The Second Quarter Financial Results
Ref. No. COR:MS/EL06008e/ms
11 May 2006
Subject : The Second Quarter Financial Results
To : 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 31 March 2006 (the "2006
Second Quarter") of Baht 1,051.78 million, which included an exchange gain of
Baht 487.20 million.
During the three-month period that ended on 31 March 2005 (the "2005 Second
Quarter"), TTA recorded a consolidated net profit of Baht 1,413.41 million,
which included an exchange gain of Baht 7.42 million. The drop in the
consolidated net profit was primarily due to lower TC rates.
The average TC rate, including contributions from chartered-in tonnage, fell
31.37% from USD 15,703 per vessel per day in the 2005 Second Quarter to USD
10,777 per vessel per day in the 2006 Second Quarter. TTA had a total of 4,149
available vessel days in the 2006 Second Quarter, compared to 4,230 available
vessel days in the 2005 Second 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 598.97 million, excluding exchange gains. The net profits of the Shipping
Business fell 33.71% between the three-month period that ended on 31 December
2005 (the "2006 First Quarter") and the 2006 Second Quarter due to lower TC
rates, lower available vessel days, and a stronger Thai Baht currency.
The average TC rate, including contributions from chartered-in tonnage, fell
6.57% from USD 11,535 per vessel per day in the 2006 First Quarter to USD
10,777 per vessel per day in the 2006 Second Quarter. Our total fleet cargo
volume from 1 October 2005 to 31 March 2006 rose by 10.91% to 6.98 million
revenue tons compared to the first six months of the last financial year. Based
on these cargo volume figures, we believe that freight market demand remains
healthy and has been able to absorb the increased supply of new dry bulk
vessels, albeit at lower TC rates.
TTA had a total of 4,149 vessel days available in the 2006 Second Quarter,
compared to 4,372 vessel days available in the 2006 First Quarter, primarily
due to the sale of the M.V. Heron and M.V. Herakles and the special lengthening
project on the M.V. Thor Nautica and M.V. Thor Nautilus. The Shipping Business
did not acquire any new vessels during the 2006 Second Quarter. The Shipping
Business has placed 42% of our available capacity on time charters for the
2006 financial year, which will provide earnings visibility through the
remaining quarters.
Offshore Marine Service Business: The Offshore Marine Service Business is
managed through Mermaid Maritime Limited ("MML"). The two drilling rigs, MTR-1
and MTR-2, became fully operational in late December 2005 and have been booked
by oil and gas exploration companies through 2009. The sub sea engineering
business did not achieve any significant profits, because its primary diving
support vessel, M.V. Mermaid Commander, was off-hire for most of the 2006
Second Quarter. The vessel sailed from Canada to Thailand on its repositioning
voyage and went into dry-docking. It has begun its operations in the Gulf of
Thailand since March 2006. With all key assets fully operational, we expect
that MML will demonstrate improved revenues and net profits through the
remaining quarters. MML made a total revenue contribution of Baht 607.96
million and a net profit contribution (after deducting minority interests) of
Baht 83.07 million to TTA's financial results.
Other Service Businesses: The Other Service Businesses made a net profit
contribution (after deducting minority interests) of Baht 21.44 million to
TTA's financial results. Thoresen Shipping FZE, Fearnleys (Thailand) Ltd.,
and ISS Thoresen Agencies Ltd. made the highest net contributions.
Yours faithfully,
Thoresen Thai Agencies Public Company Limited
--------------------------- ------------------------
M.L. Chandchutha Chandratat Ms. Nuch Kalyawongsa
Managing Director Director Group Finance/Accounting
11 May 2006
Subject : The Second Quarter Financial Results
To : 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 31 March 2006 (the "2006
Second Quarter") of Baht 1,051.78 million, which included an exchange gain of
Baht 487.20 million.
During the three-month period that ended on 31 March 2005 (the "2005 Second
Quarter"), TTA recorded a consolidated net profit of Baht 1,413.41 million,
which included an exchange gain of Baht 7.42 million. The drop in the
consolidated net profit was primarily due to lower TC rates.
The average TC rate, including contributions from chartered-in tonnage, fell
31.37% from USD 15,703 per vessel per day in the 2005 Second Quarter to USD
10,777 per vessel per day in the 2006 Second Quarter. TTA had a total of 4,149
available vessel days in the 2006 Second Quarter, compared to 4,230 available
vessel days in the 2005 Second 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 598.97 million, excluding exchange gains. The net profits of the Shipping
Business fell 33.71% between the three-month period that ended on 31 December
2005 (the "2006 First Quarter") and the 2006 Second Quarter due to lower TC
rates, lower available vessel days, and a stronger Thai Baht currency.
The average TC rate, including contributions from chartered-in tonnage, fell
6.57% from USD 11,535 per vessel per day in the 2006 First Quarter to USD
10,777 per vessel per day in the 2006 Second Quarter. Our total fleet cargo
volume from 1 October 2005 to 31 March 2006 rose by 10.91% to 6.98 million
revenue tons compared to the first six months of the last financial year. Based
on these cargo volume figures, we believe that freight market demand remains
healthy and has been able to absorb the increased supply of new dry bulk
vessels, albeit at lower TC rates.
TTA had a total of 4,149 vessel days available in the 2006 Second Quarter,
compared to 4,372 vessel days available in the 2006 First Quarter, primarily
due to the sale of the M.V. Heron and M.V. Herakles and the special lengthening
project on the M.V. Thor Nautica and M.V. Thor Nautilus. The Shipping Business
did not acquire any new vessels during the 2006 Second Quarter. The Shipping
Business has placed 42% of our available capacity on time charters for the
2006 financial year, which will provide earnings visibility through the
remaining quarters.
Offshore Marine Service Business: The Offshore Marine Service Business is
managed through Mermaid Maritime Limited ("MML"). The two drilling rigs, MTR-1
and MTR-2, became fully operational in late December 2005 and have been booked
by oil and gas exploration companies through 2009. The sub sea engineering
business did not achieve any significant profits, because its primary diving
support vessel, M.V. Mermaid Commander, was off-hire for most of the 2006
Second Quarter. The vessel sailed from Canada to Thailand on its repositioning
voyage and went into dry-docking. It has begun its operations in the Gulf of
Thailand since March 2006. With all key assets fully operational, we expect
that MML will demonstrate improved revenues and net profits through the
remaining quarters. MML made a total revenue contribution of Baht 607.96
million and a net profit contribution (after deducting minority interests) of
Baht 83.07 million to TTA's financial results.
Other Service Businesses: The Other Service Businesses made a net profit
contribution (after deducting minority interests) of Baht 21.44 million to
TTA's financial results. Thoresen Shipping FZE, Fearnleys (Thailand) Ltd.,
and ISS Thoresen Agencies Ltd. made the highest net contributions.
Yours faithfully,
Thoresen Thai Agencies Public Company Limited
--------------------------- ------------------------
M.L. Chandchutha Chandratat Ms. Nuch Kalyawongsa
Managing Director Director Group Finance/Accounting