Goldenport Holdings announces Interim Results for the Half Year and the Three Months Ended 30 June 2014
Goldenport Holdings Inc. the international shipping company that owns and operates a fleet of dry bulk and container vessels, announces today its Interim Results for the six months ended 30 June, 2014.
Financial Highlights (amounts in US$ ’000 except per share data):
Three Months Ended 30 June 2014
§ Revenue of US$ 12,274, -18.0\% decrease (2013: US$ 14,966)
§ EBITDA of US$ 3,137, -8.9\% decrease (2013: US$ 3,443)
§ Net Income of US$ 454 (2013: Net Loss of US$ 5,888)
§ Earnings per Share of US$ 0.05 (2013: Loss per share US$ 0.63)
Six months ended 30 June 2014
§ Revenue of US$ 24,694, -17.1\% decrease (2013: US$ 29,792)
§ EBITDA of US$ 7,566, -13.1\% decrease (2013: US$ 8,703)
§ Net Loss of US$ 1,391 (2013: Net Loss of US$ 8,310)
§ Loss per Share of US$ 0.15 (2013: Loss per share US$ 0.89)
§ Total cash at 30 June 2014 of US$ 21,656 (31 December 2013: US$ 16,859)
§ Net debt to book capitalisation as of 30 June 2014, 45\% (31 December 2013: 47\%)
CEO Statement:
Trading during the second quarter of 2014 was softer than in the first quarter due to continued subdued demand in the Far East and a weak South American grain season. Supramax rates were once again more resilient than Capesize and Panamax rates, reflecting their versatility and reduced earnings volatility, while containership rates remained broadly stable at levels close to all time lows.
For the three months ended 30 June 2014, the Company reported an 18.0\% decline in revenues, which was less than the corresponding decrease in the average number of vessels from 18 to 14, reflecting the shift in the fleet mix. Our fleet was fully employed during the quarter with the utilisation rate reaching 99\%. The time charter equivalent rate for the fleet was stable, while average daily operating expenses dropped by 11\% due to the retirement of older, less efficient tonnage. This resulted in a widening of the EBITDA margin by 2.6 percentage points to 25.6\%. The Company reported a net profit of US$ 454 or US$ 0.05 per share, including a gain of US$3,077 from the sale of MSC Socotra.
In anticipation of a recovery, we have continued to employ our fleet on a short term basis under 3-6 month time charter agreements. In the past few weeks we have experienced an improvement in dry bulk rates which bodes well for the remainder of the year. This is supported by the Supramax FFA for the remainder of 2014, which is currently trading at US$ 12,600 per day compared to the BSI average TC rate YTD of US$ 9,717 per day. We continue to expect that for 2014 as a whole we will employ our vessels on better terms than 2013 when the BSI average TC rate was US$ 10,328.
We believe that the outlook for the dry bulk sector for the remainder of the year is positive, due to the record US harvests of wheat, grain and soybeans as well as the delayed South American shipments which are expected to begin shipping in September, increased coal imports to India and China, as well as an increase in long-haul Brazilian iron ore imports to China. The outlook for the containership sector is also positive but less clear due to a lack of obvious catalysts. In light of the positive outlook for the dry bulk sector and continued uncertainty in the containership sector, our strategy will continue to be to further increase our exposure to small and medium sized dry bulk carriers and reduce our exposure to older containerships, while maintaining a competitive operating cost base.
Our proposed equity placing was postponed on 13 June 2014 in anticipation of improved shipping and equity market conditions. There is a possibility that the transaction can be completed by year-end. As such, the agreements to acquire option interests in respect of five Green Dolphin Handysize newbuildings from a related party have been extended until year-end. Their exercise is subject to renewed shareholder approval.
Fleet Developments:
Disposals:
On 28 March 2014, the Company agreed the disposal of vessel m/v MSC Socotra to an unaffiliated third party. The sale was concluded at a net cash consideration of US$ 11,150 and the vessel was delivered to the new owners on 30 April 2014. As of delivery date, m/v MSC Socotra had a net carrying value of US$ 8,073. The gain resulting from the sale of the vessel was US$ 3,077 and is included in the consolidated statement of comprehensive income.
Today the fleet consists of 14 vessels, of which 7 are container vessels and 7 dry bulk carriers. The Company also has a 50\% share in 2 additional dry bulk carriers that are accounted for under the equity method.
Operational Fleet Forward Coverage:
The percentage of available days of the fleet already fixed under contracts as of 28 August 2014, assuming the earliest charter expiration, is as follows:
| 2014(1) | 2015(1) | |
| Bulk Carriers | 67\% (40\%) | 0\% (0\%) |
| Containers | 95\% (95\%) | 8\% (8\%) |
| Total Fleet | 80\% (68\%) | 4\% (4\%) |
(1) Percentage of available days of the fleet fixed under contract as reported on 6 May 2014, being the date of the previous trading update, is given in brackets
Q2 2014 Review and Current Market Outlook:
Dry Bulk Carriers:
Supply:
During the second quarter of 2014, deliveries reached approximately 11.1 million DWT (146 vessels) while demolition levels were approximately 4.2 million DWT (77 vessels). As a result there was a net increase in the fleet of approximately 7 million DWT in terms of capacity and approximately 70 units in terms of number of vessels.
New orders showed a noticeable decrease from Q1 and reached around 120 units of 10.5 million DWT compared to 306 units of 27.5 million DWT. The current orderbook stands at about 2,110 units representing about 21\% of the world fleet in terms of number of vessels and about 24\% in terms of carrying capacity.
During the first half of the year there have been 180 orders placed in the wider Handymax sector and the current orderbook of 805 units represents about 26\% of the operating Handymax fleet.
Demand:
Chinese iron ore imports continue to increase and reached about 460 million tonnes by the end of the second quarter. This 20\% rise compared to the first half of last year has been mainly driven by the price of the commodity falling below the $100/tonne mark in May 2014 which fostered the expansion in production in Australia and the displacement of lower quality Chinese iron ore.
Dry bulk freight rates were lower in the second quarter, but since the end of the quarter and especially during the month of August we have experienced a recovery in rates. The average TC rates in Q1 and Q2 2014, current and FFAs for Q4 2014, as of Tuesday 26 August are as follows:
| US$ per day | Q1 2014 | Q2 2014 | Current | Q4 2014 FFAs |
| Capesize | 16,298 | 11,972 | 15,010 | 26,500 |
| Panamax | 10,427 | 6,371 | 6,462 | 11,500 |
| Supramax | 11,631 | 9,025 | 9,954 | 12,600 |
Containerships:
Supply:
In the second quarter, the world containership fleet remained largely unchanged in terms of number of vessels at approximately 5,000 units. In terms of capacity, however, there was a 2.3\% increase and it reached about 17.6 million TEU. This is the result of larger vessels being introduced into the market and utilised by the liner companies, and smaller vessels reaching the end of their economic life being scrapped.
During the second quarter of 2014, about 30 new building contracts were signed, equivalent to about 185,000 TEU. This is a sharp decrease from the first quarter and it is mainly attributed to the increase in the price for newbuildings.
The current orderbook stands at about 455 vessels of about 3.5 million TEU and this represents approximately 20\% of the world fleet in terms of capacity. The vast majority of the investment in the container segment is focused in the asset class of over 8,000 TEU, which represents about 82\% of the current orderbook.
Demand:
From a chartering point of view, there has not been any significant movement in the freight market. The cascading effect continued and the West Africa trade (one of the core trades for 2,500 TEU geared vessels) saw the introduction of gearless tonnage. This change is, however, thought to be short lived due to port infrastructure limitations.
New building ”eco” vessels are being delivered and command a premium from current market levels due to the bunker savings they provide. However, older vessels continue to offer more attractive overall economics.
A gradual recovery is expected in the container freight market, provided that the restrained ordering and increased demolition will remain throughout 2014.
Summary of Selected Financial and Operating Data:
| 3 months ended | ||||
| INCOME STATEMENT DATA (in US$ thousand except share data): | 30 June 2014 | 30 June 2013 | ||
| Revenue | 12,274 | 14,966 | ||
| EBITDA | 3,137 | 3,443 | ||
| EBIT | 1,691 | -3,895 | ||
| Net Income/ (Loss) | 454 | -5,888 | ||
| Earnings/ (Loss) per share (basic and diluted) | 0.05 | -0.63 | ||
| Weighted average number of shares | 9,361,964 | 9,319,176 | ||
| FLEET DATA: | ||||
| Average number of vessels | 14 | 18 | ||
| Number of vessels at end of period | 14 | 18 | ||
| – Operating | 14 | 18 | ||
| Vessels commenced or completed dry-docking in the period | 1 | 2 | ||
| JV vessels | 2 | 2 | ||
| Ownership days | 1,303 | 1,670 | ||
| Available days | 1,277 | 1,616 | ||
| Operating days | 1,261 | 1,600 | ||
| Fleet utilisation | 99\% | 99\% | ||
| AVERAGE DAILY RESULTS (in US$): | ||||
| Time Charter Equivalent (TCE) rate | 8,403 | 8,380 | ||
| Average daily vessel operating expenses | 4,438 | 4,985 | ||
Source: GoldenPort Holdings
