Globus Maritime Limited Reports Financial Results for the Fourth Quarter and Year Ended December 31, 2009
Athens, Greece, March 9, 2010. Globus Maritime Limited ("Globus" or the “Company"), (AIM: GLBS),
a shipping company specializing in the transportation of dry bulk cargoes worldwide, announces today
its Unaudited Operating and Financial results for the Fourth Quarter (“Q4-09”) and Fiscal Year ended
December 31, 2009.
During 2009, the Company sold three vessels, all built in the mid-1990s, to unaffiliated third parties: the Panamax vessel “Island Globe” and the Handymax vessels “Gulf Globe” and “Lake Globe”. These sales generated total cash proceeds of US$49.0 million (after accounting for commissions and other related expenses) and enabled the Company to reduce bank debt and enhance its liquidity. Globus is now in a favorable position to take advantage of accretive fleet expansion opportunities as these may occur, and grow the fleet with younger and modern vessels.
As a result of the reduction in the size of the fleet:
• Gross Revenues were US$52.8 million in 2009 versus US$98.6 million in 2008;
• Net Revenues were US$49.1 million in 2009 versus US$91.9 million in 2008;
• EBITDA of US$4.7 million in 2009 versus US$69.2 million in 2008;
• Net Income of US$19.0 million, after adjusting for the following items: (1) a non-cash impairment charge of US$28.4 million, (2) a loss on the sale of vessels of US$0.8 million, and (3) a non-cash unrealized gain on derivative financial instruments of US$0.1 million. Not adjusting for these items the Company recorded a Net Loss of US$10.1 million, versus Net Income of US$42.8 million in 2008;
• Loss per share basic and diluted of US$0.35 calculated on 28,769,477 weighted-average number of shares for the full year ended December 31, 2009, compared to basic earnings per share of US$1.495 and diluted earnings per share of US$1.481 on 28,650,255 and 28,907,066 respectively for the full year of 2008;
• Net Cash from Operations of US$34.7 in 2009 million versus US$73.2 million in 2008;
• Cash Balances of US$59.2 million in 2009 versus US$65.3 million in 2008;
• An average of 6.3 vessels were owned and operated during the twelve months of 2009, earning an average Time Charter Equivalent (TCE) rate of US$21,550 per day, versus an average of 7.9 vessels owned and operated during 2008, earning an average TCE rate of US$32,736 per day;
• Fleet utilization was 98.6% in 2009 versus 99.0% in 2008.
Fourth Quarter 2009 Financial Highlights versus Fourth Quarter 2008
During the fourth quarter of 2009 the Company delivered to its new owners the vessels “Gulf Globe” and “Lake Globe” generating net cash proceeds of US$31.4 million. Furthermore, in November 2009 the Company agreed the sale of two mid-1990s built vessels, the “Sea Globe” and the “Coral Globe” for a selling price of US$34.0 million en block. Both vessels were delivered to their new owners in February 2010 generating net cash proceeds of US$33.0 million.
• Gross Revenues of US$11.3 million versus US$17.5 million;
• Net Revenues of US$10.2 million versus US$15.2 million;
• An average of 4.7 vessels were owned and operated during Q4-09 earning an average TCE rate of US$23,546 per day, versus an average of 7.5 vessels owned and operated during Q4- 08, earning an average TCE rate of US$22,672 per day;
• Operating Expenses of US$1.9 million versus US$2.9 million;
• EBITDA of US$1.0 million versus US$5.2 million;
• Net Income of US$4.7 million which excludes (1) a US$0.1 million gain from the sale of vessels, (2) a US$0.1 million non-cash unrealized gain on derivative financial instruments and (3) a non-cash impairment charge on fixed assets (namely the “Sea Globe” and the “Coral Globe”) of US$6.1 million. Including these three items, the Company recorded a Net Loss of US$1.2 million.
Dividend
Based on these Results, the Directors do not recommend a dividend for the fiscal year 2009. The elimination of the dividend for the year 2009 reinforces the Company’s liquidity and is a further step towards optimizing the use of the Company’s cash by growing the fleet.
Management Commentary
Commenting on the Results, George Karageorgiou, Chief Executive Officer of Globus Maritime Limited, said:
"We are pleased to report that the Company is in a strong financial condition and managed to overcome the difficulties of the 2009 financial year. It was a challenging year as we weathered an economic recession and the liquidity crunch, which had begun in the last quarter of 2008. The decline in demand for bulk carriers, coupled with the significant newbuilding orderbook did not leave much space for market optimism.
"We are happy to report that, after adjusting for non-cash items, our net income for 2009 was $19.0 million. We consider this a solid performance, produced against a backdrop of weaker charter rates and the global economic turmoil during the reporting year.
“For dry bulk shipping, the balance between supply and demand is decisive. It is our view that the actual deliveries of newbuilding dry bulk vessels in 2010 and 2011 will not be easily offset and absorbed by the growth in demand, although demand is expected to be stronger than in the recent period. In this context we have taken proactive initiatives and measures to optimize our fleet composition so that Globus is able to weather the current storm and come out of this turmoil even stronger.
“We sold our ’older’ vessels, all built in the mid-1990s, which enabled us to reduce bank debt and enhance our cash position. As a result we are now in a position to take advantage of accretive fleet expansion opportunities as these may occur, and renew our fleet at a fraction of the cost compared to 2008.
“We are confident that the market will present us with many attractive opportunities, given our strong balance sheet, and we will gradually seek to take advantage of these and grow the earnings capacity of Globus, and thus create value for our shareholders. In a year’s time our fleet will have a much younger age profile compared to the age profile at the time of the Company’s IPO in 2007.”
Elias Deftereos, Chief Financial Officer of Globus Maritime, added:
“We are pleased that, amid challenging market conditions, we generated steady cash flow. The Results of the Full Year 2009 reflect lower revenues compared to 2008 due to the smaller number of vessels in our fleet and the lower average time charter equivalent rate our vessels have achieved during the year. Our Results for the Fourth Quarter 2009 were also lower compared to the same period for 2008 for the same reasons.
“Our bottom line for 2009 was negatively affected by the losses on the sales of mid-1990s-built vessels, as we implemented measures to increase the Company's financial flexibility. However the total net proceeds of US$49.0 million improved our balance sheet and financial strength. “Early in 2009 a waiver was granted by one of our financing banks in respect of the minimum asset coverage covenants in our loan agreement, with effect until 2010. We also pledged an amount of cash in favour of our second financing bank ensuring that we would not be affected by the volatility in asset values. I am pleased to report that at the end of 2009 and on the date of this release, the Company is in compliance with the covenants. During 2009, we have reduced our debt by approximately $87.0 million. As of the date of this release, we are in a “net cash” position since our cash reserves have grown to US$67.8 million and exceed our bank debt which is US$43.6 million.”
Detailed report at: www.globusmaritime.gr
About Globus Maritime Limited
Globus is a global provider of seaborne transportation services for dry bulk cargoes, including among others iron ore, coal, grain, cement, and fertilizers, along worldwide shipping routes. Globus owns and operates one panamax and one supramax vessel, with a weighted average age of 7.7 years (as at January 31, 2010) and a total carrying capacity of 126,429 DWT. Both vessels are geared.
Globus is listed on the AIM of the London Stock Exchange under ticker GLBS. Jefferies International Limited is acting as nominated adviser and broker to the Company.
Globus Maritime Limited