HELLENIC CARRIERS LIMITED Hellenic Carriers Limited, ('Hellenic' or the 'Company') (AIM: HCL), an international provider of marine transportation services, which operates through its subsidiaries a fleet of five dry bulk vessels that transport iron ore, grain, steel products and minor bulk cargoes, reports today its Interim Unaudited Results for the six months ended 30 June 2015.
Revenue: US$ 6.7 million (H1 2014: US$ 10.4 million)
EBITDA1: US$ 2.0 million negative (H1 2014: US$ 0.8 million positive)
Operating loss before non-cash loss on sale of vessel: US$ 6.7 million (H1 2014: US$ 3.4 million)
Net loss before book loss on sale of vessel: US$ 8.5 million (H1 2014: US$ 5.3 million)
Book loss on sale of vessel: US$ 4.0 million (H1 2014: US$ nil)
Gearing ratio2 at 74.0% as of 30 June 2015 (67.1% as of 31 December 2014)
1 EBITDA has been calculated as follows: Operating loss + Depreciation + Depreciation of dry-docking costs + Impairment charge - Gain/(loss) on sale of vessels - Other operating income
2 Gearing ratio is defined as Net Debt to total capitalisation (debt, net of deferred financing fees less cash and cash equivalents including restricted cash to net debt and stockholders' equity)
Sale of the older and smaller vessel of the fleet (M/V Hellenic Horizon - 44,809 dwt - 1995 built), reducing the average age of the fleet to 9.6 years as of 30 June 2015 (10.9 years as of 31 December 2014)
Outperforming the Panamax Average of 4/TC routes and Supramax Average of 6/TC routes: The TCE- gross rate of US$ 8,164 outperformed both the Panamax Average of US$ 4,999 and Supramax Average of US$ 6,598 for H1 2015
Improving efficiency of operations: 7% reduction in daily vessel operating expenses (US$ 4,807 from US$ 5,205 in H1 2014)
Market CommentaryThroughout the first half of 2015, the dry bulk sector has remained depressed. The BDI dropped to a historical low of 509 points in February, and the index averaged at 623 points during H1 2015, which was the lowest semi- annual average in the history of the Baltic index since it was first published in 1985. Dry bulk earnings have come under significant pressure with Panamax and Supramax average earnings down by approximately 35 - 40% year- on-year, and ship values are in general following this downward trend and are currently below the historic 20 year average values.
Whilst overcapacity remains a concern for the remainder of this year and 2016, we note that during H1 2015 new building contracting was down 82% year-on-year, whilst scrapping increased 157% compared to H1 2014, and projections indicate the lowest fleet growth in over a decade.
Although demand growth has remained weak during H1 2015, seaborne dry bulk cargo volumes are usually seasonal in nature with the end of the year usually becoming more robust. Going forward, should fleet supply continue to grow at the current restricted levels, and demand for raw materials continue both from the developing economies as well as the mature economies, demand may outpace supply resulting in a slow and steady improvement, paving the way for a market recovery from 2017 onwards.
For the six months ended 30 June 2015, the Company operated through its subsidiaries an average fleet of 5.5 vessels compared to 5.7 vessels for the six months ended 30 June 2014. Following the sale of M/V Hellenic Horizon in March 2015, the operating fleet in H1 2015 includes one Panamax, two Supramax and two Kamsarmax vessels with an aggregate carrying capacity of 340,055 dwt and a weighted average age of 9.6 years as of 30 June 2015.
Fleet details as on the date of the announcement:
Fleet | ||||
Vessel | Type | Yard | Year Built | Carrying Capacity (dwt) |
M/V Hellenic Wind | Panamax | Tsuneishi Shipbuilding Corporation, Japan | 1997 | 73,981 |
M/V Konstantinos D | Supramax | Mitsui Engineering & Shipbuilding, Japan | 2000 | 50,326 |
M/V Odysseas I | Kamsarmax | Zhejiang Ouhua Shipbuilding Co. Ltd., China | 2013 | 81,662 |
M/V Konstantinos II | Kamsarmax | Zhejiang Ouhua Shipbuilding Co. Ltd., China | 2013 | 81,698 |
M/V Pistis | Supramax | Tsuneishi Shipbuilding Corporation, Japan | 2004 | 52,388 |
Total Operating Fleet: 5 Vessels | 340,055 | |||
As of 30 June 2015, total bank debt (divided into three facilities) was reported at US$ 95.3 million compared to US$ 96.6 million at 31 December 2014. During 2015 and until the date of this announcement, two out of the three facilities have been rescheduled in order to reduce principal payments and extend their maturity, while the third facility's rescheduling is expected to be finalized during Q4 2015. Principal payments during H1 2015 amounted to US$ 1.3 million and a further US$ 0.5 million is scheduled to be paid during H2 2015. The Company's loan facilities mature in August 2019, May 2020 and May 2026.
During H1 2015 the performance of the dry bulk freight market further deteriorated with rates approaching 30- year lows as a result of factors such as: the reduction of coal shipments into China and Europe, the ban on Indonesian exports of minor metal ores, the disruption in grain shipments out of South America (and in particular Argentina) and lower port congestion combined with the continued supply of new tonnage entering the market.
During this period the Company decided against locking in the vessels for the long term and focused on actively trading in the spot market and under short term period fixtures, thus being able to take full advantage of pockets of opportunities presented due to the freight market volatility. The H1 2015 Time Charter Equivalent-gross rate
amounting to US$ 8,164 outperformed the Panamax Average of 4 T/C Routes (US$ 4,999) and the Supramax Average of 6 T/C Routes (US$ 6,598) for the same period.
For the six months ended 30 June 2015, Hellenic reported total revenues of US$ 6.7 million compared to US$ 10.4 million for the same period of 2014. The fleet utilisation during the period was reported at 93.5% compared to 95.3% in H1 2014. The decrease in revenues is mainly attributed to the lower dry bulk freight rates during H1 2015 compared to H1 2014.
During H1 2015 the Company, through its subsidiaries, operated an average of 5.5 vessels compared to 5.7 vessels in H1 2014 and earned on average gross earnings (TCE-gross) of US$ 8,164 per day compared to US$ 10,914 per day in H1 2014, a decrease of 25.2%. Due to a US$ 0.9 million loss on bunkers purchased at higher prices during 2014 and sold at lower prices upon vessels employment to new charters/trips in 2015 (included in voyage expenses), TCE-net for H1 2015 fell to US$ 4,963 per day compared to US$ 8,596 per day for H1 2014, a decrease of 42.3%. Excluding the aforementioned loss on bunker prices, TCE-net for H1 2015 amounts to US$ 6,064 per day, a decrease of 30.0% from H1 2014 (US$ 8,657).
Vessel operating expenses during H1 2015 fell to a total of US$ 4.8 million from a total of US$ 5.6 million in H1 2014, marking a decrease of 15.3%. Average daily vessel operating expenses (OPEX) during H1 2015 were reduced to US$ 4,807 compared to US$ 5,205 incurred in H1 2014, demonstrating management's commitment on improving operational efficiency. The analysis of the main categories of OPEX as a percentage of total OPEX during H1 2015 and H1 2014 is presented below:
H1 2015 | H1 2014 | |
Crew expenses | 64% | 61% |
Insurance | 12% | 10% |
Repairs and spares | 7% | 10% |
Lubricants | 8% | 9% |
Stores | 7% | 8% |
Other | 2% | 2% |
On 26 March 2015, Arkadia Maritime Corp., owner of the 1995-built, 44,809 dwt Handymax vessel Hellenic Horizon, completed the sale of the vessel to an unaffiliated third party for a total cash consideration of US$ 3.8 million. As of the delivery date the vessel had a carrying value of US$ 6.9 million inclusive of the unamortised balance of her latest dry-docking. The non-cash loss resulting from the sale of the vessel, after deducting all expenses directly related to the sale was US$ 4.0 million.
The operating loss amounted to US$ 10.7 million for H1 2015 compared to an operating loss of US$ 3.4 million for the same period of 2014. Excluding the non-cash loss on sale of vessel of US$ 4.0 million, the operating loss for H1 2015 amounts to US$ 6.7 million.
The net loss for H1 2015 amounted to US$ 12.5 million representing a loss per share of US$ 0.27 calculated on 45,616,851 weighted average number of shares, whereas, the net loss for H1 2014 amounted to US$ 5.3 million, representing a US$ 0.12 loss per share. Excluding the non-cash loss on sale of vessel of US$ 4.0 million, the net loss for H1 2015 amounts to US$ 8.5 million, representing a US$ 0.19 loss per share.
Earnings before Tax, Interest, Depreciation and Amortisation (EBITDA) was reported at US$ 2.0 million (negative) for the six months ended 30 June 2015 compared to US$ 0.8 million (positive) for the same period of 2014.
(US$ in 000's except per share data) | 30.06.2015 | 30.06.2014 |
Revenue | 6,749 | 10,390 |
EBITDA (1) | (1,967) | 830 |
Operating loss | (10,723) | (3,391) |
Net Loss | (12,514) | (5,312) |
Weighted average shares (basic & diluted) | 45,616,851 | 45,616,851 |
Loss per share (basic & diluted) | (0.27) | (0.12) |
(US$ in 000's except per share data) | 30.06.2015 | 31.12.2014 |
Total assets | 129,207 | 143,701 |
Long-term debt, net of unamortised arrangement fees | 95,336 | 96,584 |
Total equity | 31,383 | 43,897 |
(US$ in 000's except per share data) | 30.06.2015 | 30.06.2014 |
Cash flows (used in)/ provided by operating activities | (487) | 1,869 |
Cash flows provided by/ (used in) investing activities | 2,812 | (15,694) |
Cash flows (used in)/ provided by financing activities | (6,216) | 4,286 |
(1) EBITDA has been calculated as follows: Operating loss + Depreciation + Depreciation of dry-docking costs + Impairment charge - Gain/(loss) on sale of vessel - Other operating income
H1 2015 | H1 2014 | |
Fleet data: | ||
Average number of operating vessels | 5.5 | 5.7 |
Number of operating vessels at period end | 5.0 | 6.0 |
Total dwt at period end | 340,055 | 384,864 |
Ownership days (1) | 990 | 1,080 |
Available days (2) | 834 | 952 |
Operating days (3) | 780 | 907 |
Fleet utilisation (4) | 93.5% | 95.3% |
Average daily results (in US$): | ||
TCE rate - Gross (5) | 8,164 | 10,914 |
TCE rate - Net (6) | 4,963 | 8,596 |
Average daily vessel operating expenses (7) | 4,807 | 5,205 |
Ownership days are the cumulative days in a period during which each vessel is owned by the respective vessel owning company.
Available days are ownership days less the days that the vessels are at scheduled off-hire for maintenance or vessel repositioning.
Operating days are the available days less all unforeseen off-hires.
Fleet utilisation is measured by dividing the vessels' operating days by the vessels' available days.
Time Charter Equivalent (TCE)-Gross is defined as vessels' total revenues divided by the number of the available days for the period.
TCE-Net is defined as vessels' total revenues less voyage expenses divided by the number of the available days for the period.
Average daily vessel operating expenses is defined as vessel operating expenses divided by ownership days.
As at 30 June 2015 debt amounted to US$ 95.3 million compared to US$ 96.6 million as of 31 December 2014.
As of 30 June 2015, debt (debt, net of deferred financing fees) to total capitalisation (debt and stockholders' equity) amounted to 75.2% compared to 68.8% as of 31 December 2014. Net debt (debt less cash and cash equivalents) to total capitalisation amounted to 74.0% on 30 June 2015 compared to 67.1% on 31 December 2014.
Total cash, including restricted cash amounted to US$ 6.2 million as of 30 June 2015 and US$ 7.0 million as of 31 December 2014. Restricted cash as of 30 June 2015 amounted to US$ 3.7 million, increased from US$ 0.6 million reported on 31 December 2014 mainly due to the proceeds from the sale of M/V Hellenic Horizon pledged in favour of the lender and will be used for the payment of scheduled principal instalments and interest.
DividendIn order to reinforce the Company's liquidity, the Directors of the Company did not recommend payment of an interim dividend.
For further information please contact: Hellenic Carriers LimitedFotini Karamanli, Chief Executive Officer Alkis Papadopoulos, Chief Financial Officer
E-mail: info@hellenic-carriers.com +30 210 455 8900
Nominated Adviser & Broker
Mark Taylor +44 (0) 207 886 2500
James Greenwood
Nicolas Bornozis +1 212 661 7566 (New York)
Maria Chercheletzi +44 (0) 20 3206 1320 (London) E-mail: helleniccarriers@capitallink.com
A copy of this announcement will be available on the Company's website www.hellenic-carriers.com
Hellenic Carriers Limited operates through its subsidiaries 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 one Panamax, two Supramax and two Kamsarmax vessels with an aggregate carrying capacity of 340,055 dwt and a weighted average age of 9.9 years.
Hellenic Carriers is listed on the AIM of the London Stock Exchange under ticker HCL.
INTERIM CONSOLIDATED INCOME STATEMENT For the six months ended 30 June 2015 (Amounts expressed in thousands of U.S. Dollars, except share and per share data)30 June | |||
2015 | 2014 | ||
Unaudited | Unaudited | ||
US$'000 | US$'000 | ||
Revenue | 6,749 | 10,390 | |
Expenses and other income | |||
Voyage expenses | (2,602) | (2,102) | |
Voyage expenses - related parties | (67) | (104) | |
Vessel operating expenses | (4,759) | (5,621) | |
Management fees - related parties | (990) | (1.080) | |
Depreciation | (4,184) | (4,730) | |
Depreciation of dry-docking costs | (555) | (677) | |
Loss on sale of vessels | (4,040) | - | |
General and administrative expenses | (298) | (653) | |
Other operating income | 23 | 1,186 | |
Operating loss | (10,723) | (3,391) | |
Finance expense | (1,852) | (1,916) | |
Finance income | 1 | 9 | |
Foreign currency gain/ (loss), net | 60 | (14) | |
(1,791) | (1,921) | ||
Loss for the period | (12,514) | (5,312) | |
Loss per share (US$): | |||
Basic and diluted LPS for the period | (0.27) | (0.12) | |
Weighted average number of shares | 45,616,851 | 45,616,851 | |
30 June | |||
2015 | 2014 | ||
Unaudited | Unaudited | ||
US$'000 | US$'000 | ||
Loss for the period | (12,514) | (5,312) | |
Other comprehensive income | - | - | |
Total comprehensive loss for the period | (12,514) | (5,312) | |
30 June | 31 December | ||
2015 | 2014 | ||
Unaudited | Audited | ||
US$'000 | US$'000 | ||
ASSETS | |||
Non-current assets | |||
Vessels, net | 116,879 | 128,469 | |
Restricted cash | 1,083 | 200 | |
117,962 | 128,669 | ||
Current assets | |||
Inventories | 503 | 770 | |
Trade receivables, net | 1,546 | 2,831 | |
Claims receivable | 230 | 643 | |
Available for sale equity investments, net of impairment | - | - | |
Due from related parties | 2,996 | 3,618 | |
Prepaid expenses and other assets | 811 | 348 | |
Restricted cash | 2,659 | 431 | |
Cash and cash equivalents | 2,500 | 6,391 | |
11,245 | 15,032 | ||
TOTAL ASSETS | 129,207 | 143,701 | |
EQUITY AND LIABILITIES | |||
Shareholders' equity | |||
Issued share capital | 46 | 46 | |
Share premium | 54,355 | 54,355 | |
Capital contributions | 10,826 | 10,826 | |
Accumulated deficit | (33,844) | (21,330) | |
Total equity | 31,383 | 43,897 | |
Non-current liabilities | |||
Long-term debt | 91,847 | 93,325 | |
91,847 | 93,325 | ||
Current liabilities | |||
Trade payables | 1,075 | 1,713 | |
Current portion of long-term debt | 3,489 | 3,259 | |
Accrued liabilities and other payables | 1,293 | 1,397 | |
Deferred revenue | 120 | 110 | |
5,977 | 6,479 | ||
Total Liabilities | 97,824 | 99,804 | |
TOTAL EQUITY AND LIABILITIES | 129,207 | 143,701 | |
Number of shares | Par value US$ | Issued share capital US$'000 | Share premium US$'000 | Capital Contributions US$'000 | Accumulated deficit US$'000 | Total equity US$'000 | |
As at 1 January 2014 | 45,616,851 | 0.001 | 46 | 54,355 | 10,826 | (4,350) | 60,877 |
Loss for the period | - | - | - | - | - | (5,312) | (5,312) |
Other comprehensive income | - | - | - | - | - | - | - |
Total comprehensive loss | - | - | - | - | - | (5,312) | (5,312) |
As at 30 June 2014 | 45,616,851 | 0.001 | 46 | 54,355 | 10,826 | (9,662) | 55,565 |
As at 1 January 2015 | 45,616,851 | 0.001 | 46 | 54,355 | 10,826 | (21,330) | 43,897 |
Loss for the period | - | - | - | - | - | (12,514) | (12,514) |
Other comprehensive income | - | - | - | - | - | - | - |
Total comprehensive loss | - | - | - | - | - | (12,514) | (12,514) |
As at 30 June 2015 | 45,616,851 | 0.001 | 46 | 54,355 | 10,826 | (33,844) | 31,383 |
.
30 June | |||
2015 | 2014 | ||
Unaudited | Unaudited | ||
US$'000 | US$'000 | ||
Operating activities | |||
Loss for the period | (12,514) | (5,312) | |
Adjustments to reconcile loss to net cash flows: | |||
Depreciation | 4,184 | 4,730 | |
Depreciation of dry-docking costs | 555 | 677 | |
Loss on sale of vessels | 4,040 | - | |
Finance expense | 1,852 | 1,916 | |
Finance income | (1) | (9) | |
(1,884) | 2,002 | ||
Decrease/ (Increase) in inventories | 267 | (849) | |
Decrease/ (Increase) in trade receivables, claims receivable, prepaid expenses and other assets | 1,235 | (596) | |
Decrease in due from related parties | 622 | 80 | |
(Decrease)/ Increase in trade payables, accrued liabilities and other payables | (737) | 1,302 | |
Increase/ (Decrease) in deferred revenue | 10 | (70) | |
Net cash flows (used in)/ provided by operating activities | (487) | 1,869 | |
Investing activities | |||
Acquisition/ improvement of vessels | (77) | (15,241) | |
Proceeds from sale of vessels | 2,888 | - | |
Dry-docking costs | - | (464) | |
Interest received | 1 | 11 | |
Net cash flows provided by/ (used in) investing activities | 2,812 | (15,694) | |
Financing activities | |||
Proceeds from issue of long-term debt | - | 2,500 | |
Repayment of long-term debt | (1,305) | (1,720) | |
Restricted cash | (3,111) | 5,492 | |
Finance expenses paid | (1,800) | (1,986) | |
Net cash flows (used in)/ provided by financing activities | (6,216) | 4,286 | |
Net decrease in cash and cash equivalents | (3,891) | (9,539) | |
Cash and cash equivalents at 1 January | 6,391 | 18,179 | |
Cash and cash equivalents at 30 June | 2,500 | 8,640 | |
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