EMS: Revenue growth and improved profitability

15 Apr, 2010

Eitzen Maritime Services ASA (OSE: EMS) recorded EBITDA of USD 5.8 million in the first quarter, up from 4.6 million in the first quarter of 2009. Shipping markets are still weak and uncertain; however increased military sales ensure growth in revenue. Restructurings and cost reductions are beginning to provide results.

Eitzen Maritime Services posted sales of USD 131.9 million in the first quarter, an increase from last year of USD 11.8 million. The revenue growth is entirely attributable to the Ship Supply division, which increased sales by 16 per cent compared to last year's first quarter. The merchant fleet market has not yet recovered, and margins are still under pressure. The Ship Management division is scaled down and adjusted to reduced market activity. Restructuring costs were booked in 2009 and the division is profitable in first quarter. Group net result for the quarter ended at USD 0.8 million, down USD 0.1 million since last year.

"In the first quarter we started to see the results of restructuring initiatives taken in 2009 and the ongoing focus on cost reductions and operational efficiency. We are pleased to see revenue growth and improved margins," said CEO Annette Malm Justad.

The Ship Supply division delivered a strong sales growth of 16 percent compared to first quarter 2009, despite a weak shipping market and substantial reduction in the number of employees. In Europe, the staff is reduced a 20 per cent reduction. Year on year, costs to revenue ratio has improved, and total operating expenses were reduced by USD 4.1 million from previous quarter to USD 17.2 million in the first quarter this year.

The ship management division moved back to profitability in the first quarter, after considerable restructuring and adjustments throughout 2009. The division is now an all Asian operation, except for the crewing activities in the Baltics and Russia.

"The shipping crisis is not over, volumes and margins are still under pressure. Our position as the global industry leader and constant improvements of operational efficiency enable us to increase sales and improve profitability in all segments. Our staff has managed to keep focus on serving the market and reducing costs at the same time," Annette Malm Justad said.

Eitzen Maritime Services ASA