The Third Quarter Financial Results
Ref. No. COR:MS/EL06011e/ms
11 August 2006
Subject : The Third Quarter Financial Results
To : The President of the Stock Exchange of Thailand
Overview
Thoresen Thai Agencies Public Company Limited ("TTA") recorded a consolidated net profit for the three-month period that ended on 30 June 2006 (the "2006 Third Quarter") of Baht 702.98 million, which included an exchange gain of Baht 129.33 million.
During the three-month period that ended on 30 June 2005 (the "2005 Third Quarter"), TTA recorded a consolidated net profit of Baht 1,321.28 million, which included an exchange loss of Baht 433.23 million. The drop in the consolidated net profit was primarily due to lower TC rates, higher vessel operating expenses, and a stronger Thai Baht currency.
The average TC rate, including contributions from chartered-in tonnage, fell 35.89% from USD 16,334 per vessel per day in the 2005 Third Quarter to USD 10,471 per vessel per day in the 2006 Third Quarter. TTA had a total of 4,130 available vessel days in the 2006 Third Quarter, compared to 4,349 available vessel days in the 2005 Third Quarter.
Business Segment Analysis
TTA will discuss our financial results based on our three business segments: the Shipping Business, the Offshore Marine Service Business, and Other Service Businesses.
Shipping Business: The Shipping Business recorded a consolidated net profit of Baht 422.95 million, excluding exchange gains. The net profits of the Shipping Business fell 29.39% between the three-month period that ended on 31 March 2006 (the "2006 Second Quarter") and the 2006 Third Quarter due to lower TC rates, higher vessel operating expenses, and a stronger Thai Baht currency.
The average TC rate, including contributions from chartered-in tonnage, fell 2.84% from USD 10,777 per vessel per day in the 2006 Second Quarter to USD 10,471 per vessel per day in the 2006 Third Quarter. Our total fleet cargo volume from 1 October 2005 to 30 June 2006 rose by 7.55% to 10.42 million revenue tons compared to the first nine months of the last financial year.
Cont. 2.../
Thoresen Thai Agencies Plc.
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Based on these cargo volume figures, we believe that freight market demand should remain strong heading into our next financial year.
TTA had a total of 4,130 vessel days available in the 2006 Third Quarter, compared to 4,149 vessel days available in the 2006 Second Quarter. Vessel operating expenses increased due to a number of reasons, including accelerated amortization of previous dry-docking expenses for five vessels (given sailing schedules, these vessels had the opportunity to perform earlier than scheduled dry-dock repairs) and accidents on two vessels that required immediate repairs. The Shipping Business did not acquire any new vessels during the 2006 Third Quarter. As we are nearing the end of this financial year, the Shipping Business has already placed 25% of our available capacity on time charters for the 2007 financial year, which will provide earnings visibility into next year.
Offshore Marine Service Business: Mermaid Maritime Limited ("MML") posted good quarterly results, driven by the strong offshore oil and gas market. The two drilling rigs, MTR-1 and MTR-2, have been booked by oil and gas exploration companies through the middle of 2009 and generated approximately 41.03% and 66.25% of MML's total revenues and profits, respectively. The assets in our sub sea engineering business were heavily utilized during the quarter and generated approximately 57.27% and 45.04% of MML's revenues and profits, respectively. All key assets are fully employed in this quarter, so we expect another good performance from MML. Excluding exchange gains, MML made a total revenue contribution of Baht 999.87 million and a net profit contribution (after deducting minority interests) of Baht 154.41 million to TTA's financial results.
Other Service Businesses: The Other Service Businesses made a net profit contribution (after deducting minority interests) of Baht 32.07 million, excluding exchange gains, to TTA's financial results. Thoresen Shipping FZE and ISS Thoresen Agencies Ltd. made the highest net contributions.
Yours faithfully,
Thoresen Thai Agencies Public Company Limited
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M.L. Chandchutha Chandratat Ms. Nuch Kalyawongsa
Managing Director Director,Group Finance/Accounting