2010 Financial Results
Press Release 16 March 2011
HELLENIC CARRIERS REPORTS FINAL RESULTS
FOR THE YEAR ENDED 31 DECEMBER 2010
Hellenic Carriers Limited, (“Hellenic” or the “Company”) (AIM: HCL), an international provider of marine
transportation services, which owns and operates through its wholly owned subsidiaries a fleet of five dry
bulk vessels that transport iron ore, grain, steel products and minor bulk cargoes, is pleased to report today
its Final Results for the year ended 31 December 2010.
The Company’s management will be holding a conference call and webcast today 16 March 2011, at 2pm
(London), 4pm (Athens) and 10am (EDT) to discuss the results.
2010 FINANCIAL
• US$57.5 million Revenue (2009: US$58.0 million)
• US$38.4 million EBITDA1 (2009: US$38.9 million)
• Book gain of US$8.5 million and debt repayment of US$21.0 million following the sale of M/V
Hellenic Breeze
• US$32.9 million Operating Profit (2009: US$23.9 million)
• US$27.5 million Net Income (2009: US$18.1 million)
• Earnings per share of US$0.60 (2009: US$0.40)
• Dividend payments: Interim dividend for 2010 2.15 pence per share and final dividend for 2010
5.45 pence per share subject to AGM’s approval (2009: total dividend 2.47 pence per share)
• Gearing ratio2 at 26.5% as of 31 December 2010 (39.4% as of 31 December 2009)
• Payment of first two instalments in the amount of US$27.2 million for the construction of two new
building Kamsarmax vessels
• Total unencumbered cash liquidity of US$59.0 million as of 31 December 2010 (US$71.2 million as
of 31 December 2009)
2010 OPERATIONAL
• Operation of a fleet of 5.6 vessels on average compared to 6.0 vessels in 2009
• Sale of the 1993 built Panamax M/V Hellenic Breeze at a gross contract price of US$23.5 million
• Signing of shipbuilding contracts with Zhejiang Ouhua Shipbuilding Co Ltd for two Kamsarmax
vessels to be delivered in Q1 2013 at US$34.2 million each
• Time Charter Equivalent rate of US$26,089 (2009: US$25,910) outperforming the average 2010
Panamax and Supramax average TC earnings (US$25,041 and US$22,456 respectively) 3
• Daily average operating expenses of US$4,934 (2009: US$4,799)
Management Commentary
‘’During the year we continued to employ our vessels primarily under medium to long term charters generating healthy cash flows, to strengthen our balance sheet and to reinforce our liquidity. This strategy, which we have persistently followed during the last three years, has allowed us not only to face challenging market conditions, to reward our shareholders through our dividend payments, but also to initiate our fleet renewal and expansion programme.
‘’Since early 2010 the market conditions placed a significant premium on second hand vessels, relative to the value of new buildings. We took advantage of this opportunity by selling in May 2010 a 17-year old Panamax dry bulk carrier at a price of US$23.5 million, out of which US$21.0 million was used towards debt repayment. We then placed orders for the construction of two Kamsarmax new-building vessels at US$34.2 million each. Through the order of these vessels, which will be delivered in the Q1 2013, we shall expand our presence in the Panamax / Kamsarmax sector which has performed strongly and shown resilience during times of depressed freight earnings.
‘’Volatility has been present in the dry bulk market, however since Q4 2010 the downward pressure has been more intense, while the pace of deliveries of new-buildings, which had been ordered during the boom years, has accelerated. Since the pace of new building deliveries in 2011 will not subside, we believe the freight market will be affected and remain cautious for the short to medium term. However, we are positive for the long term, since demand from the developing economies is and will remain strong whilst at the same time the mature economies are slowly but steadily stepping out of recession and returning to growth. ‘’We believe that although in the short term the current pressure in the freight market will affect earnings and profitability, in the longer term it will probably help the prospects of dry bulk shipping. We also believe that this pressure may create real opportunities on the acquisition front of modern, primarily second hand, vessels. As evidenced in our balance sheet, our Company is well positioned not only to face market challenges for the coming year but also to take advantage of acquisition opportunities maximizing long term value for our shareholders.’’
Fleet Developments
In May 2010 the 1993 built Panamax Hellenic Breeze was sold at a contract price of US$23.5 million to an unaffiliated third party. With this sale, the Company initiated its fleet renewal program through the disposal of an older vessel, which had been purchased at US$21.0 million in 2006.
In the end of June 2010 two newly formed subsidiaries of Hellenic entered into shipbuilding contracts with Zhejiang Ouhua Shipbuilding Co. Ltd., for the construction of two Kamsarmax vessels. Each of the vessels will cost US$34.2 million in total (contract price US$34.0 million each plus US$0.2 million in respect of additions to the initial specification).
The new building vessels are scheduled for delivery in January and March 2013 respectively. An advance payment in the amount of US$20.4 million representing 30% of the contract price for both vessels was made in July 2010 and a second payment of US$6.8 million representing 10% of the contract price for both vessels was effected in October 2010. The remaining 60% of the price is payable upon delivery of the vessels.
In July 2010, the M/V Hellenic Sea sustained hull damage after running aground whilst navigating through the Amazon River in laden condition. A specialist salvage team was appointed to re-float the vessel and assist in the laden voyage towards the discharging port. Following transshipment operations of part of the cargo, the vessel was successfully re-floated on 14 August 2010 and proceeded to her destination to discharge the remaining cargo on board. Temporary repairs were carried out at the discharge port, following which the ship sailed to a repair yard for permanent repairs. Such repairs were concluded on 17 November 2010 together with the vessel’s special survey. The vessel remained off-hire for an aggregate period of 136 days and was redelivered to her charterers on 5 December 2010 to resume service under her time charter agreement. The shipowning company, through its insurance policy, is covered for the cost of the repairs, the cost of salvage and related expenses (excluding loss of hire) above the applicable deductible (US$125,000).
During the year ended 31 December 2010 three of the vessels completed their special surveys at a total cost of US$2.2 million which has been capitalised. No further scheduled surveys are planned for 2011 in respect of the existing fleet.
Full report at www.hellenic-carriers.com
About Hellenic Carriers Limited
Hellenic Carriers Limited manages through Hellenic Shipmanagement Corp. a fleet of dry bulk vessels that transport iron ore, coal, grain, steel products, cement, alumina, and other dry bulk cargoes worldwide. The fleet consists of five vessels, comprising three Panamaxes, one Supramax and one Handymax with an aggregate carrying capacity of 303,141 dwt plus two new building vessels currently on order, both Kamsarmaxes with an aggregate carrying capacity of about 164,000 dwt.
Following the delivery of the two Kamsarmax vessels, the Company will manage through Hellenic Shipmanagement Corp. a fleet of seven dry bulk carriers comprising two Kamsarmaxes, three Panamaxes, one Supramax and one Handymax with an aggregate carrying capacity of about 467,141 dwt and a weighted average age of 12.5 years (as of 31 March 2013).
Hellenic Carriers is listed on the AIM of the London Stock Exchange under ticker HCL.
1 EBITDA has been calculated as follows: Operating profit + Depreciation + Depreciation of dry-docking costs - Gain on sale of vessel - Other operating income
2 Gearing ratio is defined as Net Debt to total capitalization (debt, net of deferred financing fees less cash and cash equivalents to net debt and stockholders’ equity)
3 Sourcce : Howe Robinson
Hellenic Carriers Limited press release