Bangkok--16 May--Kith & Kin
Thoresen Thai Agencies Plc. (“TTA”) posted a net profit of Baht 1,051 million for the three-month period that ended on 31 March 2006 (“Q2/2006”). The results were driven by healthy dry bulk shipping demand, as evidenced by the 10.91% increase in TTA’s cargo volume for the first six months of this year compared to the first six months of last year. TTA believes that the dry bulk shipping market will continue to enjoy solid demand growth for the foreseeable future.
Its offshore marine services business, Mermaid Maritime Limited (“MML”), achieved a 100% revenue increase from the three-month period that ended on 31 December 2006 (“Q1/2006”) to Q2/2006. This revenue gain provides evidence that MML will be a stronger financial contributor in the second half of this year.
M.L. Chandchutha Chandratat, Managing Director of TTA, said the consolidated net profit of Baht 1,051 million included an unrealised foreign exchange gain of Baht 487 million. The consolidated net profit for the three-month period that ended on 31 March 2005 (“Q2/2005”) was Baht 1,413 million, which included an exchange gain of Baht 7.42 million.
The decrease in the consolidated net profit was primarily due to lower time charter equivalent (“TC”) rates, which fell 31.37 per cent from US$ 15,703 per vessel per day in Q2/2005 to US$ 10,777 per vessel per day in Q2/2006. Furthermore, TTA had a total of 4,149 available vessel days in Q2/2006 compared to 4,230 available vessel days in Q2/2005.
He said the fluctuation in freight rates was influenced by global dry bulk supply and demand conditions. The financial results of TTA in Q2/2006 are in many respects better than expected, given the increased supply of new vessels. Since the dry bulk fleet is growing on an annualised basis of more than 7% in 2006, shipping demand is demonstrating good growth. The market has been able to absorb the increased supply of dry bulk vessels.
Even with a slightly lower number of vessel days, the company’s total fleet cargo volume from October 1, 2005 to March 31, 2006 surged by 10.91 per cent to 6.98 million revenue tons, he said.
In Q2/2006, the company sold two old vessels and increased the cargo capacity of two other vessels, M.V. Thor Nautica and M.V. Thor Nautilus. Therefore, the company decided not to acquire any new vessels in Q2/2006, he said.
At this time, TTA has approximately 42% of its available capacity on time charter contracts for the rest of the year. These time charter contracts are expected to provide earnings visibility in the next six months, he said.
Meanwhile, MML has significant growth potential, because the offshore oil and gas business is on the rise in world markets.
In Q2/2006, MML made a total revenue contribution of Baht 607.96 million and net profit contribution (after deducting minority interests) of Baht 83.07 million to TTA’s financial results. In Q1/2006, MML made a total revenue contribution of Baht 341.71 million and net profit contribution (after deducting minority interests) of Baht 52.34 million to TTA’s financial results.
The demand for tender drilling rigs continues to remain high. Mermaid’s two drilling rigs, MTR-1 and MTR-2, have been booked through Q4 of 2009. In 2006, the day rates on the tender rigs range between US$ 40,000 — US$ 44,000 per day, but will continually increase to US$ 50,000 — US$ 55,000 per day in 2009.
There are only 22 tender drilling rigs in the world, including MML’s two rigs. Since they are designed to work in calm seas, the tender drilling rigs are appropriate for use in Southeast Asia.
MML’s sub sea engineering business did not achieve any profits in Q2/2006, because its primary diving support vessel, M.V. Mermaid Commander, was off-hire for most of the period due to its repositioning from Canada into the Gulf of Thailand.
TTA’s other service businesses reported a net profit contribution of Baht 21.44 million in Q2/2006 versus Baht 41.91 million in Q1/2006.
In light of TTA’s financial results for the first 6 months of this year, the Board of Directors approved a dividend of Baht 0.65 per share. The ex-dividend date (“XD”) will be 23 May 2006. The closing date for the shareholders register book will be 26 May 2006 at 12:00 PM, and the dividend payment will be made on 9 June 2006.
For further information
Khun Bang-orn Kaewbovorn, 02-663-3226-9 Ext 68
Mobile: 01-904-7907