Capital Properties profit falls 65% in ’13 on petroleum storage loss
CAPITAL PROPERTIES – owner of much of Providence's Capital Center real estate, including the land that the Capitol Cove apartments are built on – reported its net income declined 64.7 percent in 2013 to $711,000, due mainly to its underperforming petroleum storage facility in East Providence.
EAST PROVIDENCE – Capital Properties Inc.’s full-year 2013 net income totaled $711,000, or 11 cents per share, a decline of 64.7 percent compared with net income of $2 million, or 31 cents per share, reported for 2012.
The company attributed the year-over-year decline in profit to the continued underperformance of Capital Properties’ petroleum storage facility in East Providence, which it had operated on behalf of Global Companies LLC until the agreement ended in April 2013, leaving the 1.04 million shell barrels of capacity empty. As a result of the gap in utilization, revenue for Capital Properties fell 18.2 percent to $6.7 million on the year.
Beginning Sept. 1, the company entered into an eight-month agreement with Atlantic Trading & Marketing Inc. to use roughly 44 percent of the storage capacity. That agreement is set to run through April, according to the release announcing Capital Properties’ 2013 results, and the two companies are currently in negotiations regarding a possible extension of the lease through April 2015.
Revenue from petroleum storage totaled $2.2 million in 2013, dropping from $4 million the year before. Conversely, Capital Properties saw its leasing revenue increase to $4.5 million in 2013, a 7 percent gain over the $4.2 million in revenue for 2012, due to increases in rent from both short- and long-term leases.
Capital Properties owns a substantial portion of the Capital Center area of Providence and derives leasing income from tenants that have built commercial and residential buildings on the land, including the headquarters of Blue Cross & Blue Shield of Rhode Island, the Waterplace condominiums and the Capitol Cove apartments, among other properties.