5 Feb 2009 07:00
Goldenport Holdings Inc.
Athens, 5 February 2009
TRADING UPDATE AND PRE-CLOSE STATEMENT
PRE-CLOSE STATEMENT
The Board of Directors of 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 is pleased to report that the results for the full year ended 31 December 2008 are expected to be in line with market expectations. The Company's final results for the year ended 31 December 2008 will be announced in the week commencing Monday 9 March 2009.
INTERIM MANAGEMENT STATEMENT
Goldenport releases today the update on the trading of its fleet as of 4 February 2009 and the fourth Interim Management Statement for the period from 1 October 2008 to 31 December 2008.
Current Trading Outlook:
In response to the current challenging financial and shipping environment, Goldenport's management has pursued several initiatives aimed to safeguard the Company's financial health and operational stability, while at the same time positioning the Company to take advantage of accretive fleet expansion opportunities, as these may occur now or in the future. In this context, management's focus has been on preserving cash and enhancing liquidity, optimising the use of cash flow and maintaining a high level of fleet utilization. Specifically, the following actions have been taken:
Debt refinancing: On 29 January 2009, the Company refinanced existing debt of US$38.1 million, of which US$33.1 million was maturing in 2009. According to the new repayment schedule the loan will be repaid in 18 quarterly instalments with a final balloon payment of US$13.8 million together with the last instalment;
Delayed delivery of new-buildings: On 26 January 2009, the Company agreed with the COSCO shipyard to reschedule the four new building contracts previously due for delivery in late 2009, at no additional cost. According to the new schedule, the first pair of vessels is expected to be delivered in the first half of 2010 and the second pair in the first half of 2011. This will allow the Company to defer US$7.6 million of cash payments from 2009 to 2010. The existing charter contracts on these new-buildings remain valid and will commence upon delivery of the respective vessels. Also, the already secured bank financing remains in place.
Extension of time charters expiring in 2009: Certain of our bulk carrier vessels that were due to complete their contracts in 2009, were extended at rates above the current market conditions, thereby enabling Goldenport to maintain a high level of fleet utilization. As of today, we have secured for our current operational fleet 76% of the available days for 2009, 45% for 2010 and 29% for 2011 under fixed period employment translating to revenues of US$162 million.
Full compliance with debt covenants: The Company, due to the selective vessel acquisitions in the past and its low gearing policy, is in compliance with the covenants of the existing debt;
Profitable sale of fully depreciated older vessels adding to our cash balances: As of 31 December 2008 the cash balance was US$33.2 million, including US$2.2 million of net proceeds from the profitable disposals of the 1978-built container vessels 'Tuas Express' and 'Achim', during the last quarter.
Furthermore, in light of the current and likely market conditions for the foreseeable future, rather than adopting the usual dividend payment ratio in excess of 50% of earnings, Goldenport currently expects to propose a final dividend of approximately 2 pence per share for the financial year ended 31 December 2008. Depending on market conditions at the time, it is likely that this cash dividend will be accompanied by a scrip dividend alternative. In this case, Captain Paris Dragnis, CEO, and John Dragnis, Commercial Director, would both undertake to elect for the scrip dividend alternative in respect of at least 50% of their holdings. Including the interim dividend already paid in October 2008 the total dividend for year 2008 is expected to be approximately 10 pence per share, which the Board believes is appropriate given the market circumstances.
CEO Statement:
Captain Paris Dragnis, Founder and Chief Executive Officer of Goldenport, commented:
"Since the commencement of the sharp market decline in the last quarter of 2008, we have taken the necessary steps to ensure that our Company will weather through the storm in the shipping and financial markets. Shipping markets have been affected by the lack of trade financing and lower demand for goods which diminished the volume of cargo transported and resulted in reduced demand for ships and lower freight rates.
"Our actions aim to achieve two main objectives: (i) to protect the wealth that has already been created and safeguard our Company if the market decline continues; and (ii) to position our Company to take advantage of accretive fleet expansion opportunities which may arise, both during this time of distress and when the economic cycle improves. In order to be successful, we believe that we must maintain high utilisation of our asset base, accumulate additional cash and optimise the use of our cash flow.
"We started 2009 with more than 76% of the available days of our operational fleet already fixed; we have already arranged to refinance existing debt; we rescheduled at no additional cost the four COSCO new build orders, deferring capital payments to 2010; we profitably sold fully depreciated vessels; we started the year with more than thirty three million dollars of cash reserves. All these actions support the accumulation of cash, strengthen our balance sheet and optimise the use of our cash flow allowing us to actively evaluate acquisition opportunities as these arise.
"Current market conditions and those likely in the foreseeable future dictate that we should manage the Company even more prudently than normally. Therefore, the Board rather than adopting the usual dividend payment ratio in excess of 50% of operating earnings, expects to propose a final dividend of approximately 2 pence per share for the financial year ended 31 December 2008, accompanied by a scrip dividend alternative. Myself as the major shareholder of Goldenport, I will elect for the scrip dividend alternative in respect of at least 50% of my holding, indicating my belief in the long terms prospects of our Company and supporting it to come out of the turmoil stronger and larger.
"We are currently navigating rough waters mainly as the result of the crisis in the financial markets that has affected economic growth around the world. However, as a result of the credit crunch and the low freight rates many new building orders have been cancelled and scrapping has increased significantly, thereby positively affecting fleet supply. On the demand side, we believe that the sustained efforts of governments around the world to stimulate the economies of their countries and to unclog the financial markets will gradually restore order and balance in the global economy and the financial system, but it will take some time. Despite its cyclicality and volatility, shipping is a vital link in global trade and in the global economy and we are in this business for the long term. Weak markets can actually create opportunities for strong companies, like ours, and our objective is to navigate through this storm and come out maximizing shareholder value for the long term."
Operational Fleet Forward Coverage:
The percentage of available days of the fleet already fixed under contracts as of 4 February 2009 (assuming the earliest charter expiration) is as follows:
| 2009(1) (2) | 2010(1) (2) | 2011 (2) | |
| Total Fleet | 76% (82%) | 45% (50%) | 29% |
| Containers | 82% (92%) | 54% (63%) | 39% |
| Bulk Carriers | 63% (62%) | 27% (26%) | 5% |
(1) Percentage of available days of the fleet fixed under contract as reported on 30 October 2008 is given in brackets.
(2) The percentages above include only the currently operational fleet of 18 vessels and the vessel 'MSC Fortunate' and exclude the ten new-build vessels for which we expect delivery in the future and the vessel 'Athos' which is expected to be sold.
On the same basis, the estimated total revenue for the years 2009, 2010 and 2011 deriving from contracts already fixed for the operational part of the fleet is US$ 162 million. This calculation excludes the ten new-build vessels for which we expect delivery in the future.
Fleet Employment Profile:
| Operational fleet | ||||||
| Vessel | Type | Capacity | Rate (US$) per day | Earliest | ||
| Expiration (1) | ||||||
| Containers | TEU | |||||
| 1 | MSC Fortunate | Post Panamax | 5,551 | Note 2 | ||
| 2 | Bosporus Bridge | Sub Panamax | 3,720 | 14,750 | Feb-12 | |
| 3 | MSC Finland | Sub Panamax | 3,032 | 16,500 | Feb-10 | |
| 4 | MSC Scotland | Sub Panamax | 3,007 | 20,770 | Sep-09 | |
| 5 | MSC Anafi | Sub Panamax | 2,420 | 20,500 | Apr-09 | |
| 6 | MSC Socotra | Sub Panamax | 2,258 | 14,350 | Mar-13 | |
| 7 | Howrah Bridge | Sub Panamax | 2,257 | 14,180 | Jul-09 | |
| 8 | MSC Himalaya | Sub Panamax | 2,108 | 14,500 | Jul-10 | |
| 9 | MSC Accra | Sub Panamax | 1,889 | 14,200 | Jun-12 | |
| 10 | Gitte (3) | Handy | 976 | Euro 9,300 | Aug-09 | |
| 11 | Tiger Star (ex-Brilliant) | Handy | 976 | 8,000 | Apr-09 | |
| 12 | MSC Mekong | Handy | 962 | 6,150 | Mar-09 | |
| 7,000 | Jan-11 | |||||
| 13 | MSC Emirates | Handy | 934 | 7,000 | Feb-09 | |
| 7,000 | Dec-11 | |||||
| Dry Bulk | DWT | |||||
| 14 | Vasos | Capesize | 152,065 | 23,950 | Feb-11 | |
| 15 | Gianni D | Panamax | 69,100 | 15,500 | May-09 | |
| 16 | Alex D | Handymax | 52,315 | Note 4 |
| |
| 17 | Limnos | Handymax | 52,266 | 5,750 | Feb-09 | |
| 18 | Lindos | Handymax | 52,266 | 14,500 | Jul-09 | |
| 19 | Tilos | Handymax | 52,266 | 20,500 | Aug-10 | |
| Vessels under construction | ||||||
| Vessel / Yard name | Type | Capacity | Scheduled Delivery | |||
| Containers | TEU | |||||
| 20 | Jiangsu Yangzijiang | Sub Panamax | 2,500 | 2010 | ||
| 21 | Jiangsu Yangzijiang | Sub Panamax | 2,500 | 2011 | ||
| Vessel or Yard name | Type | Capacity | Scheduled Delivery | Rate (US$) per day | ||
| Dry Bulk | DWT | |||||
| 22 | COSCO (5) | Supramax | 57,000 | 2010 | 17,650+50% profit share at BSI + 5% | |
| 23 | COSCO | Supramax | 57,000 | 2010 | Note 4 | |
| 24 | COSCO (5) | Supramax | 57,000 | 2011 | 25,000 | |
| 25 | COSCO (5) | Supramax | 57,000 | 2011 | 17,700+50% profit share at BSI + 5% over 18,200 | |
| 26 | QINGSHAN (5) | Supramax | 57,000 | 2010 | 27,000 | |
| 27 | QINGSHAN | Supramax | 57,000 | 2010 | - | |
| 28 | JES (5) (6) | Supramax | 53,800 | 2009 | 18,000 | |
| 29 | JES (6) | Supramax | 53,800 | 2009 | Commercially managed by Glencore AG | |
| (1) Represents earliest day on which the charter may redeliver the vessel | ||||||
| (2) The vessel ' MSC Fortunate' is en route to be delivered to a four year charter in February 2009 | ||||||
| (3) The charter of the vessel Gitte is received in Euros | ||||||
| (4) The charterer of Alex D will declare by March one out of the following three options: | ||||||
| (a) US$26,000 per day until October 2009 | ||||||
| (b) US$25,000 per day until November 2009 | ||||||
| (c) US$20,000 per day until October 2009 and the COSCO New Build to be delivered in 2010 for | ||||||
| US$15,000 per day +50% profit share at BSI+5% for 2 years from delivery | ||||||
| (5) The charter term is for three years from delivery | ||||||
| (6) Both vessels owned under a 50:50 joint venture with Glencore AG | ||||||
Fleet Development:
The Company is currently in advanced negotiations with the charterer of the 1977-built bulk carrier vessel 'Athos' to terminate the charter contract earlier than initially agreed, for a considerable cash consideration. Upon successful completion of the negotiations, the Company is likely to explore the possibility of a profitable sale of the fully depreciated debt-free vessel.
In January 2009 an agreement was reached with the COSCO (Zhoushan) Shipyard Co., Ltd, to reschedule the delivery dates of the four new-build 57,000 DWT bulk carriers on order with the yard, at no additional cost. Pursuant to the rescheduling, the delivery dates for those four vessels will now take place between four and eighteen months after their originally agreed delivery dates in late 2009. Two vessels are now expected to be delivered in the first half 2010 and the other two in the first half of 2011. The existing charter contracts remain valid and will commence upon delivery of the respective vessels and the already secured bank financing remains in place.
In January 2009, the Company took delivery of the vessel 'MSC Fortunate' (previous name 'Fortune') from COSCO (Zhoushan) Shipyard Co., Ltd in China. The vessel is en route to be delivered to a four-year charter contract within February.
On 9 December 2008, the 1978-built fully depreciated container vessel 'Tuas Express' with carrying capacity of 485 TEU was sold for demolition for a net consideration of US$0.9 million, realising profit of US$0.3 million.
On 29 October 2008, the 1978-built fully depreciated container vessel 'Achim' with carrying capacity of 930 TEU was sold for demolition for a net consideration of US$1.3 million, realising profit of US$0.3 million.
Fourth Quarter 2008, Selected Financial and Operating Data:
| Balance Sheet Data (in US$ million): |
| 31 December 2008 (Unaudited) |
| Gross Debt | 149.4 | |
| Cash | 33.2 | |
| Net Debt | 116.2 | |
| Expected Net Debt to book capitalization | 30.6% | |
| FLEET DATA: |
| Quarter 4, 2008 |
| Average number of vessels in operation | (1) | 20.1 |
| Vessels on dry-docking within the period | 2 | |
| Number of vessels at end of period: | ||
| -Operating | 19 | |
| -Under reconstruction | 1 | |
| -New Buildings under construction | 10 | |
| Ownership days | (1) (2) | 1,847 |
| Available days | (1) (2) | 1,718 |
| Operating days | (1) (2) | 1,677 |
| Fleet utilization | 97.6% | |
(1): Number of vessels in operation, ownership, available and operating days in fourth quarter, include the vessel 'Achim' that was sold on 29 October 2008 and 'Tuas Express' that was sold on 9 December 2008.
(2): Ownership, available and operating days exclude the vessel Fortune and the 10 vessels that will be delivered in a future date.
- ENDS -
For further information, please contact:
Goldenport Holdings Inc.:
Christos Varsos, Chief Financial Officer +30 210 8910 500
John Dragnis, Commercial Director +30 210 8910 500
Investor Relations Coordinators:
Capital Link:
Annie Evangeli - London +44 203 206 1320
Nicolas Bornozis - New York +1 212 661 7566
E-mail: goldenport@capitallink.com
Further Information:
Overview of Goldenport
Goldenport is an international shipping company that owns and operates a fleet of twenty-nine container and dry bulk vessels that transport cargo worldwide. The fleet consists of fifteen container vessels (including two new-build vessels with deliveries scheduled for 2010 and 2011) and fourteen dry bulk carriers (including eight new-build vessels with deliveries scheduled for 2009, 2010 and 2011). Goldenport is listed on the London Stock Exchange under the ticker GPRT.
Website: www.goldenportholdings.com or www.goldenport.biz