TTA announces Q3 earnings of Bt 297 million, a 60% YoY increase
- Reconfigured dry bulk shipping fleet generates improved time charter equivalent ("TC") rates
- Encouraging signs of recovery at Mermaid Maritime PCL ("Mermaid"), as its subsea business achieves higher utilisation rates and day rates and its drilling business extends MTR-2's contract by another 270 days
- Asia Offshore Drilling Ltd. ("AOD") successfully completes its USD 80 million fund raising and lists on Oslo Axess
- Promising contributions from recent diversification investments, such as Petrolift Inc. and Baria Serece
- Good progress made by Unique Mining Services PCL ("UMS") to strengthen its market share and reduce its 0-5 mm coal inventory
- Baconco continues to benefit from strong fertiliser demand
Bangkok, 16 August 2011 -- Despite difficult conditions in the dry bulk shipping and subsea businesses, Thoresen Thai Agencies PCL ("TTA") announced third quarter profits ("Q3FY11":1 April to 30 June 2011) of Baht 297 million on revenues of Baht 4,376 million. While revenues fell 4% from Baht 4,542 million during the same period last year, profits were 60% higher than last year's Baht 185 million.
Group Transport provided Baht 98 million of profit contribution, a 152% increase quarter-on-quarter ("QoQ"), but a 77% decrease year-on-year ("YoY"). The dry bulk shipping business continued to experience a vessel oversupply situation. However, TTA's reconfigured fleet generated 17% higher TC rates QoQ versus a 1% increase in the Baltic Dry Index ("BDI").
Approximately Baht 205 million of gains on sales of seven older vessels were booked in Q3FY11. At the end of Q3FY11, TTA's modernised dry bulk shipping fleet consisted of 18 vessels with an average age of 11.5 years and a per-vessel capacity of 37,107 DWT, enhancing its ability capture greater value through the current industry downturn.
Equity income for Group Transport continued to grow, as Petrolift Inc.'s profits grew 33% QoQ.
Group Infrastructure provided Baht 88 million of profit contribution, down 37% YoY and 2% QoQ, as UMS sold more than 200,000 tonnes of its 0-5 mm coal inventory. Other infrastructure group companies maintained consistent performances.
UMS reported a consolidated net profit of Baht 10 million in Q3FY11 with a contribution to TTA of Baht 6 million. UMS sold 404,221 tonnes of coal in Q3FY11, 50% of it in the 0-5 mm category, which has a lower selling price than other coal. As a result, gross margins were lower QoQ.
Baconco recorded another strong quarter with net profit of Baht 68 million in Q3FY11. The robust sales were driven by high fertiliser demand in May and June.
Group Energy provided Baht 22 million of profit contribution, 115% growth YoY and 118% growth QoQ. Positive momentum in Mermaid's subsea engineering business resulted in profits after five consecutive quarters of losses.
Mermaid recorded a consolidated net profit of Baht 44 million in Q3FY11, contributing Baht 26 million to TTA's net profit. The subsea engineering group had 75% asset utilisation in Q3FY11, compared to 57% in Q3FY10, though day rates remained relatively low throughout the quarter.
The offshore drilling segment benefitted from MTR-2 running at full utilisation (99.8%) during Q3FY11. The rig was awarded a 270-day contract extension. Also in Q3, AOD successfully completed its second round of fund raising by forming a strategic partnership with Seadrill Ltd. The company was listed on Oslo Axess in Norway in July 2011.
TTA further benefited from realised gains on a USD/JPY cross currency swap.
"We are encouraged by the performances of our group companies, with all three business lines contributing positive results in Q3FY11. Through continued emphasis on its diversification strategy, TTA has achieved a good balance in its revenue mix, with 28% coming from Transport, 33% from Energy, and 39% from Infrastructure. These positive results come in even as all global shipping segments including dry-bulk shipping continued to face tough conditions this past year. It is our hope that shipping markets will improve in the coming two years .
"We are working hard to improve the fundamentals of our Group businesses and are pleased that many of the investments we have made are providing encouraging returns. While substantial challenges in our respective businesses remain, we will continue focusing on creating long-term shareholder value and persist in making prudent management decisions in support of this commitment," commented M.L. Chandchutha Chandratat, TTA's President & CEO.