GPRT.L Regulatory News (GPRT)

4 Sep 2006 07:00

Goldenport Holdings Inc03 September 2006 Goldenport Holdings Inc. Athens, 3rd September 2006 Interim results for the six months ended 30 June 2006 Goldenport Holdings Inc. ("Goldenport" or "the Company"), an internationalshipping company that owns and operates a fleet of dry bulk and containervessels, today announces interim results for the six months ended June 30. Financial Highlights: • Revenue of US$ 39.8m (2005: US$ 42.5m) • Net income of US$ 21.7m (2005: US$ 22.6m). • Interim dividend of 5.6 pence per share (£ 3.9m) announced • The 6.3% fall in revenue from the same period in 2005 was against a backdrop of significantly falling markets, with the dry bulk and container markets having declined by 39% and 35% respectively. The Company's exposure to this weakening market has been minimised by its proactive time charter strategy • Confident in the prospects for the full year Operational Highlights: • Our proactive chartering policy has enabled us to weather the weaker dry bulk market of the first part of 2006 and take advantage of the subsequent strengthening of rates • The chartering of the bulk carrier fleet in the second half of the year is expected to outperform the weak first half, bringing balance to the full year results in terms of organic growth • Two new vessels acquired since the IPO, 'Bengal Sea' and 'Vasos', will both start contributing to earnings in the second half of the year • The acquisition of the fire damaged container vessel 'Fortune' is an innovative project with a potential high return CEO Statement: Commenting on these results, Captain Paris Dragnis, Founder and Chief ExecutiveOfficer of the Company stated: "Our forward looking model of employing our vessels on time charters has allowedus to maintain profitability broadly at the same levels as 2005, despite thesignificant decline during the first half of the year in our markets. We are nowwell placed to take advantage of strong rates in the second part of the year. The recovery in the dry bulk market, combined with our long-standing andextensive relationships with top tier charter counterparties and our enhancedfleet are already enabling us to take on first class charters at ratessignificantly improved from those prevailing during the first part of the year.We are therefore confident in the prospects for the Company for the full year. Consistent with the strategy outlined in our Initial Public Offering in April2006 we have begun to increase the size of our fleet, with the addition of twolarge container vessels and one cape size bulk carrier, thus improving the mixand the age of the fleet. The vessels 'Bengal Sea' and 'Vasos' (ex 'OrientAlliance') will contribute to results in the second part of the year. Wecontinue to evaluate and consider a number of opportunities to enhance ourfleet." Enquiries: Goldenport: Christos Varsos, Chief Financial Officer: Today +30 694 429 4839 Thereafter +30 210 8910 500John Dragnis, Commercial Manager Today +30 694 668 8180 Thereafter +30 210 8910500Smithfield:John Kiely / Will Swan: +44 (0)20 7360 4900 Overview of Goldenport: Goldenport is an international shipping company that owns and operates a fleetof dry bulk and container vessels that transport cargo worldwide. The fleetconsists of ten dry bulk carriers and ten container vessels. Goldenport islisted on the London Stock Exchange under the ticker GPRT. Goldenport's strategy: Goldenport's primary objective is to manage its fleet in a manner that allows itto maximise returns for shareholders and maintain profitability across theshipping cycle. To accomplish this objective, Goldenport has identified thefollowing strategies, which build upon its existing strengths: • Employment of vessels in a manner that provides stable cash flows • Effective management of the size and nature of the fleet with a view to expansion of the company • Maintain exposure to both the dry bulk and container sectors • Attraction and retention of blue-chip customers • Capitalise on established reputation • Maintenance of a strong balance sheet with low leverage Operational Review: Current market conditions: The dry bulk market in the first six months of 2006 declined on average by 39%compared to the same period in 2005 (source: Baltic Dry Index). However, theeffect of this decline on the Company's results was mitigated by our charterpolicy, which has fixed approximately half of our dry bulk fleet for most of theperiod at previously prevailing higher rates. The remainder of the bulk carrier fleet was employed on short term timecharters, in order to maintain some flexibility and avoid being locked into longperiods at low rates. This has allowed the Company to take advantage of therecovering market since June, by contracting charters for longer periods atincreasingly attractive rates. Examples of this strategy include the vessels 'Gianni D' and 'Limnos'. FromMarch to September 2006 'Gianni D' was chartered for US $ 16,500 per day but hasbeen now fixed for US $ 26,000 per day until late November 2007 (in 2004 thevessel was fixed for US $ 17,800 per day). 'Limnos' was chartered at US $ 13,500per day until June 2006 and is now fixed at US $ 19,200 until December 2006. The container market in the first six months of 2006 declined on average by 35%compared to the same period in 2005 (source: Howe Robinson Containers Index);again this did not affect the results of the Company as the entire containerfleet had previously been fixed long-term, with some contracts extending out to2009. Fleet expansion: Three new vessels have been added to the fleet following the Initial PublicOffering in April this year. The 3,007 TEU container vessel 'Bengal Sea' and thecape size bulk carrier 'Vasos' (ex. 'Orient Alliance') were acquired, backed byinitial time charter contracts. These contracts ensure that Goldenport'sinvestment exposure at the end of the initial time charters for each vessel islimited to the scrap value or levels acceptable under the Company's investmentcriteria. The acquisition of the 5,551 TEU fire-damaged container vessel 'Fortune'acquired on June 16th, is an innovative project with high potential return forthe Company. The vessel is expected to be ready for operation in early 2008,and, on completion of the repairs, will constitute a low cost addition to thefleet relative to market prices. The vessel will not have impact in the resultsof the Company, until it becomes operational. Interim dividend: The Company has today declared an interim dividend of 5.6 pence per share,(making an interim payout of £ 3.9 million). The dividend will be payable onOctober 4th, 2006 to shareholders of record as of 15 September 2006. Thetranslation of the dividend payment from US $ to British Sterling is based onthe prevailing rate between the two currencies as of September 1st, 2006, whichwas 1.897 US $ per £. Summary of Selected Financial and Operating Data: 6 months ended INCOME STATEMENT DATA (in US$ thousand): 30 June 2006 30 June 2005 --------- --------- Revenue 39,810 42,507 EBITDA 25,139 27,593 EBIT 19,956 23,331 Net Income 21,732 22,612 FLEET DATA: Average number of vessels 17 17 Number of vessels at end of period 19 17 Number of vessels in operation at end of 18 17 period Ownership days 3,082 * 3,077 Available days 2,967 3,062 Operating days 2,882 3,059 Fleet utilisation 97.1% 99.9% AVERAGE DAILY RESULTS (in US$): Time Charter Equivalent (TCE) rate 12,596 12,923 Average daily vessel operating expenses 3,305 * 3,387 *: Ownership days and average daily vessel operating expenses exclude the vessel'Fortune' which was not operating within the period See Appendices, for Notes on the Summary of Selected Financial and OperatingData and for full Fleet Employment profile. Time and Voyage Charter Revenues: Revenues decreased by US$ 2.7 million or 6.3%to US$ 39.8 million for the six months ended 30 June 2006 (2005: US$ 42.5million). The main reasons for this decrease were: (i) the difference inavailable days between the two periods (2006: 2,967 days; 2005: 3,062 days),mainly due to the fact that in 2006 four vessels underwent their scheduleddry-docking,compared to none in 2005; (ii) a softening in the market which saw adecline in time charter rates achieved, especially for bulk carriers. Thisdecline was particularly relevant for the vessels 'Limnos' and 'Lindos' whichwere employed under short-term charters during the first six months of 2006 atan average rate of US$ 16,000 and US$ 13,250 per day respectively (2005: US$24,000 and US$ 22,000 per day respectively) and (iii) taking advantage of thedry-docking of the vessel 'MSC Emirates', the Company did additional work on thevessel which affected the operating days and the utilisation rate. Voyage expenses: The voyage expenses decreased by US$ 0.5 million or 21% to US$1.6 million for the six months ended 30 June 2006 (2005: US$ 2.1 million) mainlydue to lower commission rates and a decreased revenue figure to which thoserates applied. Vessel operating expenses and general and administrative expenses: Vesseloperating expenses decreased by US$ 0.2 million or 2.3% to US$ 10.2 million forthe six months ended 30 June 2006 (2005: US$ 10.4 million). This decrease bringsthe expenses broadly at the same level with last year. General andadministrative expenses increased by US$ 0.4 million reflecting incrementallisting related expenses. Depreciation: The depreciation charge remained at the same levels for the periodto 30 June 2006 as for 2005. Depreciation of dry-docking costs increased by US$0.9 million or 54% to US$ 2.6 million for the six months ended 30 June 2006(2005: US$ 1.7 million) mainly due to the dry-docking of four vessels. In thesecond part of 2005 six vessels underwent dry-docking and the amortisation ofthis expense is affecting 2006 numbers. Financing costs: Interest expense increased by US$ 0.5 million or 32% to US$ 1.9million for the six months ended 30 June 2006 (2005: US$ 1.4 million), mainlydue to the increased principle amount from refinancing that took place at theend of the first half of 2005. Interest income increased significantly by US$1.2 million to US$ 1.3 million due to time deposits at higher rates on the cashgenerated from operations and the proceeds of the initial public offering. GOLDENPORT HOLDINGS INC. Interim Condensed Consolidated Financial Information 30 June 2006 INDEPENDENT REVIEW REPORT To the Shareholders of Goldenport Holdings Inc. Introduction We have been instructed by Goldenport Holdings Inc. (the Company) to review thefinancial information for the six months ended 30 June 2006 which comprises theInterim Condensed Consolidated Income Statement, the Interim CondensedConsolidated Balance Sheet, the Interim Condensed Consolidated Statement ofChanges in Equity, the Interim Condensed Consolidated Cash Flow Statement andthe related notes. We have read the other information contained in the interimreport and considered whether it contains any apparent misstatements or materialinconsistencies with the financial information. Directors' responsibilities The interim report, including the financial information contained therein, isthe responsibility of, and has been approved by, the directors. The directorsare responsible for preparing the interim report in accordance with the ListingRules of the Financial Services Authority which require that the accountingpolicies and presentation applied to the interim figures should be consistentwith those applied in preparing the preceding annual accounts except where anychanges, and the reasons for them, are disclosed. Review work performed We conducted our review in accordance with guidance contained in Bulletin 1999/4issued by the Auditing Practices Board for use in the United Kingdom. A reviewconsists principally of making enquiries of Group management and applyinganalytical procedures to the financial information and underlying financial dataand based thereon, assessing whether the accounting policies and presentationhave been consistently applied unless otherwise disclosed. A review excludesaudit procedures such as tests of controls and verification of assets,liabilities and transactions. It is substantially less in scope than an auditperformed in accordance with United Kingdom Auditing Standards and thereforeprovides a lower level of assurance than an audit. Accordingly, we do notexpress an audit opinion on the financial information. Review conclusion On the basis of our review we are not aware of any material modifications thatshould be made to the financial information as presented for the six monthsended 30 June 2006. Ernst & Young (Hellas) Certified Auditors - Accountants S.A. 3 September 2006 INTERIM CONDENSED CONSOLIDATED INCOME STATEMENTFOR THE SIX MONTHS ENDED 30 JUNE 2006 6 months 6 months Ended Ended 30 June 2006 30 June 2005 Notes U.S.$'000 U.S.$'000 ------- --------- ---------- Unaudited Audited Revenue 39,810 42,507 Expenses Voyage expenses 4 (1,642) (2,082) Voyage expense - related party 4, 11 (796) (856) Vessel operating expenses 4 (10,185) (10,421) Management fees - related party 11 (1,607) (1,530) Depreciation (2,597) (2,586) Depreciation of dry-docking costs (2,586) (1,676) General and administration (441) (25) expenses --------- ----------Profit from operations before 19,956 23,331 finance costs --------- ---------- Interest expense 5 (1,920) (1,450) Interest income 1,322 127 Foreign currency gain, net 2,374 604 --------- ----------Profit for the period from 21,732 22,612 operations --------- ---------- Profit for the period 21,732 22,612 attributable to Goldenport Holdings Inc shareholders --------- ---------- Earnings per share (U.S.$): - Basic EPS for the period 8 0.39 0.54 - Diluted EPS for the period 8 0.39 0.54 Average number of ordinary shares 55,059,668 41,800,000 outstanding The accompanying notes to the financial information form an integral part of thefinancial information. INTERIM CONDENSED CONSOLIDATED BALANCE SHEETAT 30 JUNE 2006 30 June 31 December 2006 2005 Notes U.S.$'000 U.S.$'000 ------- --------- ---------- Unaudited Audited ASSETS Non-current assets Vessels 6 110,410 84,421 Vessels under construction 6 13,322 - Other non-current assets 160 184 --------- ---------- 123,892 84,605 --------- ---------- Current assets Inventories - 324 Trade receivables 1,474 320 Insurance claims 1,160 259 Due from related parties 11 3,705 9,860 Prepaid expenses and other assets 446 458 Unpaid share capital - 418 Restricted Cash 9 812 1,396 Cash and cash equivalents 68,721 - --------- ---------- 76,318 13,035 --------- ---------- TOTAL ASSETS 200,210 97,640 ========= ========== EQUITY AND LIABILITIES Equity attributable to Goldenport Holdings Inc shareholders Issued share capital 7 699 418 Share premium 7 106,991 - Retained earnings 25,806 4,492 --------- ----------TOTAL EQUITY 133,496 4,910 --------- ---------- Non-current liabilities Long-term debt 9 40,325 52,538 --------- ---------- 40,325 52,538 --------- ----------Current liabilities Trade payables 3,812 5,057 Current portion of long-term debt 9 16,305 23,150 Accrued liabilities and other 10 2,902 2,310 payables Deferred revenue 3,370 3,175 Dividends payable - 6,500 --------- ---------- 26,389 40,192 --------- ---------- TOTAL LIABILITIES 66,714 92,730 --------- ----------TOTAL EQUITY AND LIABILITIES 200,210 97,640 ========= ========== The accompanying notes to the financial information form an integral part of thefinancial information. INTERIM CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE SIX MONTHS ENDED 30 JUNE 2006 Number of Par Issued Share Retained Total shares value share premium earnings Equity U.S.$ capital U.S.$'000 U.S.$'000 U.S.$'000 U.S.$'000 --------- ------- --------- -------- ------- --------- As of 31 41,800,000 0.01 418 - - 418 December 2004 Profit for the - - - - 22,612 22,612 period Dividends to - - - - (22,612) (22,612) equity shareholders -------- ------- --------- -------- ------- --------- As of 30 June 41,800,000 0.01 418 - - 418 2005 ======== ======= ========= ======== ======= ========= Number of Par Issued Share Retained Total shares value share premium earnings Equity U.S.$ capital U.S.$'000 U.S.$'000 U.S.$'000 U.S.$'000 --------- ------- --------- -------- ------- --------- As of 31 41,800,000 0.01 418 - 4,492 4,910 December 2005 --------- ------- --------- -------- ------- --------- Profit for the - - - - 21,732 21,732 period Common stock - - - - (418) (418) settled by contribution of shares by initial shareholder (Note 7) Proceeds from 28,085,106 0.01 281 106,991 - 107,272 initial public offering, net (Note 7) --------- ------- --------- -------- ------- --------- As of 30 June 69,885,106 0.01 699 106,991 25,806 133,496 2006 (unaudited) --------- ------- --------- -------- ------- --------- The accompanying notes to the financial information form an integral part of thefinancial information. INTERIM CONDENSED CONSOLIDATED CASH FLOW STATEMENT FOR THE SIX MONTHS ENDED 30 JUNE 2006 6 months 6 months ended ended 30 June 2006 30 June 2005 Notes U.S.$'000 U.S.$'000 ------- --------- ---------- Unaudited Audited Operating activities Profit for the period 21,732 22,612 Adjustments for: Depreciation 2,597 2,586 Depreciation of dry-docking costs 2,586 1,676 Interest expense 1,920 1,450 Interest income (1,322) (127) Foreign currency gain (2,374) (604) --------- ---------- Operating profit before working 25,139 27,593 capital changes Inventories 324 - Trade receivables, pre-paid (1,076) 52 expenses & other assets Insurance claims (901) 375 Trade payables, accrued (698) (1,555) liabilities & other payables Deferred revenue 195 394 --------- ----------Net cash flows from operating 22,983 26,859 activities before movement in amounts due from related parties Due from related parties 6,155 (42,830) --------- ----------Net cash flows provided by / (used 29,138 (15,971) in) operating activities --------- ----------Investing activities Acquisition of vessels and vessel (29,378) (16) improvements Advances for vessel under (13,322) - reconstruction Dry-docking costs (1,794) - Interest received 1,256 - --------- ----------Net cash flows used in investing (43,238) (16) activities Financing activities Proceeds from issue of long - term debt 17,380 59,803 Repayment of long-term debt (36,530) (26,263) Share Capital Increase 281 - Proceeds from initial public 115,184 - offering Issuance costs (8,193) - Restricted cash 584 758 Interest paid (1,884) (1,113) Dividends paid (6,500) (17,198) --------- ----------Net cash flows provided by 80,322 15,987 financing activities --------- ----------Net increase in cash and cash 66,222 - equivalents Exchange gains on cash and cash 2,499 - equivalents Cash and cash equivalents at - - beginning of period --------- ----------Cash and cash equivalents at end 3 68,721 - of period --------- ---------- The accompanying notes to the financial information form an integral part of thefinancial information. NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL INFORMATION FOR THE SIX MONTHS ENDED 30 JUNE 2006 1. Formation, Basis of Presentation and General Information Goldenport Holdings Inc. (Goldenport or the Company) was incorporated under thelaws of Marshall Islands on 21 March 2005. On April 5, 2006 Goldenport HoldingsInc was admitted in the Official List and started trading on the London Stockexchange at a price of GBP2.35 per share. On 11 April the over allotment optionwas exercised and as a total the Company received GBP66 million (or U.S.$115.5million) that were to be used to partially repay debt and to fund further fleetexpansion (see also notes 6, 7 and 9). Goldenport Holdings Inc as of 30 June 2006 is the Holding company for nineteen(19) intermediate holding companies, each in turn owning a vessel - owningcompany, as listed in the table below. Hereinafter Goldenport Holdings and itssubsidiaries will be referred to as the 'Group'. The interim condensed consolidated financial information were authorised forissue in accordance with a resolution of the Board of Directors on 3 September2006. It includes the financial information of the Company and the followingwholly owned subsidiaries: Country of Incorporation Name of Vessel of of vessel Year of Intermediate owning vessel-owning owned by acquisition- Type ofholding company company company Subsidiary Vessel Vessel-------------- -------- --------- --------- --------- -------- Marta Trading Co. Superb Panama Glory D 1997 Container Maritime S.A. Daphne Marine Dancing Malta Tuas 1998 ContainerCorp. Waves Express Co. Ltd. Oates Trading Risa Malta Vana 1999 Bulk Corp. Maritime Carrier Co. Ltd. Portia Navigation Borealis Malta Msc 1999 ContainerCo. Shipping Himalaya Co. Ltd. Aloe Navigation Karana Malta Alex D 1999 Bulk Inc. Ocean Carrier Shipping Co. Ltd. Dumont Black Malta Beauty 2001 ContainerInternational Inc. Rose Shipping Ltd. Royal Bay Marine Opal Malta Achim 2001 ContainerLtd Maritime Limited Audrey Marine Wild Malta MSC 2001 ContainerCorp. Orchid Emirates Shipping Ltd. Sicuro Hampton Liberia Msc Socotra 2002 ContainerShipmanagement SA Trading S.A. Platinum Coral Malta Gianni D 2002 Bulk Shipholding SA Sky Carrier Marine Ltd. Nemesis Maritime Samos Malta Samos 2002 Bulk Inc. Maritime Carrier Ltd. Meredith Trading Guilford Panama Ios 2002 Bulk Corporation Marine Carrier S.A. Rawlins Trading Fairland Panama Athos 2002 Bulk Ltd Trading Carrier S.A Blaze Navigation Nilwood Panama Howrah 2003 ContainerCorp. Comp. Bridge Inc. 1. Formation, Basis of Presentation and General Information (Continued) Country of Incorporation Name of Vessel of of vessel Year of Intermediate owning vessel-owning owned by acquisition- Type ofholding company company company Subsidiary Vessel Vessel-------------- -------- --------- --------- --------- -------- Carrier Maritime Black Malta Lindos 2003 Bulk Co, Diamond Carrier Shipping Ltd Medina Trading Carina Malta Tilos 2004 Bulk Co. Maritime Carrier Co. Ltd Savannah Marine Serena Malta Limnos 2004 Bulk Inc. Navigation Carrier Ltd. Sirene Maritime Alvey Liberia Bengal Sea 2006 ContainerCo Marine Inc Kariba Shipping Kosmo Marshall Fortune 2006 ContainerSA Services Islands Inc 2. Summary of significant accounting policies: Basis of preparation The interim condensed consolidated financial information for the six monthsended 30 June 2006 has been prepared in accordance with IAS 34 Interim FinancialReporting. The interim condensed consolidated financial information does notinclude all the information and disclosures required in the annual financialinformation, and should be read in conjunction with the Group's annual financialinformation as at 31 December 2005. Significant accounting policies The accounting policies adopted in the preparation of the interim condensedconsolidated financial information is consistent with those followed in thepreparation of the Group's annual financial information of the year ended 31December 2005, except for the adoption of the following amendments mandatory forannual period beginning on or after 1 January 2006: IAS 39 Financial Instruments: Recognitions and Measurement Amendment for financial guarantee contracts- which amended the scope of IAS 39to include financial guarantee contracts issued. The amendment addressed thetreatment of financial guarantee contracts by the issuer. Under IAS39 as amendedfinancial guarantee contracts are recognised initially at fair value andgenerally remeasured at the higher of the amount determined in accordance withIAS 37 Provisions, Contingents Liabilities and Contingent assets and the amountinitially recognised less, when appropriate, cumulative amortisation recognisedin accordance with IAS18 Revenue; Amendment for Hedges of forecast intragroup transactions- which amended IAS 39to permit the foreign currency risk of a highly probable intragroup forecasttransaction to qualify as the hedged item in a cash flow hedge, provided thatthe transaction is denominated in a currency other that the functional currencyof the entity entering into that transaction and that the foreign currency riskwill affect the financial information; Amendment for the fair value option-, which restricted the use of the option todesignate any financial asset or financial liability to be measured at fairvalue through profit and loss; The adoption of these amendments did not affect the Group results of operationsor financial position. 3. Cash and cash equivalents For the purpose of the interim condensed consolidated cash flow statement, cashand cash equivalents are comprise of the following: June 30, 2006 June 30, 2005 U.S.$'000 U.S.$'000 ------------- ------------- Unaudited Audited Cash at bank 1,091 - Time deposits 67,630 - ------------- ------------- 68,721 - ============= ============= 4. Voyage & vessel operating expenses The amounts in the accompanying consolidated income statement are analysed asfollows: Six months ended Six months ended June 30, 2006 June 30, 2005 U.S.$'000 U.S.$'000 ------------- ------------- Unaudited Audited Voyage expenses (1,642) (2,082) Voyage expenses - related party (796) (856) ------------- ------------- (2,438) (2,938) ------------- -------------Voyage expenses consist of: Port charges (26) (10) Bunkers (fuel costs)/income 166 - Commissions (2,578) (2,928) ------------- -------------Total voyage expenses: (2,438) (2,938) ------------- -------------Vessel Operating Expenses Crew wages & related costs (3,887) (3,360) Other crew expenses (119) (174) Deck stores (340) (377) Travelling (287) (208) Crew victualling (345) (393) Repairs & maintenance (202) (344) Spares (806) (1,032) Engine stores (300) (278) Lubricants (1,266) (1,066) Insurance (1,983) (1,958) Other operating expenses (436) (997) Taxes (other than income tax) (214) (234) ------------- -------------Total vessel operating expenses: (10,185) (10,421) ------------- ------------- 5. Interest Expense The amounts in the accompanying consolidated income statement are analysed asfollows: Six months ended Six months ended June 30, 2006 June 30, 2005 U.S.$'000 U.S.$'000 ------------- ------------- Unaudited Audited Interest payable on long-term (1,804) (1,378) borrowings Amortisation of debt discount (92) (131) Net gain/(loss) on fair value of (24) 59 interest rate swap ------------- -------------Total (1,920) (1,450) ============= ============= 6. Vessels These are analysed as follows: 30 June 2006 31 December 2005 U.S $'000 U.S.$'000 ------------- -------------- Unaudited Audited Cost At beginning of period/year 94,260 94,221 Additions 29,378 39 ------------- --------------At end of period/year 123,638 94,260 ------------- --------------Depreciation At beginning of period/year (18,051) (12,853) Depreciation charge for the period/ (2,597) (5,198) year ------------- --------------At end of period/year (20,648) (18,051) ------------- --------------Net carrying amount of vessels 102,990 76,209 Net carrying amount of deferred 7,420 8,212 dry-docking costs ------------- --------------Net carrying amount 110,410 84,421 ============= ============== Acquisitions On 26 June 2006, the Company acquired the M/V Bengal Sea, a container vessel of3,007 TEU and 47,120 DWT built in 1992 for U.S.$29.1 million (the vessel will berenamed to MSC Scotland on September 2006). The gross carrying amount of vessels, which have been fully depreciated to theirresidual value and are still in use, was U.S.$15.8 million (2005: U.S.$12.8million). Vessels under construction 30 June 2006 31 December 2005 U.S $'000 U.S.$'000 Unaudited Audited Advances for vessel under 13,322 - construction ============= ============== On 16 June 2006, the Company acquired the M/V Fortune, a container vessel of5,551 TEU and 68,537 DWT built in 1996 for U.S.$13 million. The vessel wasdamaged in a fire on 21 March 2006. The vessel is expected to become operationalin 14 to 18 months after undergoing a major reconstruction (see Note 12). 6. Vessels (Continued) Vessels under construction include capital expenditure of U.S.$0.3 million forthe reconstruction of the vessel up to 30 June 2006. Depreciation on the vesselwill commence upon the completion of the reconstruction. All of the Company's vessels and vessels under construction, having a totalcarrying value of U.S. $116 million at 30 June 2006 (U.S.$76.2 million at 31December 2005), have been provided as collateral to secure the loans discussedin Note 9. Dry-docking costs Net carrying amount of deferred dry docking costs consists of cost ofU.S.$16.5million and accumulated amortisation of U.S.$9.1 million. During thesix month period ended June 30 2006, four of theGroup's vessels have passedtheir Dry-docking survey with a total cost of U.S.$1.8 million. 7. Share capital and Share premium Share capital consisted of the following: 30 June 2006 31 December 2005 U.S. $'000 U.S.$'000 ------------- ------------- Unaudited Audited Authorised Common stock of $0.01 each 100,000 1,000 ------------- ------------- Issued and unpaid Common stock of $0.01 each - 418 Issued and paid Common stock of $0.01 each 699 - ------------- -------------Total issued share capital 699 418 ============= ============= Formation: The Company was formed on 21 March 2005, and prior to thereorganisation analysed below, its shares of common stock consisted of 500shares authorised, issued and outstanding, without par value. From 30 March 2006,conditional on admission to the Official List of the London Stock Exchange,the Company amended its Articles of Incorporation. Under the Company's Amendedand Restated Articles of Incorporation, the Company has an authorised sharecapital of 100,000,000 shares (all in registered form), consisting of100,000,000 shares of common stock with a par value of U.S.$0.01 per share. TheCompany has cancelled the existing 500 shares with no par value. Prior to thereorganisation, seventeen holding companies, each in turn owning a vessel -owning company (altogether the Contributed Companies), were wholly-owned byCaptain Paris Dragnis. The reorganisation that took place on 30 March 2006 as well, involved thefollowing steps: (a) Captain Paris Dragnis contributed all of the shares held by him in the seventeen intermediate holding companies to Goldenport, in exchange for shares of common stock in Goldenport, fulfilling his obligation for the Company's share capital, in accordance with the share for share agreement exchange dated 30 March 2006; and (b) Captain Paris Dragnis transfered all of the shares of common stock in Goldenport to Starla Shipholding Corporation (Starla), a company wholly owned by Captain Paris Dragnis; as a result Starla was, prior to the admission to the Official List of the London Stock Exchange, the sole shareholder of the Company. 7. Share capital and Share premium (continued) Following completion of the reorganisation, the Contributed Companies werewholly-owned subsidiaries of Goldenport. On 5 April 2006 the Company was admitted to the Official List of the LondonStock Exchange, issuing 25,531,915 shares of U.S.$0.01 each. On 11 April 2006the over allotment option was exercised for 2,553,191 shares at GBP 2.35 pershare bringing the total offer to GBP66 million. The analysis of the Share premium is as follows: U.S. $'000 ------------ Initial public offering 115,465 Issuance costs (8,193) ------------Proceeds from initial public offering, net 107,272 Paid share capital (281) ------------Share premium 106,991 ============ 8. Earnings per share Basic earnings per share "EPS" are calculated by dividing the profit for theperiod attributable to Goldenport Holdings Inc. shareholders by the weightedaverage number of shares outstanding. No dilution in EPS exists as at 30 June2006 and 2005. 9. Long-term Debt The amounts in the accompanying balance sheets are analysed as follows: 30 June 2006 31 Dec 2005 Bank Loan Vessel(s) U.S. $'000 U.S.$ '000 --------------- ----------- ------------ ------------- Unaudited Rate Audited Rate Amount % Amount % ------- ------ ------- ------ a. Issued 1 Tuas Express 360 5.67% 1,080 5.43% November 2000, Msc Himalaya maturing 30 August Glory D 2006 b.Issued 12 July Samos 2,700 6.25% 2,940 5.66% 2002, maturing 18 July 2007 c.Issued 31 October Ios, Athos 2,885 6.26% 3,155 5.78% 2002, maturing 4 February 2007 d.Issued 13 Lindos 3,500 5.84% 3,850 5.75% February 2003, maturing 30 May 2009 e.Issued 31 March Tilos, Limnos 9,500 5.81% 18,600 5.63% 2004, maturing 30 September 2010 f. Issued 17 May Vana, Beauty, 20,400 5.95% 46,250 5.70% 2005, maturing 17 Achim Gianni May 2009 D, Socotra, AlexD, Howrah Bridge, Msc Emirates g. Issued 26 June Bengal Sea 17,500 6.17% - - 2006, maturing 26 September 2011 ------- ------- Total 56,845 75,875 Less: current 16,305 23,150 portion Less: debt discount 215 187 ------- ------- Long-term portion 40,325 52,538 ======= ======= The repayment terms of loans with balances outstanding at 30 June 2006 are: Loan a: This loan is repayable in one quarterly instalment of U.S.$0.36 millionby 30 August 2006. Loan b: This loan is repayable in four quarterly instalments of U.S.$0.12millioneach, the first one paid on 18 July 2006 and the final one being due on 18 April2007 plus a balloon payment of U.S.$2.22 million, being due on 18 July 2007. Loan c: This loan is repayable in two quarterly instalments of U.S.$0.135millioneach, the first one paid on 4 August 2006 and the final one being due on 4November 2006 plus a balloon payment of U.S.$2.615 million, being due on 4February 2007. 9. Long-term Debt (Continued) Loan d: This loan is repayable in six, six-monthly instalments of U.S.$0.35million each, the first one paid on 30 November 2006 and the final one being dueon 30 November 2008 plus a balloon payment of U.S.$1.4 million, being due on 30May 2009. Loan e: This loan is repayable in one six-monthly instalment of U.S.$2.1million, to be paid on 30 September 2006 and the eight six-monthly instalmentsof U.S.$0.7 million each, the first one being due on 31 March 2007 and the finalone being due on 31 March 2010, plus a balloon payment of U.S.$1.8 million beingdue on 30 September 2010. Loan f: This loan is repayable by one quarterly instalments of U.S.$2.1 million,to be paid on 17 August 2006 , twelve quarterly instalments of U.S.$ 1.3million each, the first one being due on 17 November 2006 and the final onebeing due on 17 August 2009,along with a balloon payment of U.S.$2.7 million. Loan g: On 26 June 2006 the Company signed an agreement for a secured term loanfacility of up to U.S.$17.5 million in order to acquire the new vessel M/VBengal Sea. This loan is repayable by: twelve quarterly instalments of U.S$0.8million each, the first one paid on 26 September 2006 and the twelfth on 26September 2009, eight quarterly instalments of U.S.$0.6 million each , the firstone being due on 26 September 2009 and the final one being due on 26 September2011 along with a balloon payment of U.S$3.1million. All loans are denominated in U.S. dollars, and bear interest at LIBOR plus amargin payable quarterly. The loan agreements contain covenants including restrictions as to changes inmanagement and ownership of the vessels, additional indebtedness and mortgagingof vessels without the bank's prior consent as well as minimum requirementsregarding hull cover ratio and corporate guarantees of the Holdings. Therestricted net assets of the vessel-owning subsidiary companies at 31 December2005 and 30 June 2006 consisted of restricted cash and amounted to U.S.$1.4million U.S.$ 0.8 million respectively. 10. Accrued liabilities and other payables The amounts in the accompanying balance sheets at are analysed as follows: 30 June 31 December 2006 2005 U.S.$'000 U.S.$'000 ------------- ------------- Unaudited Audited Accrued interest 93 173 Other accrued expenses 535 186 Other payables 2,274 1,951 ------------- ------------- 2,902 2,310 ============= ============= 11. Related party transactions Transactions with related parties consist of the following: Period ended Period ended June 30 June 30 2006 2005 U.S.$'000 U.S.$'000 ------------- ------------- Unaudited Audited Voyage expenses - related Party Goldenport Shipmanagement Ltd 796 856 Management fees - related party Goldenport Shipmanagement Ltd 1,607 1,530 ------------- -------------Total 2,403 2,386 ============= ============= Balances due from related parties comprise the following: 30 June 31 December 2006 2005 U.S.$'000 U.S.$'000 ------------- ------------- Unaudited Audited Due from related parties -Current Goldenport Shipmanagement Ltd 3,705 9,860 ------------- -------------Total 3,705 9,860 ============= ============= 12. Commitments As stated in Note 6, the Company acquired in June 2006 the M/V Fortune which wasdamaged in a fire in March 2006. The vessel will become operational in a periodof 14 to 18 months after undergoing major reconstruction for which the Companyhas obtained from a bank in August 2006 a letter of intent for a loan of U.S.$30million. The Company intends to utilise U.S. $5 million out of this loan torefinance existing debt (in order for the vessels involved in the refinancing tobe used as collateral on the loan) and the remaining U.S. $25 million will coverthe reconstruction cost of M/V Fortune. 13. Events after the balance sheet date Vessel acquisition: On 19 July 2006, the Company acquired the M/V Vasos (ex.Orient Alliance), a 152,200 DWT cape size bulk carrier built in 1990 for apurchase price of U.S.$27.3 million. The acquisition of the vessel is partiallyfinanced by a loan facility amounting to U.S.$17.5 million. This loan will berepaid by ten semi-annual instalments. First instalment is of U.S.$0.95 millionfollowed by nine instalments of U.S.$1.45 million each, plus a ballooninstalment of U.S.$3.5 million payable simultaneously with the final instalment. Dividends declared: On 3 September 2006, the Company declared an interimdividend of 5.6 pence per share. APPENDICES 1. Fleet Employment Profile: Currently Goldenport's fleet is employed as follows: Vessel Type Capacity Rate Charter Expiration (US$) per day Containers TEU Earliest Latest(1) Fortune Post 5,551 Under repairs Panamax Bengal Sea / MSC Sub 3,007 22,500 Sep-06 Sep-06 Scotland (2) Panamax 20,770 Sep-09 Nov-09 MSC Socotra Sub 2,258 8,000 Jan-08 Mar-08 Panamax Howrah Bridge Sub 2,257 14,400 Jan-07 Mar-07 Panamax MSC Himalaya Sub 2,108 12,700 Dec-08 Jan-09 Panamax Achim Handy 930 10,450 Feb-09 Apr-09 Beauty Handy 962 7,300 Feb-07 Apr-07 MSC Emirates Handy 934 9,000 Jan-07 Jan-07 Glory D Handy 946 10,450 Feb-09 Apr-09 Tuas Express Feeder 485 8,900 Dec-07 Dec-08 Dry Bulk DWT Vasos (ex. Orient Capesize 152,065 16,000 Feb-07 May-07 Alliance) (3) 23,950 Dec-10 Jun-12 Samos Capesize 136,638 15,750 Apr-07 Jun-07 Ios Panamax 69,737 12,500 Feb-07 Jun-07 Gianni D Panamax 69,100 16,500 Sep-06 Sep-06 26,000 Sep-07 Nov-07 Athos Panamax 67,515 16,750 Jun-07 Sep-07 Vana (4) Handymax 53,522 12,700 Sep-06 Oct-06 Alex D (4) Handymax 52,315 21,250 Oct-06 Oct-06 Limnos Handymax 52,266 19,200 Nov-06 Dec-06 Lindos Handymax 52,266 14,500 Jul-09 Nov-09 Tilos (4) Handymax 52,266 26,000 Sep-06 Sep-06 (1) Represents last day on which the charter may redeliver the vessel assuming exercise of all additional hire periods under charter (2) Bengal Sea upon expiry of the remaining time charter in September 2006 will be renamed to MSC Scotland (3) Charterer has an option to extent for another 12 months after the initial period of 45 to 51 months (4) Goldenport is in advanced negotiations to extend or re-charter the vessels Vana, Alex D and Tilos Forward Charter Coverage: The percentage of available days of the fleet already fixed under contracts(assuming latest charter expiration and exercise of all additional hire periodsunder charter) is as follows: 2006 2007 2008 Total Fleet 96% 63% 43% Containers 100% 74% 60% Bulk Carriers 92% 52% 24% 2. Notes on Summary of Selected Financial and Operating Data: (1) Average number of vessels is the number of vessels that constituted ourfleet for the relevant period, as measured by the sum of the number of days eachvessel was a part of our fleet during the period divided by the number ofcalendar days in the period. (2) Ownership days are the aggregate number of days in a period during whicheach vessel in our fleet has been owned by us. Ownership days are an indicatorof the size of our fleet over a period and affect both the amount of revenuesand the amount of expenses that we record during a period. (3) Available days are the number of our ownership days less the aggregatenumber of days that our vessels are off-hire due to scheduled repairs or repairsunder guarantee, vessel upgrades or special surveys and the aggregate amount oftime that we spend positioning our vessels. The shipping industry uses availabledays to measure the number of days in a period during which vessels should becapable of generating revenues. (4) Operating days are the number of available days in a period less theaggregate number of days that our vessels are off-hire due to any reason,including unforeseen circumstances. The shipping industry uses operating days tomeasure the aggregate number of days in a period during which vessels actuallygenerate revenues. (5) We calculate fleet utilisation by dividing the number of our operating daysduring a period by the number of our available days during the period. Theshipping industry uses fleet utilisation to measure a company's efficiency infinding suitable employment for its vessels and minimising the amount of daysthat its vessels are off-hire for reasons other than scheduled repairs orrepairs 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 costsof spares and consumable stores, tonnage taxes and other miscellaneous expenses,are calculated by dividing vessel operating expenses by ownership days for therelevant period. (7) TCE rates are defined as our time and voyage charter revenues less voyageexpenses during a period divided by the number of our available days during theperiod, which is consistent with industry standards. Voyage expenses includeport charges, bunker (fuel oil and diesel oil) expenses, canal charges andcommissions. TCE rate is a standard shipping industry performance measure usedprimarily to compare daily earnings generated by vessels on time charters withdaily earnings generated by vessels on voyage charters, because charter hirerates for vessels on voyage charters are generally not expressed in per dayamounts while charter hire rates for vessels on time charters are generallyexpressed in such amounts. - ENDS - This information is provided by RNS The company news service from the London Stock Exchange