GPRT.L Regulatory News (GPRT)

Goldenport Holdings Inc.

Athens, 30 August 2013

Interim Results for the Six Months Ended 30 June 2013

Goldenport Holdings Inc. ("Goldenport" or "the Company"), (LSE: GPRT) the international shipping company that owns and operates a fleet of container and dry bulk vessels, announces today its Interim Results for the six months ended 30 June, 2013.

Financial Highlights (amounts in US$ '000 except per share data):

§ Revenue of US$ 31,126, -27.5% decrease (2012: US$ 42,909)

§ EBITDA of US$ 8,650, -40.6% decrease (2012: US$ 14,556)

§ Net Loss of US$ 8,310 (2012: Net Loss of US$ 51,331)

§ Loss per Share of US$ 0.089 (2012: Loss per share US$ 0.56)

§ Total cash at 30 June 2013 of US$ 17,741 (31 December 2012: US$ 22,789)

§ Debt repayment of US$11,905 (2012: US$28,698)

§ Net debt to book capitalisation as of 30 June 2013, 49% (31 December 2012: 49%)

§ No impairment loss for 2013

§ In compliance with all financial covenants

CEO Statement:

John Dragnis, Chief Executive Officer of the Company commented:

Trading during the first half of 2013 continued to be challenging. For the period ended 30 June 2013, the Company reported a 27.5% decline in revenues, reflecting a drop in time charter equivalent rates that coincided with the expiry of our last remaining long-term time charter agreements, and a decrease in the average number of vessels. The company reported a 40.6% drop in EBITDA to US$ 8,650 and a net loss of US$8,310 or US$ 0.089 per share.

Confidence in the business, political and financial environment is improving, but the new-building overhang in both the dry cargo and container sectors remains significant. In anticipation of a recovery, we have opted to employ our fleet under 3-6 month time charter agreements. As a result, the Company continued to successfully employ its vessels and to maintain high utilisation of the fleet, albeit at lower rates. Asset values appear to have turned a corner and are slowly beginning to rise in anticipation of a future recovery in freight rates. In a gradually improving market environment, our high utilisation levels combined with lower operating costs will enable us to fully benefit from the eventual market recovery.

In terms of our fleet profile, we once again took advantage of high scrap prices to continue our strategy of fleet renewal by disposing of older tonnage and utilized part of the cash proceeds to acquire a younger vessel and to further reduce our debt. The weighted average age of our dry bulk fleet dropped to 4 years. We are now exploring fleet renewal opportunities in the container and dry-bulk sectors, targeting high-quality second-hand vessels at attractive prices.

Having concluded the amendment of our loan agreements in early 2013, we are confident that we are well positioned to take advantage of the eventual market recovery.

Fleet Developments:

Acquisition:

On 12 April 2013, the Company took delivery of M/V Thasos, a 1998-built container of 2,452 TEU, which was acquired for US$6,010, including bunkers that remained on board at the delivery of the vessel.

Disposals:

On 24 April 2013, the Company agreed the sale of the 3,007 TEU, 1992-built vessel "MSC Scotland", to an unaffiliated third party. The sale was concluded at a net consideration of US $6,155 cash and the vessel was delivered to the new owners on 14 May 2013. At the delivery date, M/V MSC Scotland had a net carrying value US $8,189. A commission of 3% on the gross consideration was paid for this disposal. The loss resulting from the sale of the vessel was US$ 2,034 and is included in the interim consolidated statement of comprehensive income.

On 2 August 2013, the Company agreed the sale of the 152,065 DWT, 1990-built vessel "Vasos", to an unaffiliated third party. The sale was concluded at a net consideration of US$ 7,310 cash and the vessel was delivered to the new owners on 20 August 2013. At the delivery date, vessel Vasos had a net carrying value of US$ 7,208. A commission of 3% on the gross consideration was paid for this disposal. The expected profit resulting from the sale of the vessel is US$ 102 and will be included in the consolidated statement of comprehensive income for the year ending 31 December 2013.

Today the fleet consists of 19 vessels, of which 10 are container vessels and 9 dry bulk carriers.

Operational Fleet Forward Coverage:

The percentage of available days of the fleet already fixed under contracts as of 29 August 2013, assuming the earliest charter expiration, is as follows:

(1) Percentage of available days of the fleet fixed under contract as reported on 24 July 2013, being the date of the previous trading update, is given in brackets

Conference Call and Webcast:

The Company's management will hold a conference call today Friday 30 August at 2:00 P.M. (BST), 4:00 P.M. (Athens), 9:00 A.M. (EDT), to discuss the results.

Conference Call details: 

Participants should dial into the call 10 minutes prior to the scheduled time using the following numbers: 0800-953-0329 (from the UK), 1-866-819-7111 (from the US) or +44 (0)1452-542-301 (all other callers). Please quote "Goldenport Holdings" to the operator.

A telephonic replay of the conference call will be available until 6 September 2013 by dialling 0800-953-1533 (from the UK), 1-866-247-4222 (from the US) or +44 (0)1452-550-000 (all other callers). Access Code: 6906584#

Slides and Audio Webcast:

There will also be a live and then archived webcast of the conference call, accessible through the Goldenport Holdings website (www.goldenportholdings.com). Participants to the live webcast should register on the website approximately 10 minutes prior to the start of the webcast.

Enquiries:

Goldenport Holdings Inc.:

John Dragnis, Chief Executive Officer +30 210 8910 500

Alexis Stephanou, Chief Investment Officer and Head of Investor Relations +30 210 8910 542

Investor Relations Coordinators:

Capital Link:

Ioanna Messini - London +44 203 206 1322

Nicolas Bornozis - New York +1 212 661 7566

E-mail: goldenport@capitallink.com

info@goldenport.biz

Further Information:

Overview of Goldenport:

Goldenport is an international shipping company that owns and operates a fleet of container and dry bulk vessels that transport cargo worldwide. As of the day of this Press Release, the fleet consists of 19 vessels of which 10 are container vessels and 9 dry bulk carriers. Goldenport is listed on the London Stock Exchange under the ticker GPRT.

Website: www.goldenportholdings.com or www.goldenport.biz

Current Market Outlook:

Containerships:

As of August 2013, the worldwide containership fleet reached the 17 million TEU mark in terms of capacity (16 million as of August 2012). The average age of the container fleet, as at the beginning of August, is approximately 11 years.

The new-building market remained active so far in 2013 with 125 new orders placed (987,000 TEU capacity). In August 2013 the orderbook stood at 3.43 million TEU / 459 vessels (around 20% of the existing fleet in TEU terms) for delivery within the next 1-2 years. Based upon current schedules, 2013 new-building deliveries are estimated at 1.7 million TEU or 10% of the existing fleet with 86% of the contracted capacity in 2013 in the 8,000 plus TEU class.

Time charter rates for the Panamax sizes and below are still under pressure. However, with a declining fleet of sub-4,000 TEU tonnage, there may be a point when carriers decide they can no longer risk picking up their required seasonal units in the spot market and revert to longer-term employment to safeguard supply.

With the estimated expansion of the container fleet in 2013 of 8% (after allowing for scrapping) expected to exceed the estimated growth in demand in 2013 of 5%, the outlook for freight rates in this sector will remain challenging. We are confident that the container sector will recover due to the increased scrapping activity in the sector and the strengthening of demand, but the increased new-building order book makes the timing of this recovery difficult to predict.

Dry Bulk Carriers:

As of August 2013, the worldwide dry bulk carrier fleet of vessels in excess of 10,000 DWT comprised 9,728 vessels representing approximately 706 million DWT (665 million DWT as of August 2012). So far in 2013 around 15.3 million DWT of dry cargo vessels have been scrapped compared to new-building deliveries of 40.5 million DWT.

New-building tonnage on order at the beginning of August 2013 is 1,582 vessels representing approximately 126 million DWT which constitutes approximately 18% of the world's existing fleet by DWT. There are 252 Capesize, 453 Panamaxes and Post-Panamaxes, 515 Supramax/Handymaxes and 362 Handysize scheduled for delivery between 2013 and 2015.

With the large number of new-building orders being placed this year and global industrial production still recovering, the outlook for the dry bulk market, is similar to that for the container sector.

Summary of Selected Financial and Operating Data:

See Appendices, for Notes on the Summary of Selected Financial and Operating Data, for forward looking statements, for detailed Fleet Employment profile and for Financial Statements.

Financial review (amounts in US$ '000, except the per day Opex data):

Time and Voyage Charter Revenues: Revenues decreased by US$ 11,783 or 27.5% to US$ 31,126 for the six months ended 30 June 2013 (2012: US$ 42,909). The main reasons for this decrease were: (i) the difference in time charter equivalent rate between the two periods (2013: US$ 7,935; 2012: US$ 8,841), as a result of the average time charter rates prevailing at the market during the first half of 2013 and (ii) the decreased average number of vessels.

Voyage expenses total: Voyage expenses decreased by US$ 2,524 or 47.2% to US$ 2,821 for the period ended 30 June 2013 (2012: US$ 5,345) mainly due to the decrease of ballast voyage costs.

Vessel operating expenses: Vessel operating expenses decreased by US$ 2,888 or 15.1% to US$ 16,224 for the six months ended 30 June 2013 (2012: US$ 19,112) as a result of the decreased average number of vessels.

Depreciation: The vessels' depreciation charge decreased by 43.2% to US$ 10,871 for the six months ended 30 June 2013 (2012: US$ 19,129) mainly as a result of: (i) the decreased average number of vessels and (ii) the revised accounting estimate on depreciation scrap rate at US$ 0.25 per ton as compared to US$ 0.18 per ton estimated for 2012.

Depreciation of dry-docking costs: Depreciation of dry-docking costs decreased by 66.8% to US$ 749 for the six months ended 30 June 2013 (2012: US$ 2,256), reflecting the decreased dry-docking activity. For the 6 months period ended 2013, 3 vessels commenced or completed dry-dockings (5 for the period ended 30 June 2012).

Financing costs: Interest expense decreased by US$ 924 or 23.27% to US$ 3,046 for the six months ended 30 June 2013 (2012: US$ 3,970), reflecting the decreased aggregate loan balance following the normal debt repayments as well as debt prepayments associated with the disposal of vessels.

Cash and cash equivalents: The Company as of 30 June 2013 had US$ 12,598 of cash and cash equivalents (31 December 2012: US$ 16,775).

Restricted Cash: The restricted cash of US$ 5,143 as at 30 June 2013 (US$ 6,014 as at 31 December 2012) relates to cash restricted in use by the financing banks subject to the rectification and/or fulfilment of certain financial covenant ratios and/or other terms. An amount of US$ 1,143 was released subsequent to period end and applied towards the outstanding balance of principal and interest accrued as of the date of the release. The remaining amount of US$ 4,000 was agreed to be progressively released and applied towards the outstanding debt of the respective financing bank.

APPENDIX 1:

Notes on Summary of Selected Financial and Operating Data:

(1) Average number of vessels is the number of vessels that constituted our 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 the period.

(2) Ownership days are the aggregate number of days in a period during which each vessel in our fleet has been owned by us. Ownership days are an indicator of the size of our fleet over a period and affect both the amount of revenues and the amount of expenses that we record during a period.

(3) Available days are the number of our ownership days less the aggregate number of days that our vessels are off-hire due to scheduled repairs or repairs under guarantee, vessel upgrades or special surveys and the aggregate amount of time that we spend positioning our vessels. The shipping industry uses available days to measure the number of days in a period during which vessels should be capable of generating revenues.

(4) Operating days are the number of available days in a period less the aggregate number of days that our vessels are off-hire due to any reason, including unforeseen circumstances. The shipping industry uses operating days to measure the aggregate number of days in a period during which vessels actually generate revenues.

(5) We calculate fleet utilisation by dividing the number of our operating days during a period by the number of our available days during the period. The shipping industry uses fleet utilisation to measure a company's efficiency in finding suitable employment for its vessels and minimising the amount of days that its vessels are off-hire for reasons other than scheduled repairs or repairs under guarantee, vessel upgrades, special surveys or vessel positioning.

(6) Daily vessel operating expenses, which include crew wages and related costs, the cost of insurance, expenses relating to repairs and maintenance, the costs of spares and consumable stores, tonnage taxes and other miscellaneous expenses, are calculated by dividing vessel operating expenses by ownership days for the relevant period.

(7) TCE rates are defined as our time and voyage charter revenues less voyage expenses during a period divided by the number of our available days during the period, which is consistent with industry standards. Voyage expenses include port charges, bunker (fuel oil and diesel oil) expenses, canal charges and commissions. TCE rate is a standard shipping industry performance measure used primarily to compare daily earnings generated by vessels on time charters with daily earnings generated by vessels on voyage charters, because charter hire rates for vessels on voyage charters are generally not expressed in per day amounts while charter hire rates for vessels on time charters are generally expressed in such amounts.

(8) Net debt to book capitalisation is defined as total debt minus cash over the carrying amount of vessels, and vessel held for sale.

APPENDIX 2:

Forward-Looking Statement

Matters discussed in this release may constitute forward-looking statements. Forward-looking statements reflect the current views of Goldenport Holdings Inc. ("the Company") 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 dry-docking, 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. The Company does not assume, and expressly disclaims, any obligation to update these forward-looking statements.

This press release is not an offer of securities for sale in the United States. The Company's securities have not been registered under the U.S. Securities Act of 1933, as amended, and may not be offered or sold in the United States or to a U.S. person absent registration pursuant to, or an applicable exemption from, the registration requirements under U.S. securities laws.

APPENDIX 3:

Fleet Employment Profile:

APPENDIX 4:

Goldenport Holdings Inc.

Interim Condensed Consolidated Financial Statements

for the period ended 30 June 2013

Report on review of interim condensed consolidated

financial statements to the shareholders of Goldenport Holdings Inc.

Introduction

We have reviewed the accompanying interim condensed consolidated financial statements of Goldenport Holdings Inc. and its subsidiaries ("the Group") as at 30 June 2013, comprising of the interim consolidated statement of financial position as at 30 June 2013 and the related interim consolidated statements of comprehensive income, changes in equity and cash flows for the six-month period then ended and explanatory notes. Management is responsible for the preparation and presentation of these interim condensed consolidated financial statements in accordance with IAS 34 Interim Financial Reporting (IAS 34). Our responsibility is to express a conclusion on these interim condensed consolidated financial statements based on our review.

Scope of review

We conducted our review in accordance with International Standards on Review Engagements 2410, "Review of Interim Financial Information Performed by the Independent Auditor of the Entity". A review of interim financial information consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing. Consequently, it does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

Conclusion

Based on our review, nothing has come to our attention that causes us to believe that the accompanying interim condensed consolidated financial statements are not prepared, in all material respects, in accordance with IAS 34.

Ernst & Young (Hellas) Certified Auditors - Accountants S.A

29 August 2013

INTERIM CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

For the six months ended 30 June 2013

The accompanying notes are an integral part of these interim condensed consolidated financial statements.

INTERIM CONSOLIDATED STATEMENT OF FINANCIAL POSITION

As at 30 June 2013

The accompanying notes are an integral part of these interim condensed consolidated financial statements

INTERIM CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

For the six months ended 30 June 2013

The accompanying notes are an integral part of these interim condensed consolidated financial statements

INTERIM CONSOLIDATED STATEMENT OF CASH FLOWS

For the six months ended 30 June 2013

The accompanying notes are an integral part of these interim condensed consolidated financial statements.

1. FORMATION, BASIS OF PRESENTATION AND GENERAL INFORMATION:

Goldenport Holdings Inc. ('Goldenport' or the 'Company') was incorporated under the laws of Marshall Islands, as a limited liability company, on 21 March 2005. On 5 April 2006 Goldenport Holdings Inc. was admitted in the Official List and commenced trading on the London Stock Exchange ("LSE").

The address of the registered office of the Company is Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands MH 96960. The address of the Head Office of the Company is Status Center, 41 Athinas Avenue, 166 71 Vouliagmeni, Greece.

Goldenport as at 30 June 2013 is the majority holding Company for eighteen intermediate holding companies, each in turn owning a vessel-owning company, and the 50% holding Company of another intermediate holding company, owing two vessel owning companies, as listed in the table below (see (a) and (b) below). Also, as at 30 June 2013 Goldenport is the holding Company of a fully owned subsidiary named Goldenport Marine Services, which provides the Company and its affiliates with a wide range of shipping services, such as insurance consulting, legal, financial and accounting services, quality and safety, information technology (including software licences) and other administrative activities in exchange for a daily fixed fee per vessel. Goldenport Marine Services has been registered in Greece under the provisions of Law 89/1967.

On 24 October 2011, the Group sold 20% of the voting shares in Tuzon Maritime Company, the vessel owning company of Paris JR. This 20% is accounted for as non-controlling interest as at 30 June 2013 and 31 December 2012.

Goldenport and its subsidiaries will be hereinafter referred to as the 'Group'.

The interim condensed consolidated financial statements comprising the financial statements of the Company and its wholly owned subsidiaries, Tuzon Maritime Co, an 80% owned subsidiary (see (a) below) and the proportionally consolidated financial statements of the jointly controlled entity (see (b) below) were authorised for issue in accordance with a resolution of the Board of Directors on 29 August 2013. 

1. FORMATION, BASIS OF PRESENTATION AND GENERAL INFORMATION (continued):

a) The subsidiaries of the Company are:

1. FORMATION, BASIS OF PRESENTATION AND GENERAL INFORMATION (continued):

a) Proportionally consolidated the 50% Joint Venture (Note 6)

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

(a) Basis of preparation: The Group's interim condensed consolidated financial statements for the six months ended 30 June 2013 have been prepared using the same accounting policies (refer also to section 2(e) below) and methods of computation used in the preparation of the Group's annual financial statements for the year ended 31 December 2012. The interim consolidated financial statements are presented in US dollars and all financial values are rounded to the nearest thousand ($000), except the per share information.

(b) Statement of compliance: The interim condensed consolidated financial statements for the six months ended 30 June 2013 have been prepared in accordance with International Financial Reporting Standards applicable to interim financial reporting as adopted by the European Union (IAS 34). The interim condensed consolidated financial statements do not include all the information and disclosures required in the annual financial statements, and should be read in conjunction with the Group's annual financial statements as at 31 December 2012.

(c) Use of judgements, estimates and assumptions: The preparation of the Group's consolidated financial statements requires management to make judgments, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities, and the disclosure of contingent liabilities, at the reporting date. However, uncertainty about these assumptions and estimates could result in outcomes that require a material adjustment to the carrying amount of the asset or liability affected in future. The estimates and assumptions that have the most significant effect on the amounts recognised in the consolidated financial statements are the following:

Depreciation: Depreciation is computed using the straight-line method over the estimated useful life of the vessels, after considering the estimated residual value. Each vessel's residual value is equal to the product of its lightweight tonnage and estimated scrap rate, which until 31 December 2012, was estimated to be U.S.$180 per lightweight ton. In order to align the scrap rate estimates with the current historical average scrap rate, effective from 1 January 2013, the Company adjusted the estimated scrap rates used to calculate the vessels' residual value from U.S.$180 to U.S.$250 per lightweight ton. The impact of the increase in the estimated scrap rate is a decrease in depreciation expense going forward. The effect of this change in accounting estimates, which did not require retrospective application as per IAS 8, "Accounting Policies, Changes in Accounting Estimates and Errors," is a decrease in the net loss for the period ended 30 June 2013 by U.S.$763 or U.S.$0.0082 per share, basic and diluted. The effect on net profits for the year ending 31 December 2013 is U.S. $1,526.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued):

Provisions for doubtful trade receivables: Provisions for doubtful trade receivables are recorded based on management's expected future collectability of the receivables. (Receivables as included in the statement of financial position in trade receivables, have a carrying amount of U.S. $2,756 and U.S. $3,913 as at 30 June 2013 and 31 December 2012, respectively). Provision for doubtful accounts as at 30 June 2013 amounted to U.S. $1,024 (U.S. $ 913 as at 31 December 2012).

(d) Impairment of vessels: The Group's vessels are reviewed for impairment in accordance with IAS 36, "Impairment of Assets." Under IAS 36, the Group assesses at each reporting date whether there is an indication that a vessel may be impaired. If such an indication exists, the Group makes an estimate of the vessel's recoverable amount. Any impairment loss of the vessel is assessed by comparison of the carrying amount of the asset to its recoverable amount. Recoverable amount is the higher of the vessel's fair value as determined by independent marine appraisers less costs to sell and its value in use.

If the recoverable amount is less than the carrying amount of the vessel, the asset is considered impaired and an expense is recognised equal to the amount required to reduce the carrying amount of the vessel to its then recoverable amount.

The calculation of value in use is made at the individual vessel level since separately identifiable cash flow information is available for each vessel. In developing estimates of future cash flows, the Group makes assumptions about future charter rates, vessel operating expenses, and the estimated remaining useful lives of the vessels (see also note 5).

The projected net operating cash flows are determined by considering:

i) the time charter equivalent revenues from existing time charters for the fixed fleet days and an estimated daily time charter equivalent for the unfixed days based on average historical 10 year rates for six months time charter for each type of our bulk carrier vessels and one year time charter for each type of our container vessels over the remaining estimated useful life of each vessel, considering the vessel's age and technical specifications.

ii) an average increase of 4% per annum on charter revenues,

iii) cash inflows are considered net of brokerage, and

iv) expected outflows for scheduled vessels' maintenance and vessel operating expenses were determined assuming an average annual inflation rate of 3%.

The net operating cash flows are discounted using the Weighted Average Cost of Capital of each vessel owning company to their present value as at the date of the financial statements. 

Historical average six-month and one-year time charter rates used in our impairment test exercise are in line with our overall chartering strategy, especially in periods/years of depressed charter rates. The historical averages reflect the full operating history of vessels of the same type and particulars with our operating fleet and they cover at least a full business cycle.

The average annual inflation rate applied for determining vessels' maintenance and operating costs approximates current projections for global inflation rate for the remaining useful life of our vessels.

Effective fleet utilization is assumed at 95%, after taking into consideration the periods each vessel is expected to undergo the scheduled maintenance (dry-docking and special surveys). These assumptions are in line with the Group's historical performance and the expectations for future fleet utilization under our current fleet deployment strategy.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued):

The impairment test exercise is highly sensitive on variances in the time charter rates and fleet effective utilization. Consequently, a sensitivity analysis was performed by assigning possible alternative values to these two significant inputs.

No impairment loss was identified by the Group for the period ended 30 June 2013 (U.S. $ 47,600 as at 30 June 2012).

(e) Changes in accounting policies and disclosures:

A) The accounting policies adopted are consistent with those of the previous financial year except for the following amended IFRSs which have been adopted by the Group as of 1 January 2013:

Ø IAS 1 Financial Statement Presentation (Amended) - Presentation of Items of Other Comprehensive Income.

Ø IAS 19 Employee Benefits (Revised)

Ø IFRS 7 Financial Instruments: Disclosures (Amended) - Offsetting Financial Assets and Financial Liabilities

Ø IFRS 13 Fair Value Measurement

Ø Annual Improvements to IFRSs - 2009 - 2011 Cycle

B) Standards issued but not yet adopted

In addition to those standards and interpretations that have been disclosed in the financial statements for the year ended 31 December 2012, the following new standards, amendments to standards and interpretations have been issued but are not effective for the financial year beginning 1 January 2013 and have not yet been adopted from the Group:

· IAS 28 Investments in Associates and Joint Ventures (Revised)

The Standard is effective for annual periods beginning on or after 1 January 2014. As a consequence of the new IFRS 11 Joint arrangements and IFRS 12 Disclosure of Interests in Other Entities, IAS 28 Investments in Associates, has been renamed IAS 28 Investments in Associates and Joint Ventures, and describes the application of the equity method to investments in joint ventures in addition to associates. Management is in the process of assessing the impact from the adoption of the standard.

· IAS 32 Financial Instruments: Presentation (Amended) - Offsetting Financial Assets and Financial Liabilities

The amendment is effective for annual periods beginning on or after 1 January 2014.These amendments clarify the meaning of "currently has a legally enforceable right to set-off". The amendments also clarify the application of the IAS 32 offsetting criteria to settlement systems (such as central clearing house systems) which apply gross settlement mechanisms that are not simultaneous. Management has assessed that there is no impact on the Group's financial position.

· IFRS 9 Financial Instruments: Classification and Measurement

The new standard is effective for annual periods beginning on or after 1 January 2015. IFRS 9, as issued, reflects the first phase of the IASBs work on the replacement of IAS 39 and applies to classification and measurement of financial assets and financial liabilities as defined in IAS 39. The standard was initially effective for annual periods beginning on or after 1 January 2013, but amendments to IFRS 9 Mandatory Effective Date of IFRS 9 and Transition Disclosures, issued in December 2011, moved the mandatory effective date to 1 January 2015. In subsequent phases, the IASB will address hedge accounting and impairment of financial assets. The adoption of the first phase of IFRS 9 will have an effect on the classification and measurement of financial assets, but will not have an impact on classification and measurements of financial liabilities. The Group will quantify the effect in conjunction with the other phases, when the final standard including all phases is issued.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued):

This standard has not yet been endorsed by the EU. Management is in the process of assessing the impact from the adoption of the standard.

· IFRS 10 Consolidated Financial Statements, IAS 27 Separate Financial Statements

The new standard is effective for annual periods beginning on or after 1 January 2014 IFRS 10 replaces the portion of IAS 27 Consolidated and Separate Financial Statements that addresses the accounting for consolidated financial statements. It also addresses the issues raised in SIC-12 Consolidation - Special Purpose Entities.

IFRS 10 establishes a single control model that applies to all entities including special purpose entities. The changes introduced by IFRS 10 will require management to exercise significant judgment to determine which entities are controlled and therefore are required to be consolidated by a parent, compared with the requirements that were in IAS 27. Management has assessed that there is no impact on the Group's financial position.

· IFRS 11 Joint Arrangements

The new standard is effective for annual periods beginning on or after 1 January 2014. IFRS 11 replaces IAS 31 Interests in Joint Ventures and SIC-13 Jointly-controlled Entities - Non-monetary Contributions by Venturers. IFRS 11 removes the option to account for jointly controlled entities ("JCEs") using proportionate consolidation. Instead, JCEs that meet the definition of a joint venture must be accounted for using the equity method. Management is in the process of assessing the impact from the adoption of the standard.

· IFRS 12 Disclosures of Interests in Other Entities

The new standard is effective for annual periods beginning on or after 1 January 2014. IFRS 12 includes all of the disclosures that were previously in IAS 27 related to consolidated financial statements, as well as all of the disclosures that were previously included in IAS 31 and IAS 28. These disclosures relate to an entity's interests in subsidiaries, joint arrangements, associates and structured entities. A number of new disclosures are also required. Management is in the process of assessing the impact from the adoption of the standard.

· Transition Guidance (Amendments to IFRS 10, IFRS 11 and IFRS 12)

The guidance is effective for annual periods beginning on or after 1 January 2014. The IASB issued amendments to IFRS 10 Consolidated Financial Statements, IFRS 11 Joint Arrangements and IFRS 12 Disclosure of Interests in Other Entities. The amendments change the transition guidance to provide further relief from full retrospective application. The date of initial application' in IFRS 10 is defined as 'the beginning of the annual reporting period in which IFRS 10 is applied for the first time'. The assessment of whether control exists is made at 'the date of initial application' rather than at the beginning of the comparative period. If the control assessment is different between IFRS 10 and IAS 27/SIC-12, retrospective adjustments should be determined. However, if the control assessment is the same, no retrospective application is required. If more than one comparative period is presented, additional relief is given to require only one period to be restated. For the same reasons IASB has also amended IFRS 11 Joint Arrangements and IFRS 12 Disclosure of Interests in Other Entities to provide transition relief. Management is in the process of assessing the impact from the adoption of the standard.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued):

· Investment Entities (Amendments to IFRS 10, IFRS 12 and IAS 27)

The amendment is effective for annual periods beginning on or after 1 January 2014. The amendment applies to a particular class of business that qualify as investment entities. The IASB uses the term 'investment entity' to refer to an entity whose business purpose is to invest funds solely for returns from capital appreciation, investment income or both. An investment entity must also evaluate the performance of its investments on a fair value basis. Such entities could include private equity organisations, venture capital organisations, pension funds, sovereign wealth funds and other investment funds. Under IFRS 10 Consolidated Financial Statements, reporting entities were required to consolidate all investees that they control (i.e. all subsidiaries). The Investment Entities amendment provides an exception to the consolidation requirements in IFRS 10 and requires investment entities to measure particular subsidiaries at fair value through profit or loss, rather than consolidate them. The amendment also sets out disclosure requirements for investment entities. This amendment has not yet been endorsed by the EU. Management has assessed that there is no impact on the Group's financial position.

· IFRIC Interpretation 21: Levies

The interpretation is effective for annual periods beginning on or after 1 January 2014. The Interpretations Committee was asked to consider how an entity should account for liabilities to pay levies imposed by governments, other than income taxes, in its financial statements. This Interpretation is an interpretation of IAS 37 Provisions, Contingent Liabilities and Contingent Assets. IAS 37 sets out criteria for the recognition of a liability, one of which is the requirement for the entity to have a present obligation as a result of a past event (known as an obligating event). The Interpretation clarifies that the obligating event that gives rise to a liability to pay a levy is the activity described in the relevant legislation that triggers the payment of the levy. This interpretation has not yet been endorsed by the EU. Management has assessed that there is no impact on the Group's financial position

· IAS 36 Impairment of Assets - Recoverable Amount Disclosures for Non-Financial Assets

This amendment is effective for annual periods beginning on or after 1 January 2014. In developing IFRS 13 the IASB decided to amend IAS 36 to require the disclosure of information about the recoverable amount of impaired assets, particularly if that amount is based on fair value less costs of disposal. In particular, instead of requiring an entity to disclose the recoverable amount of an asset (including goodwill) or a cash-generating unit for which a material impairment loss was recognised or reversed during the reporting period, the amendment made to IAS 36 required an entity to disclose the recoverable amount of each cash generating unit for which the carrying amount of goodwill or intangible assets with indefinite useful lives allocated to that unit is significant in comparison with the entity's total carrying amount of goodwill or of intangible assets with indefinite useful lives. This amendment has not yet been endorsed by the EU. Management is in the process of assessing the impact from the adoption of the standard.

· IAS 39 Financial Instruments: Recognition and Measurement - Novation of Derivatives and Continuation of Hedge Accounting (amendment)

This amendment is effective for annual periods beginning on or after 1 January 2014. Under the amendment there would be no need to discontinue hedge accounting if a hedging derivative was novated, provided certain criteria are met. The IASB made a narrow-scope amendment to IAS 39 to permit the continuation of hedge accounting in certain circumstances in which the counterparty to a hedging instrument changes in order to achieve clearing for that instrument. This amendment has not yet been endorsed by the EU. Management has assessed that there is no impact on the Group's financial position.

3. VOYAGE AND VESSEL OPERATING EXPENSES:

The amounts in the accompanying consolidated statement of comprehensive income are analysed as follows:

Voyage expenses

Vessel operating expenses

4. LOSS PER SHARE:

Basic and diluted loss per share ("LPS") of U.S.$(0.089) (2012: U.S.$(0.56) is calculated by dividing the loss for the period attributable to Goldenport Holdings Inc. shareholders (U.S.$8,310 and U.S.$51,331 for the periods ended 30 June 2013 and 30 June 2012, respectively), by the weighted average number of shares outstanding (93,191,758 and 91,411,419 for the six month periods ended 30 June 2013 and 30 June 2012, respectively). The weighted average number of shares outstanding reflects the weighted average of the shares existed on 31 December 2012, since no other shares were issued within the six months period ended 30 June 2013. The weighted average number of shares outstanding as of 30 June 2012 reflects the weighted average of the shares existed on 31 December 2011 and the shares issued on 18 May 2012 relating to the share dividend programme (as approved by the AGM on 11 May 2012).

Diluted LPS reflects the potential dilution that could occur if share options or other contracts to issue shares were exercised or converted into shares.

4. LOSS PER SHARE (continued):

5. VESSELS:

Vessels consisted of the following as at 30 June 2013 and 31 December 2012:

5. VESSELS (continued):

The gross carrying amount of vessels, which have been fully depreciated to their residual value and are still in use as at 30 June 2013, was U.S. $1,534 (as at 30 June 2013 and 31 December 2012).

All of the Company's operating vessels, except for vessels Gitte and MSC Accra, having an aggregate carrying value of U.S. $5,826 as at 30 June 2013 (U.S. $19,877 as at 31 December 2012, concerning vessels MSC Accra, Thira, Paris JR and MSC Socotra), have been provided as collateral to secure the loans discussed in note 11.

Operational vessel acquisitions

On 12 April 2013, the Company took delivery of M/V Thasos, a 1998- built container of 2,452 TEU, which was acquired for U.S. $6,010, including bunkers remaining on board at the delivery of the vessel.

Disposals

On 24 April 2013, the Company agreed the sale of the 3,007 TEU, 1992-built vessel "MSC Scotland", to an unaffiliated third party. The sale was concluded at a net consideration of U.S. $6,155 cash and the vessel was delivered to the new owners on 14 May 2013. As of delivery date, M/V MSC Scotland had a net carrying value U.S $8,189. A commission of 3% on the gross consideration was paid for this disposal. The loss resulting from the sale of the vessel was U.S. $2,034 and is included in the interim consolidated statement of comprehensive income (gain of U.S.$7,620 for the period ended 30 June 2012).

Dry-docking costs

In the first six months of 2013, three of the Group's vessels underwent scheduled dry-dockings at a cost of U.S. $1,151 (U.S. $1,264 as at 31 December 2012 for dry docking of six vessels).

Impairment

No impairment loss was identified by the Group for the period ended 30 June 2013. The impairment loss for 2012 was U.S. $47,600.

6. JOINT VENTURE:

The Group's 50% portion in the stand alone financial statements of Sentinel Holdings Inc., as at 30 June 2013 and 31 December 2012 was as follows: