staff, i n s t i t u t i ng tight financial controls, trimming inefficiencies, emphasizing quality service and innovative approaches to customer needs.

The four vessels involved in the sale to U.S. Lines are the Austral Pioneer, Austral Puritan, Austral Envoy, and the Austral Entente.

Maritime Reporter Magazine, page 67, Mar 1983

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