Dryships Inc. reports financial and operating results
for the first quarter 2013
May 22, 2013, Athens, Greece.
DryShips Inc. (NASDAQ: DRYS), or DryShips or the Company, an
international provider of marine transportation services for drybulk and petroleum cargoes, and
through its majority owned subsidiary, Ocean Rig UDW Inc., or Ocean Rig, of offshore deepwater
drilling services, today announced its unaudited financial and operating results for the first quarter
ended March 31, 2013.
First Quarter 2013 Financial Highlights
Included in the first quarter 2013 results are:
- Losses on the sale of four newbuilding drybulk vessels, of $75.3 million, or $0.20 per share. Excluding the above items, the Company’s net results would have amounted to a net loss of $41.3 million, or $0.10 per share. (1)
• The Company reported Adjusted EBITDA of $112.0 million for the first quarter of 2013, as compared to $104.1 million for the first quarter of 2012. (2) Recent Events
• In March 2013 and April 2013, the Company sold its newbuilding Capesize bulk carriers Hull 1241 and 1242, to an unaffiliated third party and its newbuilding Very Large Ore Carriers Hulls 1239 and 1240, to an entity related to Mr. George Economou. These four vessels had remaining yard installments of approximately $178 million against which the Company had no committed debt. Under the terms of the sale agreements, the Company will make payments of only $29 million, thus eliminating approximately $149 million in capital expenditures.
• On February 28, 2013, Ocean Rig signed definitive documentation for a $1.35 billion syndicated secured term loan facility to partially finance the construction costs of the newbuilding drillships Ocean Rig Mylos, Ocean Rig Skyros and Ocean Rig Athena, scheduled for delivery in August 2013, October 2013 and November 2013, respectively. The facility has a five-year term and a repayment profile of approximately 11 years and bears interest at LIBOR plus a margin.
• On February 14, 2013, the Company completed a public offering of an aggregate of 7,500,000 common shares of Ocean Rig owned by DryShips. The Company received approximately $123.1 million of net proceeds from the public offering.
George Economou, Chairman and Chief Executive Officer of the Company, commented:
"During the first quarter of 2013, we entered into agreements to sell four of our bulk carriers under construction in China. We did not have any bank financing in place for these vessels. Under the terms of the sale agreements, we will make payments of only $29 million, effectively eliminating $149 million in capital expenditures. We have now reduced our newbuilding program to six bulk carriers, two of which are scheduled for delivery in 2013, for which we have time charters and bank financing in place, and four of which are scheduled for delivery in 2014, for which we are considering our options.
Now that our unfunded capital expenditures have been reduced significantly, we are in discussions with our lenders to lower our debt service requirement. These developments are expected to reduce our cash outflow and lower our cash breakeven levels.
Even though there has been a recent spike in some drybulk charter rates, we continue to be defensive about the short-term prospects of the shipping markets. Asset prices seem to be holding up but we do not expect any positive sustainable development in charter rates this year.
We are a pure shipping company with spot market exposure and a shareholding in Ocean Rig. Ocean Rig’s capital and resources are completely separated from those of DryShips. We continue to be bullish about the prospects for Ocean Rig, whose contract backlog currently stands at approximately $4.9 billion over three years.”
Financial Review: 2013 First Quarter The Company recorded a net loss of $116.6 million, or $0.30 basic and diluted loss per share, for the three-month period ended March 31, 2013, as compared to a net loss of $47.5 million, or $0.12 basic and diluted earnings per share, for the three-month period ended March 31, 2012. Adjusted EBITDA was $112.0 million for the first quarter of 2013, as compared to $104.1 million for the same period in 2012.(3)
For the drybulk carrier segment, net voyage revenues (voyage revenues minus voyage expenses) amounted to $36.9 million for the three-month period ended March 31, 2013, as compared to $72.4 million for the three-month period ended March 31, 2012. For the tanker segment, net voyage revenues amounted to $10.8 million for the three-month period ended March 31, 2013, as compared to $7.2 million for the same period in 2012. For the offshore drilling segment, revenues from drilling contracts increased by $83.4 million to $246.4 million for the three-month period ended March 31, 2013, as compared to $163.0 million for the same period in 2012.
Total vessels’, drilling rigs’ and drillships’ operating expenses and total depreciation and amortization increased to $144.9 million and $82.7 million, respectively, for the three-month period ended March 31, 2013, from $106.9 million and $82.0 million, respectively, for the three-month period ended March 31, 2012. Total general and administrative expenses increased to $36.2 million in the first quarter of 2013, from $34.0 million during the comparative period in 2012. Interest and finance costs, net of interest income, amounted to $56.9 million for the three-month period ended March 31, 2013, compared to $50.8 million for the three-month period ended March 31, 2012.
(1) The net result is adjusted for the minority interests of 41% of Ocean Rig not owned by Dryships Inc. common shareholders as of March 31, 2013.
(2) Adjusted EBITDA is a non-GAAP measure; please see later in this press release for reconciliation to net income.
(3) Adjusted EBITDA is a non-GAAP measure; please see later in this press release for a reconciliation to net income.
Full report at: www.dryships.com
About DryShips Inc.
DryShips Inc. is an owner of drybulk carriers and tankers that operate worldwide. Through its majority owned subsidiary, Ocean Rig UDW Inc., DryShips owns and operates 10 offshore ultra deepwater drilling units, comprising of 2 ultra deepwater semisubmersible drilling rigs and 8 ultra deepwater drillships, 3 of which are scheduled to be delivered to Ocean Rig during 2013 and 1 of which is scheduled to be delivered during 2015. DryShips owns a fleet of 42 drybulk carriers (including newbuildings), comprising 10 Capesize, 28 Panamax, 2 Supramax and 2 newbuilding Very Large Ore Carriers (VLOC) with a combined deadweight tonnage of approximately 4.4 million tons, and 10 tankers, comprising 4 Suezmax and 6 Aframax, with a combined deadweight tonnage of over 1.3 million tons.
DryShips’ common stock is listed on the NASDAQ Global Select Market where it trades under the symbol “DRYS.”
Visit the Company’s website at www.dryships.com
DryShips Inc. press release