TTA 2nd Quarter Net Profit Exceeds Baht 2.10 Billion with An Interim Dividend Payment of Baht 1.50 per Share
Thoresen Thai Agencies Public Company Limited ("TTA") reported another strong financial performance, with net profits of Bht. 2,103.64 million for the period between 1 January 2008 to 31 March 2008 (the "2008 Second Quarter"). The Board of Directors also announced an interim dividend of Baht 1.50 per share to be paid to TTA shareholders on 13 June 2008.
M.L. Chandchutha Chandratat, Managing Director of TTA, revealed that "The 2008 Second Quarter marked another excellent quarter of consolidated net profits for TTA and was the result of continuing strength in both the dry bulk shipping and offshore services markets".
The consolidated net profit for the 2008 Second Quarter of Baht 2,103.64 million, which included an exchange gain of Baht 150.58 million, resulted in earnings per share of Baht 3.27 or an increase of 62.84% compared to the consolidated net profit for the period between 1 January 2007 to 31 March 2007.
Total operating revenues for the 2008 Second Quarter were Baht 7,975.95 million, total operating expenses were Baht 5,365.21 million, and other expenses were Baht 607.07 million. The average time charter equivalent ("TC") rate, including net contributions from chartered-in tonnage, increased 73.55% from US$ 14,453 per vessel per day in the 2007 Second Quarter to US$ 25,083 per vessel per day in the 2008 Second Quarter.
The increase in TTA's consolidated net profit was primarily due to high utilisation and strong freight or day rates in the dry bulk shipping and offshore services businesses, which were offset by a stronger Thai Baht currency (resulting in lower reported Thai Baht revenues) and lower than expected contributions in the drilling business.
The Dry Bulk Shipping Group has placed 23.23% of our available capacity on period time charters by the end of the 2008 Second Quarter and 5.72 % of its available capacity on period time charters for the next financial year, which will provide earnings visibility into next year.
The Shipping Services Group made a net profit contribution (after deducting minority interests) of Baht 67.99 million, excluding exchange losses, to TTA's financial results. Thoresen Shipping FZE made the highest net contributions, followed by Fearnleys (Thailand) Ltd., which are benefiting from strong freight market conditions.
The assets in Mermaid Maritime Public Company Limited's ("Mermaid") subsea engineering segment had an 87.73% utilisation rate during the 2008 Second Quarter, and generated 78.86% and 115.12% of Mermaid's revenues and operating profits, excluding exchange gains, respectively. This strong performance was a result of higher day rates and strong utilisation in a historically low quarter.
"The overall dry bulk shipping market actually fell in the 2008 Second Quarter. The average Baltic Dry Index was 10,308 and 7,343 in first and second quarters of the current financial year, respectively. The overall market is rising in the current quarter, as the Baltic Dry Index exceeded 10,000 on 14 May 2008, which is near to its all-time high. The Baltic Supramax Index was US$ 64,036 per day on 14 May 2008.
The dry bulk segment continues to achieve extremely high fleet utilisation, as R.S. Platou estimates that global fleet utilisation was close to 100%. The amount of vessels ordered for delivery in 2009 and onwards causes concern. However, uncertainty of the delivery schedule for several yards, financing issues, and continued high growth in the iron ore and coal segments reduces the risk for a major setback.
As for the market sentiment for tender rigs remains strong as confirmed by recent fixtures in the region of US$ 115,000 per day. As tender rigs primarily do production drilling, the contract duration for tender rigs is usually longer term, and the contracts are entered into well in advance of commencement. We believe that the outlook is favorable and expect that the market will continue to offer good opportunities to facilitate further organic growth", M.L. Chandchutha said.
The Board of Directors of TTA announced an interim dividend of Baht 1.50 to the holders of 643,684,422 ordinary shares of TTA whose names appear in TTA's shareholders register at 12.00 P.M. on 30 May 2008. The dividend payment will be made on 13 June 2008.
TTA is a leader in the dry bulk shipping industry, providing liner and charter services, and is a major player in Southeast Asian offshore services through Mermaid. TTA is amongst the top 50 companies listed on the Stock Exchange of Thailand with high liquidity.