OceanFreight Inc. (NASDAQ: OCNF) (the "Company"), a global provider
of marine transportation services, today announced its financial
results for the three months ended September 30, 2011.
Financial Highlights
For the three months ended September 30, 2011, the Company
reported a Net Loss of $19.2 million, or basic and diluted earnings
equal to a loss of $3.23 per share. Included in these results are
non-recurring costs associated with the proposed merger with a
subsidiary of Dryships Inc. of $20.5 million.
Excluding this non-recurring costs, Net Income for the three
months ended September 30, 2011 was $1.3 million, or basic and
diluted earnings equal to $0.22 per share.
Third Quarter 2011 Results
For the three months ended September 30, 2011, the Company
reported Voyage Revenues of $13.1 million, Operating Loss of $18.3
million and Net Loss of $19.2 million. During the same period, Net
cash provided by operating activities was $4.8 million and Adjusted
EBITDA was a loss of $7.9 million. Please see the reconciliation of
Adjusted EBITDA to net cash provided by operating activities
below.
The Company owns a fleet of eleven vessels, comprised of six
drybulk vessels (four Capesize and two Panamaxes) and five under
construction Very Large Ore Carriers (VLOC). The fleet has a
combined deadweight tonnage of about 1.9 million tons. During the
three months ended September 30, 2011, the Company operated an
average of six drybulk vessels that earned an average time charter
equivalent rate, or TCE, of $23,287 per day.
Fleet Data
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Three Months Ended
September 30,
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2010 2011
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Average number of vessels (1) 12 6
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Total voyage days for fleet (2) 1,063 534
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Total calendar days for fleet (3) 1,104 552
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Time charter equivalent rate (TCE) (4) $ 22,097 $ 23,287
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Fleet utilization (5) 96.3% 96.7%
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(1) Average number of vessels is the number of vessels that comprised
our operating fleet for the relevant period, as measured by the
sum of the number of days each vessel was a part of our fleet
during the period divided by the number of calendar days in that
period.
(2) Total voyage days for fleet are the total days the vessels were in
our possession for the relevant period net of off-hire.
(3) Calendar days are the total days our operating vessels were in our
possession for the relevant period including off-hire days.
(4) Time charter equivalent rate, or TCE, is a measure of the average
daily revenue performance of a vessel on a per voyage basis. Our
method of calculating TCE is consistent with industry standards
and is determined by dividing gross revenues (net of voyage
expenses) by voyage days for the relevant time period. Voyage
expenses primarily consist of port, canal and fuel costs that are
unique to a particular voyage, which would otherwise be paid by
the charterer under a time charter contract, as well as
commissions. TCE is a standard shipping industry performance
measure used primarily to compare period-to-period changes in a
shipping company's performance despite changes in the mix of
charter types (i.e., spot charters, time charters and bareboat
charters) under which the vessels may be employed between the
periods.
(5) Fleet utilization is the percentage of time that our vessels were
available for revenue generating voyage days, and is determined by
dividing voyage days by fleet calendar days for the relevant
period.
The following table reflects the calculation of the TCE for the
periods then ended:
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(Dollars in thousands, except Average Three Months Ended
Daily results - unaudited) September 30,
----------------------------------------------------------------------------
2010 2011
----------------------------------------------------------------------------
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Voyage revenue 24,784 13,149
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Voyage expenses (1,295) (714)
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Revenue on a time charter basis 23,489 12,435
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Total voyage days for fleet 1,063 534
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Time charter equivalent (TCE) rate $ 22,097 $ 23,287
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Financial Statements The following are the
Company's Consolidated Statements of Operations for the three
months ended September 30, 2010 and 2011:
Three Months Ended
September 30,
----------------------------
(Dollars in thousands, except for share
and per share data)
2010 2011
----------- -----------
STATEMENT OF OPERATIONS DATA (unaudited) (unaudited)
------------------------------------------
Voyage revenues $ 24,784 $ 13,149
Loss on forward freight agreements (124) -
----------- -----------
Gross revenue 24,660 13,149
Voyage expenses (1,295) (714)
Vessels operating expenses (10,113) (4,575)
Depreciation (6,979) (4,162)
General and administrative expenses (1,415) (21,417)
Survey and drydocking costs (448) (590)
Loss on sale of vessels and vessels held
for sale (63,854) -
----------- -----------
Operating loss (59,444) (18,309)
=========== ===========
Interest income 6 57
Interest expense and finance costs (862) (659)
Loss on derivative instruments (2,734) (315)
----------- -----------
Net loss $ (63,034) $ (19,226)
=========== ===========
Loss per common share, basic and diluted $ (16,32) $ (3,23)
Weighted average number of common shares,
basic and diluted (1) 3,863,333 5,946,180
(1) The weighted average number of common shares gives effect to the 1:20
reverse stock split which took place on July 6, 2011.
The following are the Company's Consolidated Balance Sheets as
of December 31, 2010 and September 30, 2011:
(Dollars in thousands, except per share
data)
2010 2011
------------ ------------
ASSETS (audited) (unaudited)
----------------------------------------
CURRENT ASSETS:
Cash and cash equivalents $ 9,549 $ 11,034
Vessels held for sale 88,274 -
Other current assets 11,931 4,365
------------ ------------
Total current assets 109,754 15,399
------------ ------------
FIXED ASSETS, NET:
Vessels under construction 46,618 95,329
Vessels, net of accumulated 311,144 298,908
depreciation
Other, net of accumulated depreciation 597 418
------------ ------------
Total fixed assets, net 358,359 394,655
------------ ------------
OTHER NON-CURRENT ASSETS
Restricted cash 5,511 3,011
Other non -current assets 5,239 5,372
------------ ------------
Total assets 478,863 418,437
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
----------------------------------------
CURRENT LIABILITIES:
Current portion of long-term debt 82,331 26,524
Other current liabilities 28,980 30,891
------------ ------------
Total current liabilities 111,311 57,415
------------ ------------
NON-CURRENT LIABILITIES:
Derivative liability, net of current 4,875 2,427
portion
Long-term debt, net of current portion 127,441 111,187
------------ ------------
Total non-current liabilities 132,316 113,614
------------ ------------
STOCKHOLDERS' EQUITY: 235,236 247,408
------------ ------------
Total liabilities and stockholders'
equity 478,863 418,437
============ ============
Adjusted EBITDA Reconciliation
The Company considers EBITDA to represent net income before
interest, taxes, depreciation and amortization. Adjusted EBITDA
excludes loss on sale of vessels and impairment on vessels. EBITDA
and Adjusted EBITDA do not represent and should not be considered
as an alternative to net income or cash flow from operations, as
determined by U.S. GAAP and our calculation of EBITDA may not be
comparable to that reported by other companies. Adjusted EBITDA is
included in this earnings release because it is a basis upon which
we assess our liquidity position, because it is used by our lenders
as a measure of our compliance with certain loan covenants and
because we believe that it presents useful information to investors
regarding our ability to service and/or incur indebtedness. The
following table reconciles Net cash provided by operating
activities to EBITDA as adjusted for the effect of the loss from
the sale of vessels and impairment loss:
Three Months Ended September 30,
(amounts in thousands of U.S. dollars) 2010 2011
-------------- --------------
Net cash provided by operating
activities 8,043 4,782
Net increase/(decrease) in operating
assets (8,315) (597)
Net (increase)/decrease in operating
liabilities 9,163 (14,412)
Net interest expense (*) 2,764 2,387
Amortization of deferred financing
costs included in interest expense (130) (71)
-------------- --------------
Adjusted EBITDA 11,525 (7,911)
============== ==============
(*) Net interest expense includes the realized loss of interest rate swaps
included in "Loss on interest rate swaps" in the interim consolidated
unaudited statements of operations.
Fleet List
The table below describes our fleet and current employment
profile as of the date of this report:
Gross
Rate
Year Current per Earliest Latest
Vessel Name Built DWT Type Employment Day Redelivery Redelivery
------------- ----- ------- -------- ---------- ------ ---------- ----------
Drybulk
Vessels
-------------
M/V Robusto 2006 173,949 Capesize TC 26,000 Aug-14 Mar-18
M/V Cohiba 2006 174,200 Capesize TC 26,250 Oct-14 May-18
M/V
Montecristo 2005 180,263 Capesize TC 23,500 May-14 Jan-18
M/V Partagas 2004 173,880 Capesize TC 27,500 Jul-12 Dec-12
M/V Topeka 2000 74,710 Panamax TC 15,000 Jan-12 Apr-13
M/V Helena 1999 73,744 Panamax TC 32,000 May-12 Oct-16
Vessels to be
Acquired
-------------
Newbuilding
VLOC #1 (1) 2012 206,000 Capesize TC 25,000 Apr-15 Apr-20
Newbuilding
VLOC #2 (2) 2012 206,000 Capesize TC 23,000 Aug -17 Aug -22
Newbuilding
VLOC #3 (3) 2012 206,000 Capesize TC 21,500 Oct-19 Oct-26
Newbuilding
VLOC #4 2012 206,000 Capesize Spot
Newbuilding
VLOC #5 2013 206,000 Capesize Spot
(1) Upon delivery of the vessel, which is expected in the first quarter of
2012, it is scheduled to commence time charter employment for a minimum
period of three years at a gross daily rate of $25,000.
(2) Upon delivery of the vessel, which is expected in the second quarter of
2012, it is scheduled to commence time charter employment for a minimum
period of five years at a gross daily rate of $23,000. In addition, the
time charter contract provides for a 50% profit sharing arrangement
when the daily Capesize average time charter rate is between $23,000
and $40,000 per day.
(3) Upon delivery of the vessel, which is expected in the fourth quarter of
2012, it is scheduled to commence time charter employment for a minimum
period of seven years at a gross daily rate of $21,500. In addition,
the time charter contract provides for a 50% profit sharing arrangement
when the daily Capesize average time charter rate is between $21,500
and $38,000 per day.
About OceanFreight Inc.
The Company is an owner and operator of drybulk vessels that
operate worldwide. The Company owns a fleet of eleven vessels,
comprised of six drybulk vessels (four Capesize and two Panamaxes)
and five newbuilding Very Large Ore Carriers (VLOC) with a combined
deadweight tonnage of about 1.9 million tons.
The Company's common stock is listed on the NASDAQ Global Market
where it trades under the symbol "OCNF." Visit our website at
www.oceanfreightinc.com.
Forward-Looking Statement
Matters discussed in this release may constitute forward-looking
statements. Forward-looking statements reflect our current views
with respect to future events and financial performance and may
include statements concerning plans, objectives, goals, strategies,
future events or performance, and underlying assumptions and other
statements, which are other than statements of historical
facts.
The forward-looking statements in this release are based upon
various assumptions, many of which are based, in turn, upon further
assumptions, including without limitation, management's examination
of historical operating trends, data contained in our records and
other data available from third parties. Although the Company
believes that these assumptions were reasonable when made, because
these assumptions are inherently subject to significant
uncertainties and contingencies which are difficult or impossible
to predict and are beyond our control, the Company cannot assure
you that it will achieve or accomplish these expectations, beliefs
or projections.
Important factors that, in our view, could cause actual results
to differ materially from those discussed in the forward-looking
statements include the strength of world economies and currencies,
general market conditions, including changes in charter hire rates
and vessel values, changes in demand that may affect attitudes of
time charterers to scheduled and unscheduled drydocking, changes in
the Company's operating expenses, including bunker prices,
dry-docking and insurance costs, or actions taken by regulatory
authorities, potential liability from pending or future litigation,
domestic and international political conditions, potential
disruption of shipping routes due to accidents and political events
or acts by terrorists.
Please see the Company's filings with the Securities and
Exchange Commission for a more complete discussion of these and
other risks and uncertainties. The information set forth herein
speaks only as of the date hereof, and the Company disclaims any
intention or obligation to update any forward-looking statements as
a result of developments occurring after the date of this
communication.
Investor Relations/Media: Nicolas Bornozis Capital Link,
Inc. (New York) Tel: +1-212-661-7566 E-mail:
oceanfreight@capitallink.com
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