q3 2010 report - sagatankers.no · saga tankers q3 2010 report > page 4 financing in total, usd...
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Q3 2010 REPORT Q3
SAGA TANKERS Q3 2010 REPORT > PAGE 2
CONTENTS FINANCIAL INFORMATION Highlights > Consolidated condensed statement of comprehensive income > Consolidated condensed statement of financial position > Consolidated cash flow statement > Consolidated statement of changes in equity > Notes to the financial statements >
SAGA TANKERS Q3 2010 REPORT > PAGE 3
■ SUCCESSFUL DRYDOCKING OF ALL 4 VESSELS
■ CHALLENGING MARKET FOR VLCCS
■ EBITDA OF USD (0.3) MILLION
■ NET PROFIT OF USD (5.2) MILLION
KEY FIGURES USD 1000 Q3 2010
(unaudited)
Gross freight revenue 11 421
Operating (TC) revenue 4 805
Operating profit before depreciation (EBITDA) -328
Operating profit (EBIT) -3 877
Net profit/-loss -5 167
Basic and diluted earnings per share (USD) -0,07
Cash and cash equivalents 27 442
RESULTS Saga Tankers ASA reports a net loss for the third quarter of 2010 of USD (5.2) million.
Gross freight revenues for the third quarter were USD 11.4 million.
Operating revenues for the third quarter were USD 4.8 million.
EBITDA for the third quarter was USD (0.3) million.
Net financial items for the third quarter were USD (1.3) million.
Earnings per share (EPS) for the third quarter were USD (0.07).
The average number of shares in the quarter was 78,888,559 shares. As per the end of the period, the outstanding number of shares was 78,888,559.
All of the Company’s vessels completed their special surveys (drydocking) during the third quarter. All special surveys were completed within budget. The Company expects limited CAPEX on the vessels going forward. The
Company had a total of 75 off-hire days in connection with the special surveys.
The Company’s vessels had a total of 293 trading days out of 368 possible in the third quarter. The Company’s spot trading vessels had a total of 231 trading days out of 276 days in the quarter. The number of trading days is calculated as the total number of days in the quarter less the number of days used for the special surveys.
Average TCE obtained on all four vessels was USD 16,395 per day in the quarter.
Average TCE for the three spot trading vessels was USD 11,969 per day in the quarter.
Average OPEX per vessel was USD 12,316 per day and reflects preparations for the special surveys conducted in the quarter.
The Company’s condensed financial statements for the third quarter of 2010 are enclosed.
HIGHLIGHTS
SAGA TANKERS Q3 2010 REPORT > PAGE 4
FINANCING In total, USD 136.85 million of the Term Loan Facility had been drawn for the acquisition of the four vessels in the second quarter. At third quarter end, the Company paid the first principal repayment under the Term Loan Facility of USD 4.1 million. The total amount of outstanding debt under the Term Loan Facility at quarter end was USD 132.7 million. MAIN EVENTS DURING THE QUARTER The freight market for large crude carriers experienced a challenging third quarter. With all vessels conducting special surveys, the Company had hoped to reduce its exposure to the poor market. However, despite waiting for improved market conditions, the poor world scale rates sustained throughout the whole quarter. VESSEL OPERATIONS All vessels have operated without any technical issues throughout the quarter.
Drydocking summary
Saga Chelsea entered drydock in China on 27 July. The vessel was off hire for 25 days in the quarter, and the total cost for the special survey was approximately USD 2.0 million.
Saga Unity entered the drydock in Dubai on 4 August. The vessel was off hire for 13 days in the quarter, and the total cost for the special survey was approximately USD 1.6 million.
Saga Agnes, who is on time charter to Bluelight, entered drydock at Keppel Shipyard on 17 August. The vessel was off hire for 30 days in the quarter, and the total cost for the special survey was approximately USD 1.9 million.
Songa Julie entered the drydock at Keppel Shipyard on 1 September. The vessel was off hire for 7 days in the quarter, and the total cost for the special survey was approximately USD 1.2 million.
MARKET The weak tanker market continued throughout the third quarter. The reasons seem to be a mix of factors
including weak US Oil import. The forward curve for oil has not encouraged any substantial floating storage of crude oil. As for the future, the Company believes the market for VLCC will recover. Large crude tankers will remain the most cost-efficient way to transport oil and the long term positive fundamentals are still intact. STATEMENT REGARDING FORWARD-LOOKING STATEMENTS Matters discussed in this report may constitute forward-looking statements. The forward-looking statements in this report are based upon various assumptions, many of which are based upon further assumptions, including without limitation, management's examination of historical operating trends, data contained in our records and other data available from third parties. Although we believe that these assumptions were reasonable when made, because these assumptions are inherently subject to significant uncertainties and contingencies which are difficult to predict and beyond our control, we cannot assure you that we will achieve or accomplish these expectations, beliefs or projections.
Oslo, 5. November 2010
The Board of Directors
Arne Blystad Einar J. Greve Brita Eilertsen Chairman Board Member Board Member
Jon Chr. Syvertsen CEO
SAGA TANKERS Q3 2010 REPORT > PAGE 6
CONSOLIDATED CONDENSED STATEMENT OF COMPREHENSIVE INCOME
USD 1000 Q3 2010
(unaudited) YTD 2010
(unaudited)
Gross freight revenues 11 421 24 999
Voyage related expenses 6 616 12 491
Operating TC revenues 4 805 12 509
Operating expenses vessels 4 302 6 436
General administrative expenses 831 1 617
Depreciation (Note 2) 3 549 5 014
Operating expenses 8 682 13 067
Operating profit -3 877 -558
Interest income 21 67
Interest expense 1 177 1 823
Other financial items -134 -67
Net financial items -1 290 -1 823
Profit/-loss before tax -5 167 -2 382
Taxes
Net profit/-loss -5 167 -2 382
Other comprehensive income - -
Total comprehensive income -5 167 -2 382
Basic and diluted earnings per share (USD) -0,07 -0,03
Average number of shares in the period 78 888 559 76 175 186
Number of shares outstanding at period end 78 888 559 78 888 559
SAGA TANKERS Q3 2010 REPORT > PAGE 7
CONSOLIDATED CONDENSED STATEMENT OF FINANCIAL POSITION
USD 1000 Q3 2010
(unaudited)
ASSETS
Non-current assets
Vessels and other assets (Note 2) 255 652
Total non-current assets 255 652
Current assets
Other Current assets 4 252
Cash and cash equivalents 27 442
Total Current assets 31 694
TOTAL ASSETS 287 345
EQUITY AND LIABILITIES
Equity
Share capital 13 301
Share premium 141 327
Retained earnings -2 382
Total equity 152 246
Non-current liabilities
Long-term interest-bearing debt 114 391
Net pension liabilities 117
Total non-current liabilities 114 509
Current liabilities
Current portion of long-term debt 16 422
Other current liabilities and accruals 4 169
Total current liabilities 20 591
TOTAL EQUITY AND LIABILITIES 287 345
SAGA TANKERS Q3 2010 REPORT > PAGE 8
CONSOLIDATED CASH FLOW STATEMENT
USD 1000 YTD Q3 2010
(unaudited)
Profit before tax -2 382
Tax -
Depreciation 5 014
Increase/decrease Inventories -2 853
Increase/decrease receivables and prepayments -
Increase/decrease payables and accruals 4 039
Pension liability 117
Increase/decrease other provisions 829
Net cashflow from operating activities 4 764
Investments in tangible fixed assets -224 665
Net cash flow used in investing activities -224 665
Proceeds from long term borrowings 136 850
Repayments of long term borrowings -4 106
Proceeds from issuance of shares 114 766
Repayments of equity -167
Net Cash flow from financing activities 247 343
Effects of exchange rate changes on cash -
Net change in cash and cash equivalents 27 442
Cash and cash equivalents
at beginning of incorporation -
Cash and cash equivalents
at end of period 27 442
SAGA TANKERS Q3 2010 REPORT > PAGE 9
USD 1000 (unaudited) Issued capital Share
premium Retained earnings Total
Day of incorporation (24 March 2010) 167 1 168
Capital reduction (6 May 2010) -167 -167
Share issue (6 May 2010) 9 965 104 632 114 597
Share issue (10 May & 15 June) 3 336 36 694 40 030
Net profit/-loss -2 382 -2 382
Other comprehensive income - -
Total comprehensive income -2 382 -2 382
Equity per ending balance 30 September 2010 13 301 141 327 -2 382 152 246
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
SAGA TANKERS Q3 2010 REPORT > PAGE 10
NOTE 1 – BASIS FOR PREPARATION
The Company's condensed interim financial statements have been prepared in accordance with IAS 34 Interim Financial Reporting as approved by the EU and requirements in the Norwegian Securities Trading Act. The accounting policies adopted in the preparation of the condensed interim financial statements are consistent with those presented in section 8 of the Company's IPO prospectus. The prospectus can be found on the Company's webpage (www.sagatankers.no). NOTE 2 – VESSELS AND OTHER FIXED ASSETS
USD 1000 (unaudited) Vessels Other fixed
assets Total
Acquisition cost, opening balance (24 March 2010) - - -
Acquisition of vessels 260 577 88 260 665
Acquisition cost, ending balance 30 September 2010 260 577 88 260 665
Accumulated depreciation, opening balance (24 March 2010 - -
Depreciation 5 008 6 5 014
Accumulated depreciation, ending balance 30 September 2010 5 008 6 5 014
Net carrying amount, ending balance 30 September 2010 255 569 82 255 652
NOTE 3 – OPERATING SEGMENTS
The Company operates one type of vessels, VLCCs. For management purposes, the Company's business is not organized into separate operating segments and hence only has one reportable operating segment which is in line with the consolidated figures presented in this report. Group financing is also monitored on a Group basis. NOTE 4 – 20 LARGEST INVESTORS
NAME 28.09.2010
1 BLYSTAD SHIPHOLDING 24,96 %
2 BANK OF NEW YORK MEL BNY GCM CLIENT ACCOU 6,34 %
3 FERD AS INVEST 6,25 %
4 JPMORGAN CLEARING CO A/C CLEARING ACCOUNT 5,36 %
5 HOLBERG NORGE V/HOLBERG FONDSFORVA 3,95 %
6 EUROCLEAR BANK S.A./ 25% CLIENTS 2,89 %
7 SKANDINAVISKA ENSKIL A/C FINNISH RESIDENT 2,49 %
8 GOLDMAN SACHS & CO - SECURITY CLIENT SEGR 2,36 %
9 KOMMUNAL LANDSPENSJO 2,14 %
10 JP MORGAN CLEARING C A/C CUSTOMER SAFE KE 2,11 %
11 SUNDT AS 1,79 %
12 DELPHI NORDEN JPMORGAN EUROPE LTD, 1,61 %
13 CANICA AS 1,53 %
14 STATOIL PENSJON C/O JP MORGAN CHASE 1,49 %
15 CLEARSTREAM BANKING CID DEPT, FRANKFURT 1,45 %
16 SHB STOCKHOLM CLIENT C/O HANDELSBANKEN AS 1,37 %
17 UBS AG, LONDON BRANC S/A IPB SEGREGATED C 1,34 %
18 BANK OF NEW YORK MEL TREATY ACCOUNT UNITE 1,32 %
19 TEIGEN OLE KETIL 1,27 %
20 TEIGEN FRODE 1,26 %
TOTAL 73,28 %
NOTES
SAGA TANKERS Q3 2010 REPORT > PAGE 11
NOTE 5 – EVENTS AFTER QUARTER END
The Company held an Extraordinary General Meeting on 21 October where the General Meeting approved to reduce the share premium fund and to transfer the reduced amount to Other Equity. The Company increases its flexibility of such a share premium fund reduction by increasing the Company’s ability to distribute dividend to its shareholders in the future. The share premium was subsequently reduced with NOK 838.039.937 from NOK 838.039.937 to NOK 0, - (zero), or with USD 141.327 from USD 141.327 to USD 0,- (zero). The reduced amount was transferred to Other Equity.
SAGA TANKERS Q3 2010 REPORT > PAGE 12
SAGA TANKERS ASA +47 23 11 82 70 P.O. Box 1468 Vika Norway
INVESTOR RELATIONS Phone: +47 23 11 82 74 e-mail: [email protected]
www.sagatankers.com