Hellenic Carriers Limited HELLENIC CARRIERS LIMITED - 2015 INTERIM RESULTS (6283A)

TIDMHCL

RNS Number : 6283A

Hellenic Carriers Limited

30 September 2015

H1 2015 Financial Results

Press Release 30 September 2015

HELLENIC CARRIERS LIMITED

REPORTS 2015 INTERIM UNAUDITED RESULTS

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.

H1 2015 FINANCIAL HIGHLIGHTS

Þ Revenue: US$ 6.7 million (H1 2014: US$ 10.4 million)

Þ EBITDA(1) (:) US$ 2.0 million negative (H1 2014: US$ 0.8 million positive)

Þ Operating loss before non-cash loss on sale of vessel: US$ 6.7 million (H1 2014: US$ 3.4 million)

Þ Net loss before book loss on sale of vessel: US$ 8.5 million (H1 2014: US$ 5.3 million)

Þ Book loss on sale of vessel: US$ 4.0 million (H1 2014: US$ nil)

Þ Gearing ratio(2) 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)

H1 2015 OPERATIONAL HIGHLIGHTS

Þ 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)

Þ 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

Þ Improving efficiency of operations: 7% reduction in daily vessel operating expenses (US$ 4,807 from US$ 5,205 in H1 2014)

Market Commentary

Throughout 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.

Fleet Developments

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 
------------------------------------------------------------------------------------ 
                                                                            Carrying 
                                                                 Year       Capacity 
 Vessel              Type         Yard                            Built        (dwt) 
------------------  -----------  -----------------------------  --------  ---------- 
 M/V Hellenic                     Tsuneishi Shipbuilding 
  Wind               Panamax       Corporation, Japan            1997         73,981 
------------------  -----------  -----------------------------  --------  ---------- 
 M/V Konstantinos                 Mitsui Engineering 
  D                  Supramax      & Shipbuilding, Japan         2000         50,326 
------------------  -----------  -----------------------------  --------  ---------- 
 M/V Odysseas                     Zhejiang Ouhua Shipbuilding 
  I                  Kamsarmax     Co. Ltd., China               2013         81,662 
------------------  -----------  -----------------------------  --------  ---------- 
 M/V Konstantinos                 Zhejiang Ouhua Shipbuilding 
  II                 Kamsarmax     Co. Ltd., China               2013         81,698 
------------------  -----------  -----------------------------  --------  ---------- 
                                  Tsuneishi Shipbuilding 
 M/V Pistis          Supramax      Corporation, Japan            2004         52,388 
------------------  -----------  -----------------------------  --------  ---------- 
 Total Operating Fleet: 5 Vessels                                            340,055 
------------------------------------------------------------------------  ---------- 
 

Debt / Financing Activities

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.

Fleet Deployment

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.

H1 2015 Results

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.

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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.

Selected Financial Data:

 
 (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

Fleet Operating Data:

 
                                   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 
--------------------------------  --------  -------- 
 

(1) Ownership days are the cumulative days in a period during which each vessel is owned by the respective vessel owning company.

(2) Available days are ownership days less the days that the vessels are at scheduled off-hire for maintenance or vessel repositioning.

(3) Operating days are the available days less all unforeseen off-hires.

(4) Fleet utilisation is measured by dividing the vessels' operating days by the vessels' available days.

(5) Time Charter Equivalent (TCE)-Gross is defined as vessels' total revenues divided by the number of the available days for the period.

(6) TCE-Net is defined as vessels' total revenues less voyage expenses divided by the number of the available days for the period.

(7) Average daily vessel operating expenses is defined as vessel operating expenses divided by ownership days.

H1 2014 Financial Position / Capitalisation

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.

Dividend

In 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 Limited

Fotini Karamanli, Chief Executive Officer

Alkis Papadopoulos, Chief Financial Officer

   E-mail: [e-mail]                                    [phone] 

Panmure Gordon (UK) Limited

Nominated Adviser & Broker

Mark Taylor [phone]

James Greenwood

Capital Link

Nicolas Bornozis [phone] (New York)

Maria Chercheletzi [phone] (London)

E-mail: [e-mail]

Further Information - Notes to Editors

A copy of this announcement will be available on the Company's website www.hellenic-carriers.com

About Hellenic Carriers Limited

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 
 

INTERIM CONSOLIDATED STATEMENT OF OTHER COMPREHENSIVE INCOME

For the six months ended 30 June 2015

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