MONACO, Nov. 14 /PRNewswire-FirstCall/ -- MC Shipping Inc.
(AMEX:MCX) (the "Company"), an international liquefied petroleum
gas (LPG) maritime carrier, today reported its financial and
operating results for the third quarter and for the nine months
ended September 30, 2006. Third Quarter Results For the quarter
ended on September 30, 2006, gross revenues (excluding interest
income) were $14.1 million, a 43.4% increase from $9.8 million for
the quarter ended September 30, 2005. Net income for the third
quarter 2006 was $1.3 million or $0.14 per share, compared to net
income of $2,9 million or $0.31 per share for the same period in
2005 (see Appendix 1 for the three months financial summary). The
Company's net earnings, before certain non-recurring items, such as
costs related to excess dry-dock off-hire, change of managers, loss
on debt extinguishment and lost income related to late delivery of
two vessels, were $3.8 million or $0.40 per share in the third
quarter 2006. This figure is 28.9% higher than the similar non-GAAP
measure of $2.9 million for the third quarter of 2005 (see below
for discussion of these items and reconciliation of net earnings
before non-recurring items to net income). The Company believes
that such supplementary non-GAAP disclosure of earnings is useful
for comparability to the prior year's earnings under normal
operating conditions. The Company's earnings before interest,
taxes, depreciation and amortization (EBITDA) were approximately
$8.2 million and the ratio of EBITDA to interest expense was
approximately 3.8 for the quarter ended on September 30, 2006. In
the corresponding quarter of 2005, EBITDA was approximately $ 6.8
million and the ratio of EBITDA to interest expense was
approximately 5.4. Vessel operating expenses (inclusive of dry-dock
amortization) were $5.8 million in the third quarter 2006 compared
to $3.8 million in the third quarter 2005. As a percentage of
revenue, vessel operating expenses plus amortization of dry-docking
costs increased from 39.2% in the third quarter of 2005 to 41.3% in
the third quarter of 2006. Tony Crawford, President and CEO of MC
Shipping commented on the third quarter results, "This quarter has
been very busy for MC Shipping. The Company acquired three mid-size
LPG carriers with time charters attached, completed major dry-docks
on two vessels, and changed technical managers." Crawford
continued, "The acquisitions serve to build an increased presence
in the LPG industry with strong partners. The revenue contribution
of these three vessels has been significant at about $1.7 million
per month. The 24-day delivery delay by the sellers of Tycho Brahe
and Immanuel Kant resulted in the receipt of compensation of
$613,455, which was recorded as a reduction in purchase price. Had
such delivery occurred as planned, net income would have been
approximately $450,000 higher. Financing of the acquisition also
triggered a write-off of approximately $220,000 in debt issuance
costs in relation to old/refinanced debts." "The unusually long and
extended drydockings of the La Forge and Galileo, presented some
obstacles as they continued much further into the third quarter
than originally expected, leading to excess off-hire. The cost of
the dry- docks also far exceeded the budgeted amounts. The
technical managers responsible have been changed and the vessels
are now back in full operation," Crawford added. During the third
quarter, the Company transferred the technical management of all
its gas vessels to unrelated parties. The change of managers
resulted in a concentration of exceptional non-recurring expenses
in the third quarter that was estimated to be approximately
$688,000. Sale of small LPG tankers The Company also announced that
its board and the board of the buyers have approved the sale of six
small LPG tankers to a special purpose German KG company to be
formed by the German finance house MPC Capital for a total sale
price of $52 million. Five vessels will be delivered before year
end and the sixth vessel in 2007. The Company will charter back the
vessels for a minimum period of four years and reinvest between $5
and $5.75 million in the KG company for 25% of the equity. The
total book value of the vessels to be sold was $32.8 million as of
September 30, 2006. Upon the sale of the vessels, the Company will
prepay the corresponding portion of the New Fortis Loan, which
amounted to approximately $22.2 million as of November 14, 2006.
After repayment of the debt and reinvestment in the KG company, the
net proceeds of the transaction will be approximately $24 million
to MC Shipping. The transaction is subject to both parties
agreement on remaining contract documentation. "We remain committed
to these ships and the industry sector," stated Crawford. "The
manager, Hanseatic, will remain unchanged and delivery will be
co-coordinated with our long-standing customers such as Statoil,
Total and Petredec." "After the investment of over $170 million in
new assets in the last 18 months, this envisaged transaction will
provide the Company with additional liquidity and an opportunity to
capitalize on the increased value of our assets," continued
Crawford. "Going forward, we will seek to unlock more of the value,
reinvesting in new projects in the same or related sectors." "It
has been a quarter of exceptional events. Having finished it with
an outline agreement covering this interesting transaction to sell,
but retain control of our small LPG fleet, allows us to leave
behind the last two quarters, which have been difficult
technically. This latest deal would magnify the strength of our
asset value and provide the cash to move to the next level,"
concluded Crawford. Dividend MC Shipping also announced today that
its Board of Directors has declared a quarterly cash dividend of
$0.0625 per share of common stock payable on February 2, 2007 to
shareholders of record as of January 19, 2007. ABOUT MC SHIPPING
INC. MC Shipping Inc. is an international shipping company focused
on maritime transportation of the liquefied petroleum gas (LPG),
with headquarters in Monaco and an office in London. MC Shipping
fully or partially owns and operates a fleet of 19 vessels that
serve the world's major oil, gas, shipping and trading companies.
FORWARD-LOOKING STATEMENTS Except for the historical information
contained herein, the matters discussed in this press release could
contain forward-looking statements that involve risks and
uncertainties that could cause actual results to differ materially
from those predicted by such forward-looking statements. MC
Shipping Inc. undertakes no obligation to publicly update any
forward-looking statement, whether as a result of new information,
future events, or otherwise. CONTACTS: MC Shipping Inc. Alexander
Gorchakov, +377 97 97 49 90 Thomas J. Rozycki, Jr., Investor
Relations Cubitt Jacobs & Prosek Communications 212-279-3115
x208 Appendix 1 Three months financial summary for the period ended
September 30th, 2006 and 2005 (US$): 3 months ended 3 months ended
30-Sep-2006 30-Sep-2005 Charterhire and Other Income $14,054,515
$9,796,898 Commission on Charterhire (100,008) (121,415) Vessel
Operating Expenses (5,275,131) (3,659,226) Costs related to change
of Managers (687,530) - Depreciation and dry-dock amortization
(4,520,471) (2,649,480) General and Administrative Expenses
(611,120) (469,745) Recognized deferred gain on sale of vessels
1,200,622 1 ,189,597 Net gain on sale of vessels 749 - Equity in
losses of associated companies (514,618) (21,478) Operating Income
3,547,008 4,065,151 Interest Expense (2,126,106) (1,255,384)
Interest Income 100,446 111,852 Loss on debt extinguishment
(220,210) - Net Income $1,301,138 $2,921,619 Net Income per share
(basic) $0.14 $0.31 Average Number of shares outstanding 9,508,141
9,366,687 Shareholders equity $46,732,160 $37,856,608
Reconciliation of EBITDA to Net Income Net Income $1,301,138
$2,921,619 Plus: interest expense 2,126,106 1,255,384 Plus:
write-off of debt issuance costs 220,210 - Plus: depreciation and
amortization 4,520,471 2,649,480 EBITDA $8,167,925 $6,826,483
Reconciliation of net earnings before non-recurring items to Net
Income Net Income $1,301,138 $2,921,619 Per share $0.14 $0.31 Plus:
Excess dry-dock off-hire 1,106,727 - Plus: Costs related to change
of managers 687,530 - Plus: write-off of debt issuance costs
220,210 - Plus: Lost income related to late delivery of two vessels
acquired in July 2006 450,000 - Net earnings before non-recurring
items $3,765,605 $2,921,619 Per share $0.40 $0.31 Appendix 2 Nine
months financial summary for the period ended September 30th, 2006
and 2005 (US$): 9 months ended 9 months ended 30-Sep-2006
30-Sep-2005 Charterhire and Other Income $34,102,754 $25,664,119
Net Income $7,035,902 $7,830,373 Net Income per share $0.74 $0.75
Reconciliation of net earnings before non-recurring items to Net
Income Net Income $7,035,902 $7,830,373 Per share $0.74 $0.75 Plus:
Excess dry-dock off-hire 1,790,886 - Plus: Costs related to change
of managers 687,530 - Plus: write-off of debt issuance costs
220,210 - Plus: Lost income related to late delivery of two vessels
acquired in July 2006 450,000 - Net earnings before non-recurring
items $10,184,528 $7,830,373 Per share $1.08 $0.75 DATASOURCE: MC
Shipping Inc. CONTACT: Alexander Gorchakov of MC Shipping Inc.,
+377 97 97 49 90, ; or Thomas J. Rozycki, Jr., Investor Relations
of Cubitt Jacobs & Prosek Communications, +1-212-279-3115 x208,
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