TIDMHCL
RNS Number : 6125L
Hellenic Carriers Limited
06 September 2012
H1 2012 Financial Results
Press Release 6 September 2012
HELLENIC CARRIERS REPORTS 2012 INTERIM UNAUDITED RESULTS
Hellenic Carriers Limited, ("Hellenic" or the "Company") (AIM:
HCL), an international provider of marine transportation services,
which owns and operates through its wholly owned subsidiaries a
fleet of three dry bulk vessels that transport iron ore, grain,
steel products and minor bulk cargoes, reports today its Interim
Unaudited Results for the six months ended 30 June 2012.
The Company's management team will be holding a conference call
and webcast today, at 2pm (London), 4pm (Athens) and 9am (New York)
to discuss the results.
H1 2012 FINANCIAL AND OPERATIONAL HIGHLIGHTS
Þ Revenue US$8.9 million (H1 2011: US$20.8 million)
Þ EBITDA(1) US$0.5 million (H1 2011: US$12.2 million)
Þ Operating Loss US$4.8 million before non-cash items (H1 2011:
US$5.5 million Operating Profit before non-cash items)
Þ Net Loss US$7.3 million excluding non-cash items (H1 2011:
US$3.1 million Net Income excluding non-cash items)
Þ Non-cash impairment charge US$4.1 million (H1 2011: US$ nil)
Þ Non-cash gain on sale of vessel US$2.3 million (H1 2011: US$ nil)
Þ Gearing ratio(2) at 28.6% as of 30 June 2012 (30.2% as of 31 December 2011)
Þ Total cash, including restricted cash of US$50.9 million as of
30 June 2012 (US$48.0 million, as of 31 December 2011)
Þ Reduction of Gross debt to US$84.9 million on 30 June 2012
(US$88.2 million on 31 December 2011) resulting in a net debt
position of US$33.9 million as of 30 June 2012 (US$40.1 million as
of 31 December 2011)
Þ Time Charter Equivalent rate of US$8,338 (H1 2011: US$21,397)
in line with market average earnings for the period
Þ Operation of a fleet of 4.8 vessels on average compared to 5.0 vessels in H1 2011
(______________)
1 EBITDA has been calculated as follows: Operating profit +
Depreciation + Depreciation of dry-docking costs + Impairment
charge - Gain on sale of vessel 2 Gearing ratio is defined as Net
Debt to total capitalization (debt, net of deferred financing fees
less cash and cash equivalents to net debt and stockholders'
equity)
Management Commentary
During H1 2012, a particularly challenging period for the dry
bulk shipping market, management took certain steps to set the
foundations for the Company's future development. In particular, we
sold the two older vessels of the fleet, namely the M/V Hellenic
Sky and the M/V Hellenic Sea, for a total consideration of US$15.4
million. Furthermore, we secured from our lenders the option to use
such sale proceeds within 2013 as debt financing towards the
acquisition of modern second hand bulk carriers. Last, but not
least, we extended the term of the current loan facilities thereby
significantly lightening the principal installments due
henceforth.
The results of the strategy adopted are twofold. On the one hand
we facilitate cash preservation amidst an environment of depressed
returns and limited liquidity. On the other hand, we secure
financing for the acquisition of second hand ships within an
extended time frame, at levels which are approaching the last
decade's lows and during times when bank debt is either unavailable
or offered on the basis of very unfavorable terms. We believe that
the expansion of the fleet through the acquisition of attractively
priced ships prepares the Company for the next cycle and enhances
its future profit generation capacity.
We decided to act in the pre-emptive manner described above,
since in our opinion the dry bulk market will continue to be
challenging in the medium term. The current market levels are
justified when the constant inflow of new buildings against a
softening global economy is taken into account. Both of these
factors are not expected to subside in the near future. It will
take some time before the new tonnage is absorbed, while scrapping
of the older fleet continues. And although demand for dry bulk
commodities from the developing countries remains solid, the
prospects of the mature economies are uncertain and may temporarily
affect the growth potential of the emerging economies.
However, we should not lose sight of the positive signs for the
future of our market. The developing economies still have a long
way to go until they meet their targets in order to improve the
living conditions of their populations. This means continued need
for imports of raw materials. The dry bulk fleet, although expanded
and renewed during the last 4 years, still encompasses a
significant percentage of over aged ships, which are bound to be
scrapped. At the same time, limited and expensive credit has a
dampening effect on new orders for dry bulk vessels.
In this environment our Company has taken steps towards the
right direction. We are well positioned not only to endure the
challenging market conditions, but also to take advantage of the
real opportunities which will arise in order to expand our fleet
and enhance shareholder value.
Fleet Developments
On 16 May 2012, Thasos Shipping Co. Ltd. ("Thasos"), the ship
owning company of the M/V Hellenic Sky completed the sale of the
68,591 dwt Panamax vessel built in 1994 at Sasebo Heavy Industries
in Japan.
The M/V Hellenic Sky was sold to an unaffiliated third party at
a price of US$10.1 million.
The vessel was acquired in July 2003 at a price of US$13.2
million. During the past nine years of its operation, the vessel
contributed approximately US$19.4 million to the Company's net
profit. Taking into account the net book value of the vessel and
the sale related expenses, the Company realised a net book gain of
approximately US$2.3 million on this sale.
Subsequent to the period ended 30 June 2012, the 65,434 dwt
Panamax dry bulk carrier, M/V Hellenic Sea, built in 1991 at
Jiangnan Shipyard in China, was sold to an unaffiliated third party
for a total cash consideration of US$5.3 million. The vessel was
delivered to the buyers on 23 August 2012.
The vessel was acquired in March 2002 at a price of US$9.6
million. During the past ten years of its operation, the vessel
contributed approximately US$40.6 million to the Company's net
profit. Taking into account the vessel's net book value and
expenses related to the sale, the Company expects to realise a net
book loss of approximately US$0.2 million on this sale.
The Company's intention is to use the proceeds from the sale of
the two vessels towards future acquisition opportunities in the dry
bulk sector. In particular, the lenders of M/V Hellenic Sky and M/V
Hellenic Sea have agreed to transfer the proceeds from the sale as
bank financing towards the acquisition of modern second hand bulk
carriers, within a period of 18 months and 12 months from the
vessels' delivery to the buyers respectively.
Further to the above mentioned sale, as at the date of this
release, the Company owns and operates through its subsidiaries a
fleet of three dry bulk carriers comprising one Panamax, one
Supramax and one Handymax with an aggregate carrying capacity of
169,116 dwt and a weighted average age of 15.2 years.
Current fleet details:
Operating Fleet
--------------------------------------------------------------------------------
Vessel Type Yard Year Carrying
Built Capacity
(dwt)
------------------ ---------- -------------------------- -------- ----------
M/V Hellenic Tsuneishi Shipbuilding,
Wind Panamax Japan 1997 73,981
------------------ ---------- -------------------------- -------- ----------
M/V Konstantinos Mitsui Engineering &
D Supramax Shipbuilding, Japan 2000 50,326
------------------ ---------- -------------------------- -------- ----------
M/V Hellenic Halla Engineering &
Horizon Handymax Heavy Industries, Korea 1995 44,809
------------------ ---------- -------------------------- -------- ----------
Total Operating Fleet: 3 Vessels 169,116
-------------------------------------------------------------------- ----------
In addition, there are two Kamsarmax vessels on order at
Zhejiang Ouhua Shipbuilding Co. Ltd., in China with contractual
delivery dates January and March 2013. The two ships have an
aggregate carrying capacity of about 164,000 dwt.
Loan facility agreements securing financing of up to 65% of each
vessel's market value upon delivery or maximum US$22.1 million per
vessel have been signed. Such amounts shall be drawn down upon
delivery of each new building vessel from the shipyard. The Company
has no further financial commitments to the shipyard until delivery
of the vessels in 2013.
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