-- Revenues increased by 220.9% from the same period last year.
Specifically, in the second quarter 2008, the Company had revenue from
operations of $353.9 million and Net Income of $31.3 million, before a one-
time charge for the early extinguishment of its senior secured notes
compared to revenues of $110.3 million and Net Income of $2.9 million for
the same period in 2007. After the one-time charge of $36.9 million
related to the early retirement of its senior secured notes, the Company
incurred a Net Loss of $5.6 million or $0.28 per share for the second
quarter 2008.
-- EBITDA for the second quarter 2008 was $47.9 million compared to $13.7
million for the same period last year, an increase of 250%. Please refer
to a subsequent section of this Press Release for a reconciliation of
EBITDA to Net Income.
-- The average number of vessels in our controlled fleet, which includes
our own vessels as well as those we charter in, increased from 45 in Q2
2007 to 78 in Q2 2008.
-- An average of 13 owned vessels were operated earning an average daily
TCE rate of $30,522 compared to 9 vessels earning an average daily TCE rate
of $21,019 during the same period in 2007. Our owned vessel available days
increased by 53% to 1,251 in Q2 2008 compared to 817 in Q2 2007.
-- An average of 56 vessels were chartered in earning an average daily
TCE rate of $47,385 compared to 28 vessels earning an average daily TCE
rate of $26,762 during the same period in 2007. Our chartered in vessel
available days increased by 108% to 5,139 in Q2 2008 from 2,465 in Q2 2007.
-- Tonnes of cargo shipped during the second quarter 2008 increased by
76.3% to 5,097 tonnes compared to 2,891 tonnes during the same period last
year.
First Six Months 2008 Financial and Operational Highlights:
-- The Company had revenue from operations of $654.1 million and Net
Income before a one-time charge for the early extinguishment of its senior
secured notes of $62.9 million compared to revenues of $171.6 million and
Net Income of $2.8 million for the same period in 2007. After the one-time
charge of $36.9 million related to the early retirement of its senior
secured notes in the second quarter of 2008, Net Income for the first six
months of 2008 was $26.0 million or $1.35 per share.
-- EBITDA for the six months 2008 was $94.4 million compared to $20.2
million in the same period last year, an increase of 367%. Please refer to
a subsequent section of this Press Release for a reconciliation of EBITDA
to Net Income.
-- The average number of vessels in our controlled fleet increased from
39 in the first six months of 2007 to 75 in the first six months of 2008.
-- An average of 21 owned vessels operated during the first six months of
2008 earning an average daily TCE rate of $28,383 compared to 16 vessels
earning an average daily TCE rate of $19,162 during the same period last
year. Our owned vessel available days increased by 74% to 2,418 in the
first six months of 2008 compared to 1,389 in the first six months of 2007.
-- An average of 54 vessels were chartered in during the first six months
of 2008 earning an average daily TCE rate of $45,234 compared to 23 vessels
earning an average daily TCE rate of $23,647 during the same period last
year. Our chartered in vessel available days increased by 136% to 9,777 in
the first six months of 2008 from 4,144 in the first six months of 2007.
-- Tonnes of cargo shipped during the first six months of 2008 increased
by 95.6% to 10,494 tonnes compared to 5,365 tonnes during the same period
last year.
-- The Company generated cash flow from operations of $52.0 million at
June 30, 2008, an increase from $11.0 million during the same period of
2007.
Fleet Development:
-- During the first half of 2008, the Company acquired three additional
three vessels expanding its owned fleet to a total of thirteen drybulk
carriers. Specifically, in January 2008, the Company acquired and took
delivery of a specialist self-unloading ice-class Handysize vessel, the
Defiant II, built in 1978, for $5.7 million. In February 2008, the Company
acquired and took delivery of two 1995 built, ice-class Handymax vessels,
Ice Trader II and Ice Power II, for approximately $71 million in the
aggregate.
-- Currently, the Company owns a fleet of 22 vessels comprised of 13
drybulk vessels, five of which are ice-class, five ocean going ice-class
barges and four ice-class tugs. In addition, as of June 30, 2008, the
Company had chartered in an additional 53 drybulk vessels adding another
2.9 million dwt in capacity.
-- On November 8, 2007, the Company entered into agreements for the
acquisition of six new-build, ice-class Panamax bulk carrier vessels for
$59.4 million each ($356.4 million in the aggregate). The Company expects
to take delivery of these vessels by June 30, 2009, September 30, 2009,
December 31, 2009, March 31, 2010, June 30, 2010 and September 30, 2010,
respectively. Upon delivery of these vessels the Company's owned fleet will
expand to a total of 28 vessels, including 19 drybulk vessels, eleven of
which will be ice-class. Based on the Company's market knowledge there are
currently fewer than 10 ice-class Panamax drybulk carriers which are less
than 10 years old, and therefore following delivery of these Panamax
newbuild vessels, the Company expects to own the largest and most modern
fleet of ice class Panamax drybulk vessels in the world. Owning ice class
vessels provides the company with a distinct competitive advantage given
its main focus on trade routes in the Baltic region.
Management Commentary:
Arvid Tage, Chairman and CEO of Britannia Bulk Holdings, commented: "We are
pleased to report strong operating results for the second quarter 2008
continuing our track record of profitable growth. We attribute the strong
quarter earnings to the increase in demand from our customers for
commodities shipped, and an increase in our controlled fleet. Our ability
to maximize our profit through a combination of owned and chartered in
vessels has allowed us to realize an increase of 221% in revenues and 979%
in Net Income before the one-time charge related to the early retirement of
our senior secured notes.
"In 2008, we have grown significantly and our business profile has
diversified. We transport a broad range of cargoes using a variety of owned
and chartered in vessels across a number of trade routes. In the second
quarter of 2008, our Panamax business grew by 534% to represent 53% of our
revenues, while Handymax and Handysize vessels account for 29% and 18% of
our revenues respectively.
"This underlying growth is also reflected in the broader geographic spread
of our trade routes. We have grown our North and South American business
routes to 21% of our second quarter 2008 revenues compared to 12% for the
same time last year. While coal still represented 45% and 32%,
respectively, of the cargo we transported in the second quarter of 2008 and
2007, we significantly increased our shipments of fertilizers, agricultural
products such as grain and scrap, among other commodities. Time charters
accounted for about 42% and 14% respectively of our revenues in the second
quarter of 2008 and 2007, representing the second largest use of our total
owned and chartered in capacity after shipments of coal.
"Our owned fleet has expanded in 2008 to 13 ships in total following the
acquisition of 3 vessels since the beginning of the year. At the same time,
our chartered in fleet as of June 30, 2008 increased to 53 vessels in the
second quarter of 2008 compared to 28 in the same period last year.
"This increase in our year over year number of chartered in vessels is a
direct result of our commitment to capitalize on the growing demands of our
existing and increasing customer base who require additional services
during times of strength in the dry bulk market. This strategy allows us
to adjust our fleet based on market conditions without the need to depend
on capital for fleet growth. Going forward, we plan to continue to add to
our position of chartered in vessels while at the same time, take advantage
of our strong balance sheet, by seeking to enhance our owned fleet through
disciplined acquisitions.
"The acquisition of the six new-build, ice-class Panamax bulk carrier
vessels in due course will further enhance our growth strategy. Upon
delivery of these vessels we will increase our leading market position in
the ice class segment, which will better serve the needs of our customers
who trade in the Baltic region. We believe that our expertise of managing
vessels in ice class conditions, and our diversified fleet of owned and
chartered in vessels, which allows us to transport cargoes through various
trade routes, including smaller ports, creates a competitive advantage.
"In closing, the listing of our common shares on the prestigious New York
Stock Exchange is a strategic milestone in the long-term development of our
company. We believe it will provide us with a significant platform to
pursue our growth strategy while at the same time creating attractive
returns for our shareholders. Moving forward, we believe that we are
strategically positioned to benefit from the strength of drybulk market and
the expanding regional trade flows especially in the Baltic region
capitalizing on our industry know-how, our strong customer relationships
and our commitment to providing our customers with a comprehensive range of
transportation and maritime logistics services."
Dividend Policy:
The Company's Board of Directors has adopted a dividend policy to pay a
regular dividend of up to 30% of our quarterly net income, or such other
smaller amount as the Board may deem appropriate. While there is no
assurance that the Company will do so, in November 2008 it expects to
declare a dividend of $0.28 per share for the quarter ending September 30,
2008.
Reconciliation of EBITDA to Net Income:
Three months Six months
ended ended
June 30, June 30,
---------------- -----------------
2008 2007 2008 2007
------- -------- -------- --------
($ in thousands)
Net Income (loss) (5,559) 2,881 25,987 2,815
Interest expense, net 5,514 4,860 11,205 8,659
Provision for taxes 767 172 909 211
Depreciation and amortization 10,331 5,769 19,477 8,474
Loss on early extinguishment of debt 36,870 - 36,870 -
------- -------- -------- --------
EBITDA 47,923 13,682 94,448 20,159
======= ======== ======== ========
EBIDTA represents net income plus net interest expense, income tax expense,
depreciation and amortization, EBITDA is included because it is used by
management and certain investors as a measure of operating performance.
EBITDA is used by analysts in the shipping industry as a common performance
measure to compare results across peers. Our management uses EBITDA as a
performance measure in consolidating internal financial statements and is
presented for review at our board meetings. EBITDA is also used by our
lenders in certain loan covenants. For these reasons, we believe that
EBITDA is a useful measure to present to our investors. EBITDA is not an
item recognized by U.S. GAAP and should not be considered as an alternative
to net income, operating income or any other indicator of a company's
operating performance required by U.S. GAAP. EBITDA is not a source of
liquidity or cash flows as shown in our consolidated statement of cash
flows. The definition of EBITDA used here may not be comparable to that
used by other companies.
Conference Call:
The Company's management will host a conference call tomorrow, Tuesday,
August 05, 2008 at 10:00 a.m. EDT to discuss the Company's financial
results. Please note that conference call materials will be made available
on the Company's website prior to the conference call on Tuesday, August 5,
2008.
Conference Call details:
Participants should dial into the call 10 minutes before the scheduled time
using the following numbers: 1(866) 819-7111 (from the US), 0(800) 953-0329
(from the UK) or + (44) 1452-542-301 (from outside the US). Please quote
"Britannia Bulk."
Should you require assistance in accessing the earnings conference call,
please dial 1(866) 223-0615 (from the US), 0(800) 694-1503 (from the UK) or
(+44) 1452-586-513 (from outside the US). Please quote "Britannia Bulk."
A replay of the conference call will be available until August 12, 2008.
The United States replay number is 1(866) 247-4222; the UK replay number is
0(800) 953-1533; and the international replay number is (+44) 1452-550-000.
The access code required for the replay is: 56367113 #.
Slides and audio webcast:
There will also be a simultaneous live webcast over the Internet, through
the Britannia Bulk Holdings Inc website (www.britbulk.com). Participants to
the live webcast should register on the website approximately 10 minutes
prior to the start of the webcast.
ABOUT BRITANNIA BULK HOLDINGS INC.
Britannia Bulk Holdings Inc. is an international provider of drybulk
shipping and maritime logistics services with a focus on transporting
drybulk commodities in and out of the Baltic region. The current owned
fleet consists of 22 vessels, including 13 drybulk vessels, five of which
are ice-class, five ocean going ice-class barges, and four ice-class tugs.
The Company also charters-in additional vessels to increase its overall
deadweight tonnage capacity and enhance its service to its customers. As
at June 30, 2008, the number of chartered-in drybulk vessels under the
Company's control was 53, 9 of which were ice-class.
Contact Information: Company Contact: Fariyal Khanbabi Chief Financial Officer Tel. +44 (0)20 7264 4900 Investor Relations / Media: Paul Lampoutis Vice President Capital Link, Inc. Tel. (212) 661-7566 E-mail: britanniabulk@capitallink.com