Investor Relations
Green Reefers ASA
Consolidated report 3rd quarter 2011
· EBITDA at USDM -5.7 (USDM -1.7) in 3Q.
· Spot rates in the quarter significant lower than corresponding period last year.
· Operating expenses continuing a decreasing trend.
After ending the quarter:
· Establishment of new pool, GreenSea Pool, close down of Hamburg Reefer Pool
· Strengthened cash position through sale and leaseback of 6 vessels.
Results 3rd Quarter 2011
The group experienced a pre-tax result of USDM -8.9 in 3Q 2011 (USDM -11.4).
Figures of operating income are not comparable with 2010 as main principle for reporting of operating income has changed due to various pool arrangements in which the Group joined during 2010. Operating income is at present reported as net pool income after deduction of voyage related costs. The net operating income was USDM 12.5 in 3Q 2011 (USDM 19.2).
Operating result before depreciation (EBITDA) was USDM -5.7 (USDM -1.7).
Depreciations in the quarter are USDM -4.7 (USDM -6.4). The decrease is mainly due to reduced number of vessels, reduced docking expenses and higher remaining value of the fleet due to increased steel prices.
Throughout the quarter spot rates below the level of the last seven years have been experienced. We have to go back to 2001 - 2003 to find equally low level of spot rates. As the majority of the Group's vessels are fixed for spot voyages, the gross freight income is all time low. This is mainly due to lack of cargo, fish in particular, which is the main cargo for Green Reefers. The extensive competition from refrigerated containers has also resulted in increased pressure on the rates.
Continued high bunker prices and the weak market have a negative effect on the Group's cash flow.
Unplanned technical off-hire (0.6%) was lower this quarter compared to the same period last year (1.5%). Third quarter operational cost for the vessels was USD 4,953 per day, also down compared with second quarter and the same period last year (USD 5,393 per day). 5 dockings were finalized during third quarter and 3 dockings were ongoing at the end of the quarter, compared with 3 finalized and 2 ongoing dockings in the same period last year.
Activities
Green Reefers owns 26 vessels at the end of the quarter. In addition, four vessels are hired on bareboat and two vessels on time charter. The commercial activities are carried out by Silver Green AS (six vessels), Seatrade Reefer Chartering N.V. (six vessels) and Hamburg Reefer Pool N.V. (20 vessels).
After ending the quarter, 6 vessels have been sold to the company's major shareholder. Concurrently with the sale, agreements regarding leaseback on bareboat-charterparties were entered for a period of 7 years. The transaction was authorized at an extraordinary general meeting 20 October. After the sale, Green Reefers owns 20 vessels and leases 12, of which 10 on bareboat and 2 on time charter.
Finance and capital structure
Interest-bearing debt totals USDM 130.3 as of 30 September 2011 (USDM 153.2). Of the group's debt, 87 % is in USD and 13 % in EUR. Cash deposit was USDM 11.1 (USDM 15.1) by the end of 3rd quarter.
Booked equity 30 September 2011 was USDM 46.1 (USDM 90.4). Equity ratio was 24% (36%).
In total, the Group has increased it's cash deposit by USDM 12 from the sale of 6 vessels, cf above. Of this, USDM 6 is received during the quarter and USDM 6 after the quarter. As part of the transaction a repayment of USDM 24 on the mortgage loan took place. The transaction also involves an agreement with the company's mortgage banks regarding postponement of instalments until December 2013.
Subsequent events
Green Reefers ASA and the Seatrade Group of Companies have entered into an agreement for the establishing of GreenSea Pool. The company will operate 48 vessels whereof 20 controlled by Green Reefers. GreenSea Pool will continue a large part of the activity presently carried out by Hamburg Reefer Pool. The new pool will offer high quality transport solutions by smaller vessels at competitive terms.
The chartering activity and marketing will be carried out by the newly established GreenSea Chartering with office in Antwerp. Green Reefers shareholding will be 50% in both GreenSea Pool and GreenSea Chartering.
The Market and prospects
Traditionally, 3rd quarter is the weakest in the reefer industry. This year the market has been lower than for several years. As a consequence, so far 41 vessels have been sold for demolishing this year and additional vessels are in lay-up. It is expected that total scrapping in 2011 will exceed last year.
The very weak marked in 3rd quarter is explained by lack of cargo in general and fish in particular. Less quotas / catches, both in Norway and by the coast of West-Africa has brought less demand for reefer tonnage. In addition, the competition from reefer containers is increasing in all segments.
Future development for the Group will in high degree depend on the quantities of fish and fish quotas. The Group is also exposed to the development in Eastern Europe and Russia, markets which traditionally have a demand for specialized reefer tonnage, so also the Mediterranean countries. The Group now enters what normally is a peak season for the industry, and it is expected that the marked will improve during the next months.
Bergen, 17 of November 2011
Green Reefers ASA