Camillo Eitzen & Co ASA - Profit warning and sale of vessel

19 Feb, 2009

As a result of lower than expected earnings from the gas segment combined with increased provisions against postponement of cargoes and potential but unrealized losses on future contracts in the bulk segment, the Camillo Eitzen & Co ASA Q4 result will be weaker than anticipated.

The gas market was affected by reduced volumes under our contracts of affreightment (COA's), lower freight rates in the spot market, increase in waiting days. This has resulted in earnings reduction of about 20% compared to Q3 and EBITDA of approximately USD 4.2 million from the gas segment. In an effort to adjust our capacity in the smaller semi./ref. segment, Eitzen Gas has sold the 1985 built 1,641 cbm semi/ref. Sigas Mariner. As a result of weaker market value of vessels, we have impairment tested the book value of the gas fleet, which has resulted in the need for a write down of USD 40.9 million.

The lower market values have also resulted in breach of two of six covenants for the Eitzen Gas loan. The minimum value covenant was restored after the ordinary installment 6 January, while the minimum adjusted capital ratio related to Camillo Eitzen & Co ASA remains in breach. CECO has initiated a dialogue with the banks with the purpose to obtain a waiver for a period. As a result of the breach of covenant the entire outstanding USD 158 million gas facility will be posted as short term debt until a waiver is obtained.

The bulk market has been affected by continued turbulences, resulting in postponement of cargoes under COA's for Eitzen Bulk. As a result Eitzen Bulk will take about USD 14 million in provision during the quarter, whereof the majority is related to postponement of cargoes. EBITDA for the 4th quarter will be approximately USD -5.9 million. Eitzen Bulk has however not suffered any material loss from settlement of its Freight Forward Contracts (FFA's).

Camillo Eitzen & Co ASA has during Q1 refinanced a USD 40 million corporate loan agreement with Nordea, with maturity in Q1 2010.

Camillo Eitzen & Co ASA will present Q4 results Friday 27 February

Camillo Eitzen & Co ASA