The First Quarter Financial Results
Ref. No. COR:MS/EL07007e/ms
14 February 2007
Subject : The First 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 31 December 2006 (the "2007 First Quarter") of Baht 1,128.98 million, which included an exchange gain of Baht 271.67 million.
During the three-month period that ended on 31 December 2005 (the "2006 First Quarter"), TTA recorded a consolidated net profit of Baht 927.56 million, which included an exchange loss of Baht 36.19 million.
The average TC rate, including contributions from chartered-in tonnage, increased 10.87% from USD 11,535 per vessel per day in the 2006 First Quarter to USD 12,789 per vessel per day in the 2007 First Quarter. Available vessel days fell 5.31% from 4,372 days in the 2006 First Quarter to 4,140 vessel days in the 2007 First Quarter.
The increase in the consolidated net profit was primarily due to stronger TC rates and a stronger Thai Baht currency, which was offset by higher vessel operating expenses.
Business Group Analysis
TTA will discuss our financial results based on our three business groups: the Dry Bulk Shipping Group, the Offshore Services Group, and the Shipping Services Group.
Dry Bulk Shipping Group: The Dry Bulk Shipping Group recorded a consolidated net profit of Baht 734.33 million, excluding exchange gains. The net profits of the Dry Bulk Shipping Group increased 20.66% between the 2007 First Quarter and the 2006 Fourth Quarter.
The higher net profit was primarily due to higher TC rates. The average TC rate, including contributions from chartered-in tonnage, increased 10.57% from USD 11,566 per vessel per day in the 2006 Fourth Quarter to USD 12,789 per vessel per day in the 2007 First Quarter.
Cont. 2.../
Thoresen Thai Agencies Public Company Limited
| Page 2 | Ref. No. COR:MS/EL07007e/ms |
Our total fleet cargo volume from 1 October 2006 to 31 December 2006 remained strong at 2.94 million revenue tons. Based on ongoing client discussions, we believe that demand from our core markets of China, Southeast Asia, India, and the Middle East will continue throughout our current financial year.
TTA had a total of 4,140 vessel days available in the 2007 First Quarter, compared to 4,180 vessel days available in the 2006 Fourth Quarter. Vessel operating expenses decreased 9.17%, because we recorded no special items, such as accelerated amortization of drydocking expenses during the quarter.
The Dry Bulk Shipping Group has already placed 29.59% of our available capacity on time charters for the current financial year and 16.66% of our available capacity on time charters for the next financial year, which will provide earnings visibility into next year.
Offshore Services Group: Mermaid Maritime Public Company Limited ("MMPLC") posted decent quarterly results, but we expect higher performance from MMPLC through the remainder of the current financial year. The drilling segment generated approximately 32.83% and 32.73% of MMPLC's total revenues and profits, respectively. One drilling rig, MTR-1, was off-hire for part of the 2007 First Quarter due to a scheduled special survey and subsequent relocation from Malaysia to Indonesia. On the other hand, the assets in our sub sea engineering segment had a 75% utilisation rate during the quarter and generated approximately 64.99% and 66.59% of MMPLC's revenues and profits, respectively. Excluding exchange gains, MMPLC made a total revenue contribution of Baht 802.24 million and a net profit contribution (after deducting minority interests) of Baht 110.39 million to TTA's financial results.
Shipping Services Group: The Other Service Businesses made a net profit contribution (after deducting minority interests) of Baht 49.03 million, excluding exchange gains, to TTA's financial results. Thoresen Shipping FZE made the highest net contributions.
Excluding foreign exchange gains and minority interests, the 2007 First Quarter marked the third consecutive quarter of higher consolidated net profits for TTA, which demonstrates the benefits of our ongoing diversification strategy and the strength of both the dry bulk shipping and offshore markets.
Yours faithfully,
Thoresen Thai Agencies Public Company Limited
| --------------------------- M.L. Chandchutha Chandratat Managing Director | ---------------------- Ms. Nuch Kalyawongsa Director, Group Finance/Accounting |