Greek Shipping News Cuts
Week 46 - 2008
---The European Commission (EU) is set to review its August decision to withdraw European Union recognition of Greek classification society, the Hellenic Register of Shipping (HRS), and is ready to easy its stance towards Greece and the application of regulations covering territorial sea transportation.
Great progress has been made regarding the standing of the Greek classification society and it is hoped recognition will be restorted by the end of 2008. The Greek shipping community was rocked by the EU's decision to withdraw its recognition from the HRS, claiming "the necessary conditions for extension or renewal of the limited recognition of HRS were at present not met".
A series of rigorous inspections by Marine, Aegean and Islands Policy ministry (YENANP) officials of HRS' technical ability and its procedures have since been carried out and successfully passed. This was one of the key conditions imposed by the European Commission (EC) before it would itself re-consider its decision. Withdrawal of EC recognition caused great anxiety at the ministry and within the local shipping community, especially among ferry and tourist boat operators. Some 85 coastal passenger ships are under HRS class and hundreds of pleasure boats.
Following the inspections by the ministry's department of regulations and supervision the matter now goes to the European Maritime Safety Agency (Emsa) which will also carry out an inspection. It's believed this will also be successful and the HRS status will be dealt with by the EU before the end of the year.
Status of the HRS and coastal shipping were on the agenda when European Commission vp and Transport commissioner, Antoino Tajani met Marine minister Anastasis Papaligouras, November 7, in Piraeus.
The Greek government has frequently vowed to give "full and unreserved" support to HRS while calling on the country's shipping industry to do the same. The classification society "constitutes a significant part of Greek shipping's infrastructure" believes Marine ministry secretary general, John Tzoannos, and "is necessary for serving Greek shipping".
Tajani generally supported the Greek positions on issues discussed. As well as the HRS and the ferry sector, the Erika III package and air emissions topped the agenda.
Papaligouras asked Tajani to put aside a so-called "justified opinion" by the commission and the threat to send Greece to the European Court because of its alleged failure to implement EU policy regarding territorial seatransportation. Though no assurances were given the commissioner recognised efforts being made to find solutions to issues. The Greek minister pointed out there has been considerable progress since the opinion was issued and that Greek and EU officials are working together to find solutions as to the legality of Greece's ticketing system and crewing, like insisting crew on passenger ships speak Greek.
-- Filed: 2008-11-10
Pittas cuts payout
---Euroseas cut its dividend Thursday as it reported lower-than-expected third-quarter profit.
But chief executive Aristides Pittas says the company is poised to take advantage of the market downturn.
The Nasdaq-listed bulker and boxship owner slashed its dividend to $0.20 per share, down 37.5% from the $0.32 dividend issued in the second quarter.
Euroseas reported Thursday that third-quarter net income surged by 61.8%, to $15.3m from $9.47m a year earlier.
The profits amounted to $0.50 in earnings per share (EPS). Without amortisation of time-charters, Euroseas adjusted EPS was $0.46, below the average analyst estimate of $0.48.
Net revenues grew by 65.3% to $35.5m, while operating expenses grew by 64.7% to $18.9m.
Credit crunch hurts
Pittas said global economic slowdown should keep trade volume and asset values low, but therein lays an opportunity.
Based in Athens, Euroseas owns five bulkers, a multipurpose ship, and 10 containerships. Pittas said his company avoided buying up bulkers at high prices in the last two years. Instead, the company focussed on older ships in the spot market.
Solid financial position
Euroseas has $74m in unrestricted cash, $7m in restricted cash and relatively low $62m in debt. Aslidis said the company is in compliance with all debt covenants.
For the first nine months of the year, Euroseas posted $46.2m in net income, an 82.2% increase over the same period of last year.
By Eric Martin in Stamford
Published: 00:00 GMT, 14 Nov 2008 | last updated: 11:46 GMT, 14 Nov 2008
Goldenport warns of early deliveries
The company operates a fleet of 20 vessels: 14 container vessels and six dry bulkers. Charter parties of three container ships allow earliest redelivery this year and that of a further seven in 2009, while one dry bulker can be redelivered to Goldenport this year and four in 2009. Its newbuilding programme comprises two container vessels that are due in 2010-11 and seven Supramax dry bulkers, the deliveries of which will run from 2008-2011.
Some industry observers have stated that providers of container ship and vehicle carrier tonnage may end up being hit rather hard by the weakening economic cycle. While operators of these ships experience softening of freight rates first, they can adjust capacity by redelivering vessels employed on timecharter first. Bareboat chartered and owned vessels will be retained longer as they form the backbone of these fleets.
However, in a weak market, tonnage providers may find it difficult to fix vessels that have been redelivered to them at acceptable rates.
Goldenport arrived at this situation in the case of Achim. Looking ahead, the option of recycling old ships is losing part of its appeal as prices are falling here too, the company said.
Full company name: Goldenport Holdings, Inc
Listed: London Stock Exchange
Latest financial result: 1H08 net profit $27.6M (1H07: $28.6M)
Source: Fairplay International Shipping Weekly - Companies 13 Nov 2008
Solid tanker rates lift TEN earnings
Paul Tugwell, Athens - Monday 10 November 2008
Excluding capital gains, the Athens-based tanker company posted a 125.1% rise in net earnings for the quarter to nearly $41m compared with $18.2m for the same period in 2007.
Including around $34.6m in capital gains, associated with the sale of a ship, net income in the third quarter of 2007 was $50m. TEN booked no such capital gains in the third quarter this year.
Both spot and period markets in the period were strong despite the customary weak nature of the third quarter, the company said.
The tanker market has remained resilient in the prevailing negative economic sentiment and conditions.
This can be attributed to charterers being primarily oil majors, refineries and government-backed end users, it added.
Paragon Shipping reports profit in Q3
-Time charter revenue increases 130% to $43.6 million
- GAAP Diluted EPS of $0.69 vs. ($0.98) in prior year; Adjusted Diluted EPS of $0.54 vs. $0.24
ATHENS, Greece, November 12, 2008 - Paragon Shipping Inc. (Nasdaq: PRGN), a global shipping transportation company specializing in drybulk cargoes, announced today its results for the three and nine months ended September 30, 2008.
Source: Posted on Thursday, November 13 2008, http://www.paragonship.com/Index.cfm?page=irpr&ItemID=82
Aegean Marine Petroleum Network Inc. Announces Third Quarter and Nine Month 2008 Financial Results
Third Quarter Sales Volumes Increase 49%
PIRAEUS, Greece, Nov. 12 /PRNewswire-FirstCall/ -- Aegean Marine Petroleum Network Inc. (NYSE: ANW) today announced financial and operating results for the third quarter and nine months ended September 30, 2008.
Third Quarter 2008 and Year-to-Date Highlights
* Increased sales volumes to 1,338,914 metric tons in Q3 2008 and
3,631,486 metric tons for the nine months ended September 30, 2008.
* Generated gross spread on marine petroleum products of $44.4 million in
Q3 2008 and $115.3 million for the nine months ended September 30,
* Recorded operating income of $15.1 million in Q3 2008 and $36.0 million
for the nine months ended September 30, 2008.
* Reported adjusted net income, which excludes certain special items
including $0.9 million relating to a tax accrual and $0.2 million
relating to the automatic vesting of shares belonging to our deceased
Director, of $10.6 million or $0.25 basic and diluted earnings per
share for Q3 2008. Net Income for the quarter was $9.5 million, or
$0.22 basic and diluted earnings per share. Net Income for the nine
months ended September 30, 2008 was $26.8 million, or $0.63 basic and
diluted earnings per share.
* Continued expanding global platform and infrastructure:
-- Acquired ICS Petroleum on July 1, 2008 expanding Aegean's operations
to Vancouver, Montreal, and Mexico
-- Purchased three double-hull bunkering tankers
-- Took delivery of fourth double-hull bunkering tanker newbuilding to
date this year and eighth since the Company's IPO in December 2006
-- Announced expansion into Trinidad & Tobago establishing Aegean in
the Southern Caribbean market
The Company recorded net income of $9.5 million, or $0.22 basic and diluted earnings per share, for the three months ended September 30, 2008. For purposes of comparison, the Company reported net income of $7.8 million, or $0.19 basic and $0.18 diluted earnings per share, for the three months ended September 30, 2007. The weighted average basic and diluted shares outstanding for the three months ended September 30, 2008 were 42,505,507 and 42,640,765, respectively. The weighted average basic and diluted shares outstanding for the three months ended September 30, 2007 were 42,410,000 and 42,532,289, respectively.
During the three months ended September 30, 2008, the Company incurred certain special items totaling $1.1 million, of which $0.9 million related to a tax accrual in our Bunkers-at-Sea unit and $0.2 million related to the automatic vesting of shares belonging to our deceased Director. Regarding the tax item, Aegean is currently in the process of restructuring its Northern European business which it expects should lead to the elimination of this liability. Adjusted net income, excluding these items, was $10.6 million or $0.25 basic and diluted earnings per share.
Total revenues for the three months ended September 30, 2008, increased by 167.1% to $950.6 million compared to $355.9 million for the same period in 2007. For the three months ended September 30, 2008, sales of marine petroleum products increased by 167.4% to $948.6 million compared to $354.7 million for the year-earlier period.
Results for the third quarter of 2008 were driven by a 99.1% increase in the gross spread on marine petroleum products to $44.4 million compared to $22.3 million for the same period in 2007. For the three months ended September 30, 2008, the volume of marine fuel sold increased by 49.2% to 1,338,914 metric tons compared to 897,147 metric tons in the year-earlier period, as sales volumes improved significantly in Greece and Singapore. Furthermore, results for the third quarter of 2008 included sales volumes from Aegean's new markets, including Northern Europe (October 2007), West Africa (January 2008), U.K. (April 2008), and North America (July 2008). During the three months ended September 30, 2008, the gross spread per metric ton of marine fuel sold increased to $32.8 per metric ton, compared to $24.8 per metric ton during the three months ended September 30, 2007.
Operating income for the third quarter of 2008 was $15.1 million compared to $8.9 million for the same period in 2007. Operating expenses, excluding the cost of fuel and cargo transportation costs (both of which are included in the calculation of gross spread on marine petroleum products explained above), increased to $31.3 million for the three months ended September 30, 2008 compared to $14.6 million for the same period in 2007. This increase was principally due to operating an expanded logistics infrastructure platform, comprised of a larger bunkering fleet and more storage facilities, during the third quarter of 2008 compared to the third quarter of 2007.
E. Nikolas Tavlarios, President, commented, "During the third quarter and year-to-date, Aegean continued growing sales volumes at a robust pace. For the three and nine months ended September 30, 2008, sales volumes increased 49.2% and 50.6%, respectively. The Company remains committed to further growing its global presence. During this past quarter, the Company expanded into Canada and Mexico, through the acquisition of ICS Petroleum, and recently announced plans to enter the Southern Caribbean market in early 2009. We also increased our bunkering fleet over the quarter, taking delivery of our fourth double-hull bunkering tanker newbuilding, acquiring three second-hand double-hull vessels, and taking-on two barges. The Company expects to take delivery of 23 remaining newbuildings over the next two years. In maintaining our commitment to growth, management remains poised to further strengthen Aegean's leadership position and expand the Company's earnings power over the long term."
For the nine months ended September 30, 2008, the Company recorded net income of $26.8 million, or $0.63 basic and diluted earnings per share, compared to net income of $21.5 million, or $0.51 basic and diluted earnings per share, for the nine months ended September 30, 2007. The weighted average basic and diluted shares outstanding for the nine months ended September 30, 2008 were 42,490,780 and 42,643,124, respectively. The weighted average basic and diluted shares outstanding for the nine months ended September 30 2007 were 42,410,000 and 42,475,004, respectively.
Total revenues for the first nine months ended September 30 2008 increased by 160.9% to $2,223.6 million compared to $852.3 million for the same period in 2007. For the nine months ended September 30 2008, sales of marine petroleum products increased by 161.3% to $2,217.6 million compared to $848.6 million for the same period in 2007.
Results for the nine months ended September 30, 2008 were led by a 90.9% increase in the gross spread on marine petroleum products to $115.3 million compared to $60.4 million for the same period a year ago. For the nine months ended September 30, 2008, the volume of marine fuel sold increased 50.6% to 3,631,486 metric tons compared to 2,410,874 metric tons in the year-earlier period. During the nine months ended September 30, 2008, the gross spread per metric ton of marine fuel sold increased to $31.5 per metric ton, compared to $24.9 per metric ton during the nine months ended September 30, 2007.
Operating income for the nine months ended September 30, 2008 was $36.0 million compared to $22.0 million for the same period in 2007. The increase in operating income was attributable to higher gross spreads (i.e. or net revenues) and improved operating leverage.
Liquidity and Capital Resources
As of September 30, 2008, the Company had cash and cash equivalents of $30.1 million and working capital of $45.2 million. Non-cash working capital, or working capital excluding cash and debt, was $171.8 million as of September 30, 2008.
Net cash provided by operating activities was $27.4 million for the three months ended September 30, 2008. Net income, as adjusted for non-cash items, was $15.1 million for the period. During the three months ended September 30, 2008, the Company utilized $14.4 million in cash and made drydocking payments of $2.1 million. Net cash provided by operating activities was $48.9 million for the nine months ended September 30, 2008.
Net cash used in investing activities was $56.9 million for the three months ended September 30, 2008, mainly due to additional payments of $35.4 million under the Company's construction contracts with the shipyards, $12.4 million relating to the acquisition of second-hand bunkering vessels, and $9.1 million relating to the acquisition of ICS Petroleum. Net cash used in investing activities was $109.0 million for the nine months ended September 30, 2008.
Net cash provided by financing activities was $43.5 million for the three months ended September 30, 2008, mainly due to additional net drawdowns of $31.1 million under the Company's term loan facilities to finance a portion of the Company's newbuilding construction costs and $12.6 million representing an increase in the Company's overdraft balances to finance working capital requirements. Net cash provided by financing activities was $88.2 million for the nine months ended September 30 2008.
As of September 30, 2008, the Company had approximately $80.5 million in available liquidity to finance working capital requirements, which includes unrestricted cash and cash equivalents and available undrawn amounts under the Company's short-term working capital facilities. Furthermore, as of September 30, 2008, the Company had funds of approximately $145.6 million available under its secured term loans to finance the construction of its new double-hull bunkering tankers.
Spyros Gianniotis, Chief Financial Officer, stated, "Aegean posted solid financial results for the quarter. The successful integration of our acquisition of Vancouver-based ICS Petroleum combined with contributions from our other new markets led to considerable growth in sales volumes during the third quarter. We also benefited from significant improvements in Greece and Singapore. Our strong financial position, including a working capital surplus and attractive credit facilities, bodes well for management to further enhance sales volumes as we continue to execute our long-term growth strategy for the benefit of the Company and our shareholders."
Press Release in full is available at > http://www.ampni.com/index.asp
---THE financial tsunami which has overwhelmed the shipping industry could have been worse had it happened in 2006 or 2007, according to Petrofin MD Ted Petropoulos.
Petropoulos advises owners to:
# Keep costs low
# Hold on to liquidity
# Negotiate with charterers
# Rework financial strategies
# Keep vessels as best employed
# Communicate with banks.
Source: Fairplay International Shipping Weekly - Newswatch 13 Nov 2008