Patriot Transportation Holding Inc.’s operating earnings were basically flat in the fiscal year that ended Sept. 30, but considering the state of the economy, President and CEO Tom Baker thinks the Jacksonville-based transportation and real estate company’s management team performed “admirably” last year.
“Fiscal year 2011 was a challenging year for the company as both the transportation and real estate markets remained very competitive,” Baker told shareholders at Patriot’s annual meeting Wednesday.
The trend of flat operating earnings continued in the first quarter of fiscal 2012. Patriot on Wednesday reported that operating income in the quarter ended Dec. 31 was $3.21 million, compared with $3.19 million the previous year.
Because of a land sale in the first quarter of fiscal 2011, final net income of $2.1 million, or 23 cents per diluted share, in the first quarter this year was sharply lower than last year’s earnings of $6.4 million, or 68 cents a share.
While Patriot waits for a better economy, the company is taking steps to improve profitability in the future, Baker said.
The company’s trucking subsidiary, Florida Rock & Tank Lines Inc., added 40 drivers last year, bringing its total to 560. It also added another 18 in the first quarter this year.
Baker said with a shortage of qualified drivers available, it’s important to bring in as many safe and experienced drivers as the company can.
“This has been the focus of the management team,” he said.
The trucking business is Patriot’s biggest segment, accounting for $97.8 million of its $120.1 million in total revenue last year.
It transports mainly petroleum products in the Southeast, but the company has been taking steps to diversify by acquiring 15 dry bulk tankers that now are carrying cement in Florida and Georgia, Baker said.
Patriot’s real estate division develops and manages commercial properties mainly in the Maryland, Virginia and District of Columbia markets. Baker said the company is focused on leasing space it has now instead of developing new properties.
Occupancy at Patriot’s commercial properties rose from 72 percent to 79.8 percent during fiscal 2011, and it increased to 82.8 percent at the end of the first quarter.
“Our goal is to get back to 90 percent,” Baker said.
In addition to Patriot’s transportation and real estate business, the company also has a mining royalty segment that leases land for mining of construction materials.
It’s the smallest segment of the business, with $4.3 million in revenue last year, and revenue has declined each of the past two years.
Baker believes that business will eventually pick up because the construction markets will eventually come back.
“Long-term, we believe in this segment of the business,” he said.
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