GOTHENBURG, Sweden, Aug. 16, 2004 (PRIMEZONE) -- Concordia:
- Profit after tax SEK 100.2 (68.3) million -- SEK 2.10 (1.43) per share
- SEK 44.7 (-7.6) million profit on the sale of a ship included
- Forecast for full year: SEK 170 million (SEK 3.56 per share) -- an increase of SEK 20 million compared with previous forecast
- Forecast profit per share after tax: SEK 3.28
SALES AND RESULT
6 months Consolidated sales for the first six months amounted to SEK 225.2 (449.1) million. The result after financial items was SEK 105.2 (60.8) million, which included a profit of SEK 44.7 ( 7.6) million on the sale of a ship. The result includes reimbursement of expenses amounting to SEK 13.4 million relating to an insurance claim from 2002. The result after tax was SEK 100.2 (68.3) million, which corresponds to a result per share after tax of SEK 2.10 (1.43).
2nd quarter Consolidated sales in the second quarter amounted to SEK 86.2 (176.6) million. The result after financial items was SEK 60.9 (-7.3) million, which included a profit of SEK 44.7 (-7.6) million on the sale of a ship. The result after tax was SEK 56.2 (1.0) million, which corresponds to a result per share after tax of SEK 1.18 (0.02).
Sales and result per operating segment
Sales and the result for the period refer in their entirety to the large tanker/VLCC segment. All the costs in the product tanker segment relate to the P-MAX tankers under construction and are included in the investments for the period.
Tanker market
After a strong beginning of the year, the large-tanker market weakened until April, but is now once again very strong. The freight rates for modern tonnage are in the region of USD 75 80,000 per day. Like the large tanker market, the product tanker market (MR = Medium Range tanker) weakened up until April from a strong position at the beginning of the year. The subsequent recovery, however, has not been as strong as in the large tanker market.
V-MAX
The Group's two V-MAX VLCCs, the Stena Vision and the Stena Victory, continued to operate on the West Africa-US East Coast trade under the terms of their time-charter contracts with the US oil company Sunoco. These contracts were renewed in May and run until mid-2007.
VLCC
The Groups two remaining Concordia Class VLCCs were sold at the beginning of the year. One of them, the Stena Constellation, was delivered to the buyer on 29 June. The second tanker, the Stena Congress, will be delivered to the buyer in the fourth quarter. During the first half of the year, both vessels were employed on the spot market at profitable freight rates, which were, however, substantially lower than the freight rates for modern tonnage. The average freight rate was USD 24,000 (8,000) per day.
Ship management and operation
During the period, the fleet continued to be operated with a focus on safety and quality and the cost of ongoing ship operation remained at a low level.
The shipbuilding market and the world tanker fleet
Newbuilding orders continue to be placed with the shipyards, which, historically speaking, are experiencing a very high level of capacity utilisation. Shipbuilding prices have risen overall by up to 25% since Concordia signed the contracts for the six P-MAX tankers about a year ago. During the same period, prices of second-hand tonnage have also risen by up to 30% as a consequence of the strong freight markets.
EQUITY
Equity per share is SEK 23.96 (23.33). The SEK/USD exchange rate on 30 June 2004 was 7.55 (8.00). On 31 December 2003, equity per share was SEK 21.51 and the SEK/USD exchange rate was 7.28. The decrease in value of the SEK in the SEK/USD exchange rate has increased equity by SEK 41 (-108) million, equivalent to SEK 0.85 (-2.26) per share.
LIQUIDITY AND FINANCING
In order to secure the borrowing requirements arising as a result of the investments in new tonnage, the old credit facility was replaced with new financing at the end of June. The new credit facility, which has a duration of about seven years, totals USD 250 million of which USD 100 million is at the disposal of the Group now, while USD 150 million will be made available as the P-MAX tankers are delivered. The Group's disposable liquid funds, including unutilised credit facilities, amounted to SEK 645 (379) million on 30 June 2004. Disposable liquid funds on 31 December 2003 totalled SEK 320 million.
INVESTMENTS
Investments during the period amounted to SEK 35.6 million and consist of advance payments to the shipyard and project costs relating the P-MAX tankers. Capitalised interest amounting to SEK 0.9 million is included.
RELATED COMPANY TRANSACTIONS
Concordia purchases services on a regular basis from the Stena Sphere. These payments cover the following services:
- Vessel charter. Payment is based on a commission of 1.25% on freight rates.
- Commission on the purchase and sale of vessels. Payment is based on a commission of 1% on purchases and sales.
- Operation of any jointly chartered vessels. Payment is based on a fixed price per month and vessel.
- Purchases of bunker oil. Payment is based on a commission of about 0.1% per ton purchased.
- Administration, marketing, insurance, technical follow-up and development of Concordia's fleet. Payment is based on a fixed price per month and vessel. In the case of technical consulting services for newbuilding projects, an hourly rate is charged on current account, which is then charged to the project.
- Office rent and office services for Concordia's personnel. A fixed price per year is charged.
All related company transactions take place on commercial terms and at market-related prices.
PARENT COMPANY
The Parent Company's sales totalled SEK 8.2 (8.6) million. Intergroup invoicing accounted for SEK 6.7 (8.5) million of this amount. The result after financial items was SEK -7.0 (-3.0) million. The Parent Company's disposable liquid funds, including unutilised credit facilities, amounted to SEK 14.4 (24.4) million. There were no investments during the period. Until the P-MAX tankers are delivered in 1-2 years, Concordia will operate on a reduced scale with only two vessels on the market. With a view to adjusting our administrative costs to this, the persons employed in the parent company have been offered employment in the Stena Sphere. As of 1 July, the parent company thus has no employees with the exception of its President. A consequence of this is that the company will purchase more services both externally and from the Stena Sphere. Consequently, we expect the company to achieve the necessary cost savings in its administration.
FORECAST 2004
Concordia's result is currently only marginally affected by short-term upswings and downturns on the tanker market. The Group's two V-MAX tankers are signed to time-charter contracts at fixed freight rates until mid-2007. The remaining vessel in the so-called Concordia Class, the Stena Congress, will only be operated for a further few months prior to delivery to the buyer during the fourth quarter. The forecast for the full year is SEK 170 million before tax (including the capital gain on ship sales), which is equivalent to SEK 3.56 per share. This is SEK 20 million higher than the previous forecast. The forecast for the profit per share after tax is SEK 3.28.
ACCOUNTING PRINCIPLES AND METHODS OF CALCULATION
As of 1 January, the Company has applied the Swedish Financial Accounting Standards Council's recommendation no. 29 relating to remuneration to employees. This will have no significant effect on the consolidated income statement and balance sheets. In all other respects, the accounting principles and methods of calculation applied are the same as those applied in the Annual Report for 2003.
Preparations for the transition to International Financial Reporting Standards (IFRS) As of 1 January 2005, all listed companies in the EU must comply with IFRS (previously IAS). A gradual adjustment has been in progress for a number of years in the form of implementation of the Swedish Financial Accounting Standards Council's recommendations, which are based on IFRS. Work on preparing for the transition to IFRS is continuing and the Company's assessment is that the transition should not cause any problems.
REPORTS AND INFORMATION
This interim report has been reviewed by the Company's accountants. The 9-month Report will be published on 20 October, 2004 and the result for the full year on 17 February, 2005. Historical and current reports, together with news and comments on the Company and the tanker markets, can be found on our web site www.concordia-maritime.se.
Gothenburg 12 August, 2004 CONCORDIA MARITIME AB (publ)
Concordia Maritime AB (publ) Danmarksterminalen SE-405 19 GOTHENBURG SWEDEN
Company number: 556068-5819
Concordia Maritime is an international tanker shipping company, which owns two 313.000 dwt Stena V-MAX VLCCs delivered in 2001. These vessels are designed for maximum loading capacity in shallow waters. In addition to having mandatory double hulls, the vessels were built according to a new concept for safer oil transportation with double main engines in two completely separate engine rooms, double rudders and steering gear, two propellers and double control systems. In 2003, a further six vessels, which will be built in accordance with the MAX concept, were ordered.
These vessels, Stena P-MAX, are product tankers of about 49,900 dwt and will be delivered over a 12-month period from the end of 2005.
All the vessels are built to very high specifications as regards both customer satisfaction and lifespan. The quality of the vessels and the management and manning organisations is documented by quality certificates from Det Norske Veritas and the American Bureau of Shipping.
INNOVATION AND PERFORMANCE
Our mission is to generate a profit by providing our customers with safe, cost-effective tanker transportation based on innovation and performance
This information was brought to you by Waymaker http://www.waymaker.net
The following files are available for download:
http://www.waymaker.net/bitonline/2004/08/16/20040816BIT20770/wkr0001.pdf
Interim Report Q2 2004 Concordia Maritime