IMSK - 1st Quarter 2010
(Thomson Reuters ONE) -
The I.M. Skaugen Group (IMSK) today announces a negative result for the first
quarter of 2010.
The pre-tax result was negative USD 4.2 million for the 1Q10 compared to a
positive USD 0.2 million for the 1Q09. The result of the 1Q10 on an EBITDA basis
was USD 4.4 million compared to USD 7.4 million for the 1Q09.
Our views on the performance of the company in the first quarter of 2010
We are not satisfied with posting a negative result for the quarter, but note
that companies with a higher percentage of its ships exposed to the prevailing
spot markets are under much greater pressure given the current market
conditions. In that context we are very pleased with the strategic initiatives
made over many years securing a larger part of our gas carrier fleet on long
term contracts and specially with the key Middle East based exporters; clients
which are enjoying a much higher profitability than their competitors due to the
low cost of feedstock, lower construction cost and the use of best available
technology.
The underlying operating performance of the company and its business units are
basically unchanged from the performance of 4Q09, when we exclude the year- end
adjustments and currency gain/losses. On a general basis the operating
performance of Norgas is somewhat better than in 4Q09 and the trend is positive.
The results of Norgas are negatively affected by the performance of our new gas
and chemical carriers (the Wintergas concept ships); these innovative ships has
had a difficult time to enter the markets for chemical cargoes and have had to
perform more or less in the North East Asian spot market for gas carriers. The
spot markets for these types of cargoes are quite poor in this geographical
region. Thus we are very pleased that the bulk of the Norgas fleet is operating
under our contracts.
SPT operating performance is down and mainly due to expiring contracts that has
to be renewed with contracts that yield a lower margin due to the tanker markets
in general.
The performance of the IMS China Activities is basically unchanged, but also
here the trend going forward is positive for the key operating units.
During the first quarter the price of petrochemical commodities jumped to levels
not seen in nearly one and a half years, in further evidence of the Asian-led
recovery in manufacturing activity. The surge in petrochemical demand signals
that a cyclical recovery for the broader economy is developing.
We foresee that the year of 2010 for our company will be negatively affected by
a need to renew expiring contracts, in general on lower levels than the expiring
contracts. We thus see a challenge to remain in the "black" for the company as a
whole in 2010. This is a result of the "output gap" where the transportation
capacity has been growing quicker than demand, and the demand dropped due to the
finance crisis and the "Great Recession" lasting perhaps from 2Q08 and through
to 2Q09. The current very positive economic and trade developments in the world
will not be sufficient to eliminate this "output gap" in 2010. The exception
here is probably our activities in China that are at the moment in a very
positive trend when it comes to contract renewal levels as well.
For gas carriers, the deliveries of newbuildings in the Semi - Refrigerated gas
carrier segment over the year, has increased the gap between supply and demand
of tonnage for our fleet of ships. This leads to lower utilization levels in
general and a softer spot market for ships. In this context we are pleased about
the very high utilization of the Norgas ships with little idle time. This
"output gap" is likely to be high in 2010. We also see the estimated newbuilding
prices being lower or about 20 - 25 % down from its peak in 2008 (8 000 cbm
ethylene gas carrier).
The rise of the East - IM Skaugen enters into new areas
The IMS group of companies continues to peruse its long term strategy of being a
global company, with focus on marine transport niches in growth markets,
leveraging our business units towards Emerging Markets. Of the Emerging Markets
we have placed special emphasis on opportunities "East of Suez". In the
aftermath of the financial crisis of 2008 the global economy has accelerated a
development of a two-tiered growth; the "advanced economies" is more saddled
with debt and higher unemployment, while many Asian countries (and especially
China) is experiencing stronger growth on the back of key structural drivers;
industrialization, urbanization and globalization. In this perspective we are
very pleased that SPT is now also expanding their business into the Gulf or GCC
region, announcing two new events. One is the establishment of a company in UAE
for lightering support services and one LNG port management agreement in the GCC
region. SPT is growing its global support services with a strong focus on cost
and service leadership, enabling the division to gain market shares and deliver
a significant part of SPT's overall profits, thus offsetting the effect of the
weak crude oil tanker markets.
Delivery of Norgas Innovation - One step closer to realize the "Small Scale LNG
concept"
In January the company reached another milestone, as our first "Multigas" gas
carrier was delivered from our Chinese "EPCS" contractor; Skaugen Marine
Construction or "SMC" (Ships More Competitive). The 10,000 cbm sized vessel,
named "Norgas Innovation", has entered the pool of Norgas and is now trading
with Ethylene from the GCC region to Asia, and during the quarter it has made
its first successful voyages. However, this first Multigas vessel is intended to
be dedicated to service Nordic LNG (www.nordiclng.com
Mini LNG business in Scandinavia. Our J/V partners in the Nordic LNG project is
Skangass AS and this company has undergone a restructuring of its capital base
and the main partner; Lyse Energi (www.lyse.no
enabled the Skangass company to build a better and longer term capital base.
This should allow Skangass to complete the LNG liquefaction plant in Stavanger
and to shoulder a start up period better. This should also allow Nordic LNG AS
to develop better and closer to the expectations we have had for the project.
Nordic LNG is a sales and marketing as well as distribution/logistic company
without any infrastructure related assets on its balance sheet. The book value
of our investment in this concept is approximately USD 0.5 mill and this is
against 40 % of the shares in Nordic LNG AS that we own.
[HUG#1404289]
IMSK 1 Quarter 2010: http://hugin.info/179/R/1404289/358387.pdf
Unternehmensinformation / Kurzprofil:
Datum: 15.04.2010 - 18:40 Uhr
Sprache: Deutsch
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