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The Company’s net loss for the quarter was $0.5 million or $0.03 per basic and diluted share, principally as a result of the weaker spot crude tanker market environment that prevailed throughout the quarter. Gross revenues amounted to $14.9 million for the quarter, including $0.2 million of profit sharing revenues. Specifically, the average TCE earnings for the Company’s VLCC and Suezmax vessels on operations during the quarter were $21,554 and $18,867 per day, respectively. During the quarter the Company employed on average 2.2 vessels under the Shell spot index-related time charter. Total expenses for the quarter amounted to $14.0 million, of which $5.8 million were voyage expenses, comprised mostly of bunker costs, and $3.3 million were operating expenses. General and administrative expenses were $1.0 million for the quarter, including a non-cash item of $0.2 million related to the equity compensation expense. Net interest expense and finance cost for the quarter was $1.4 million, principally relating to the $134.6 million outstanding debt during the third quarter of 2010, drawn under our $200.0 million revolving credit facility. Quarterly Dividend of $0.20 per share The Company’s dividend policy, as described in the listing prospectus, is to pay a variable quarterly dividend based on its cash available for distribution, which represents net cash flow generated by its vessels trading in the spot crude tanker market during the previous quarter, less any amount required to maintain a reserve that its Board of Directors (the “Board’) determines from time to time as appropriate for the operation and future growth of the fleet. The Company generated approximately $3.2 million in cash available for distribution during the quarter and its Board declared a cash dividend of $0.20 per share for the period of July 1, 2010 to September 30, 2010.The cash dividend is payable on December 7, 2010 to all shareholders of record on November 24, 2010. Cash available for distribution is a non US GAAP financial measure and is discussed in more detail in Appendix A of this press release and in the Company’s second quarter 2010 earnings release. Crude Tanker Market Overview Crude spot market rates remained depressed for most of the third quarter, as seasonally weaker demand coincided with the return of a number of crude tankers to the spot market, which were previously deployed in the storage business. This resulted in the availability of a large number of vessels in the trading areas of particular interest to the Company, as it is reflected by the Baltic Dirty Tanker Route 3 (‘TD3’) (Middle Eastern Gulf-Japan) and the Baltic Dirty Tanker Route 5 (‘TD5’) (West Africa – US East Coast) indices, which averaged approximately $16,332 per day and $8,537 per day, respectively, for the quarter. Employed Fourth Vessel to Shell under Spot Related Time Charter The Company agreed to employ the VLCC vessel M/T ‘Achilleas (297,863 dwt, built 2010, Universal Shipbuilding, Japan) under a spot index-related time charter for a period of approximately 12 months (+/- 30 days) commencing on September 9, 2010. Under the terms of the spot index-related time charter agreement, the minimum base rate received by the vessel will be the monthly average of the Baltic Dirty Tanker Route 3 (‘TD3’) (Middle Eastern Gulf – Japan) index, one of the main spot VLCC trading routes. The charter is also subject to a profit sharing arrangement, settled quarterly, allowing the Company to receive 50 percent of any additional revenues earned by the vessel in excess of the index related minimum base rate over the period of the actual voyage. With the employment of the M/T ‘Achilleas’ under this arrangement, four out of the Company’s five vessels are now trading under index-related time charter arrangements with Shell, which provide exposure to the tanker spot market, ensuring high fleet utilization and reflects the Company’s continued ability to leverage its network of relationships with oil majors. Equity Incentive Plan On August 31, 2010, the Company completed the allocation of its first management incentive award, in accordance with the terms of the Company’s 2010 Equity Incentive Plan dated March 1, 2010 (the “Equity Plan”). The award is comprehensive in its breadth and depth, with the Company having issued a total of 394,400 (or 2.5% of the Company’s stock as of September 30, 2010) of the 400,000 common shares approved for issuance by the Board, with the majority of issued shares vesting after 3 years from the date of issue. Awards were issued to all members of the Company’s Board and of its manager Capital Ship Management Corp., as well as to employees of key affiliates, all of whom play a significant role in the daily commercial and technical management of the Company’s vessels. For additional information regarding the Equity Plan please refer to the description included in the Company’s registration statement on Form F-1 dated March 11, 2010. Management Commentary: Mr. Evangelos Marinakis, the Company’s CEO commented: “Third quarter crude tanker rates were amongst the lowest the industry has experienced over the last 10 years. Nevertheless, our Board of Directors declared a $0.20 dividend per share, as our minimal leverage policy and efficient technical operations allow us to enjoy a low cash breakeven point and to pay substantial dividends even in a depressed market environment. Overall, we believe that the medium- to long-run industry fundamentals of the crude tanker market remain positive, as demand for crude oil and crude tankers has resumed a positive trajectory in 2010, which is expected to continue to grow into 2011. Having expanded our strategic partnership with Shell by employing two of our Suezmaxes and our two VLCCs under spot index related time charter agreements with a 50 percent profit share element on the actual trading of the vessels, we ensure that the Company will immediately benefit from any market upturn. This arrangement further aligns the Company’s revenues with the spot tanker market performance. We remain committed to our strategy of growing our fleet on an accretive basis and returning to our shareholders all our available cash generated by deploying our vessels in the spot market.” About Crude Carriers Corp. Crude Carriers Corp. (NYSE: CRU) is a Marshall Islands corporation, focusing on the maritime transportation of crude oil cargoes. The company owns a modern, high specification fleet of crude oil tankers, comprised of two VLCC and three Suezmax tankers. Four out of the five vessels are deployed under spot index-related time charter agreements with Shell Trading & Shipping Co.. Crude Carriers Corp. common shares trade on the New York Stock Exchange under the symbol "CRU". Crude Carriers Corp. |
Crude Carriers Corp. Reports Third Quarter Results and Announces Quarterly Cash Dividend of $0.20 Per Share