Annual Report
Latest Results
Global Oceanic Carriers Ltd. Announces Preliminary Financial Results for the Seven Months Ended December 31, 2007 and Recommends Dividend of 4.33 Pence Per Share
ATHENS, GREECE – March 14, 2008 – Global Oceanic Carriers Limited (AIM:GOC), a global provider of marine transportation services for dry bulk cargoes, announces today its financial and operational results for the seven months ended December 31, 2007.
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On December 5, 2007 the Company announced the change of its fiscal year end from May 31 to December 31, in order to align with the majority of other publicly listed shipping companies and make it easier for the investment community to follow GOC’s development and progress. Today’s announcement is made pursuant to this change in the fiscal year.
Seven Months Ended December 2007 Highlights:
- Time Charter Revenues of USD 26.3 million for the 7 months ended December 31, 2007 (unaudited 7 months ended December 31, 2006: USD 11.5 million).
- EBITDA of USD 15.8 million for the 7 months ended December 31, 2007 (unaudited 7 months ended December 31, 2006: USD 5.5 million).
- Net Profit of USD 6.9 million for the 7 months ended December 31, 2007 (unaudited 7 months ended December 31, 2006: USD 0.9 million).
- Earnings per share (EPS) of USD 0.172 calculated on 40,032,792 shares outstanding for the 7 months ended December 31, 2007.
- Final Dividend proposed of 4.33 pence per share for the period June 1, 2007 to December 31, 2007.
- Strong cash position with USD 14.8 million cash in bank, as of December 31, 2007.
- An average of 5.5 vessels were operated during the seven month period ended December 31, 2007 earning an average time charter equivalent (TCE) rate of USD 21,536 per day compared to an average of 3.4 vessels earning an average TCE rate of USD 14,991 per day during 2006.
- Cash flow from operations of USD 18.9 million for the 7 months ended December 31, 2007 (unaudited 7 months ended December 31, 2006: USD 6.9 million), a 174% increase from last year.
- Investment of USD 76 million for the acquisition of two handymax vessels.
- Time charter forward coverage at 83.5% of our fleet operating days for 2008 and 48% for 2009.
Management Commentary
Commenting on the interim results, Michael Tartsinis, Chief Executive Officer of Global Oceanic Carriers Limited, said: “We are pleased to report strong financial and operational results for the seven months ended December 31, 2007. Since current management took over in June 2006, our strategy has been to create a solid foundation which will enable the company to continue growing prudently. In this context, our fleet expansion strategy combined with the strength in the dry bulk markets has resulted in increased revenues and profits. Our revenues for the seven months ended December 31, 2007 increased by approximately 128% over those in the relevant period of 2006, while EBITDA increased by 186%.
As we enter 2008, we believe that our company is strategically positioned to benefit from the solid fundamentals of dry bulk shipping. In particular our time charter forward coverage provides us with cash flow stability and upside potential. We employ our vessels under medium-to-long term charters with reputable charterers and have fixed 83.5% of our available days in 2008 and 48% for 2009.
Focusing on long term share holder value, we are pleased to announce the initiation of an attractive and sustainable dividend. This is a significant milestone for our company as we continue to seek new ways for rewarding our shareholders.
I want to conclude by stating that we are committed to efforts for expanding our business and shareholders’ value and we look forward to new opportunities underlined by the sector’s strong fundamentals and our Company’s strategic positioning in it.”
Christina Anagnostara, Chief Financial Officer of Global Oceanic Carriers Limited, added: “As of December 31, 2007, we had a net debt to book capitalization of 55%, which includes the bank financing for the vessel acquisitions we announced in June and July 2007. Our moderate leverage, strong cash flow generation from operational activities as well as sufficient access to bank financing, provides us with the flexibility to continue our fleet expansion program and support our dividend payments. Subject to shareholders’ approval, the Board of Directors is recommending a final dividend of 50% of our net income in respect of the period from June 1, 2007 to December 31, 2007.
“We also believe that the change of our fiscal year end from May 31 to December 31 aligns our Company with the majority of other publicly listed shipping companies and makes it easier for the investment community to follow GOC’s development and progress.”
Dividend
In line with our commitment to our dividend policy, the Board of Directors is recommending a final dividend of GBP 4.33 pence per share or a final payout of GBP 1.7 million in respect of the period from June 1, 2007 to December 31, 2007. The final dividend, pending approval by the Company’s shareholders at the Annual General Meeting, will be paid on May 28, 2008 to shareholders on record as of April 11, 2008. The ex-dividend date is April 9, 2008. This is the first dividend proposed by the Company.
Review of Financial and Operational Results for the Seven Months Ended December 31, 2007
During the seven months ended December 2007 total revenues were USD 26.3 million compared to USD 11.5 million in the relevant period in 2006, due to the increase in prevailing time charter rates and fleet expansion.
The company had a total of 1,182 ownership days during the period ended December 31, 2007 and available days were 1,146 days. The 36 scheduled dry docking days relate to the dry docking of M/V “GO Faith” which commenced late November and was completed by the first days of January 2008.
The vessels were employed at an average rate of USD 21,536 per day, as compared to the average rate of USD 14,991 in 2006.
Average vessel operating expenses increased by 9% or USD 496 per day per vessel for the seven months ended December 2007 (from USD 5,344 per day to USD 5,840). This is mainly attributable to the increased fleet and costs typically associated with the delivery of new vessels, higher crew and lubricant costs, repair and maintenance costs, appreciation of foreign currencies (such as the Euro) versus the US Dollar as well as to the fact that the Company operates a diversified fleet in terms of type and age. The Company’s operating expenses mix is: crew costs 41%, stores and spares 19%, lubricants 9%, repairs and maintenance 14%, insurances 11% and sundry expenses 6%.
Management fees decreased by 33% or USD 281 per day per vessel for the period to December 31, 2007 as compared to 2006 (from USD 860 per day to USD 579 per day) reflecting the change of the previous ship management agreements. As of September 2006, the Company receives technical and operational management services and administrative support from Antares Ship Management SA, a related party. The amount paid to Antares Ship Management SA for the seven months ended December 2007 was USD 685,000 for management fees and USD 126,700 for administrative fees.
General and Administrative expenses remained almost in line with the relevant period in 2006 (2007: USD 1,237 per day 2006: USD 1,205 per day) due to additional expenses incurred in the period relating to the change of the fiscal year.
Vessels’ depreciation charged increased for the seven months ended December 31, 2007 by USD 2.1 million to USD 5 million (unaudited 7 months ended December 31, 2006: USD 2.9 million) due to the new vessels’ additional charges.
Dry dock amortization amounted to USD 587,855 for the seven months to December 31, 2007 (unaudited 7 months ended December 31, 2006: USD 366,000). The M/V “GO Faith” undertook its scheduled dry docking in December 2007 while the M/V “GO Public” and M/V “GO Pride” are scheduled for dry docking in the first and second half of 2008 respectively.
Finance cost for the seven months period ended December 31, 2007 is USD 3.8 million, due to the finance of the increased fleet, amortization of deferred loan charges and the write off of previous loan arrangement and legal fees.
Change in Shareholder Structure
Global Oceanic carriers was informed on Monday, November 19, 2007, that Solstice International Investments Inc. and Tildough Holding Inc. sold their entire portfolio, of 26,020,815 and 5,737,477 ordinary shares in GOC respectively, at £1.65 per share to Kaylee Maritime Limited. Both Solstice International Investments Inc. and Tildough Holding Inc. were associated with Mr. Michael Tartsinis, the Company's Chief Executive Officer and Mr. Antonis Nikolaou, an Executive Director of the Company.
Mr. Michael Tartsinis and Mr. Antonis Nikolaou are both directors of Kaylee Maritime Limited. Furthermore, both Mr. Tartsinis and Mr. Nikolaou along with Mr. Kriton Lentoudis, are shareholders of Kaylee Maritime Limited.
Mr. Kriton Lentoudis is a well established Greek ship owner. He has been involved with shipping for more than 25 years and is associated with Evalend Shipping, a private company based in Greece.
As a result of these transactions Kaylee Maritime Limited holds 31,758,292 ordinary shares in GOC representing 79.3% of the issued share capital of the Company. Out of this holding 40% is owned by Mr. Michael Tartsinis and Mr. Antonis Nikolaou. Both executives along with Mr.Lentoudis represent a controlling interest in Kaylee Maritime Limited.
Fleet Development
Fleet expansion and renewal program. Since October 2006 the company has acquired four dry bulk carriers expanding the fleet to seven vessels with a total carrying capacity of 456,273 dwt. As of the date of this release the average age of the fleet is 17 years.
In September 2007, the Company took delivery of its sixth dry bulk vessel the M/V “GO Friendship”, a Handymax bulk carrier, which the company had previously agreed to acquire for USD 37 million. The M/V “GO Friendship” was built in Korea in 1994 and has a carrying capacity of 44,875 dwt. As announced on July 10, 2007, the vessel has been secured under a fixed-rate period time charter for 3 years with Samsun Corporation at the gross rate of USD 26,850 per day.
In December 2007, the Company took delivery of its seventh dry bulk vessel the M/V “GO Star”, a Handymax bulk carrier, which the Company had previously agreed to acquire for USD 38.3 million. The M/V “GO Star” was built in Japan in 1994 and has a carrying capacity of 43,656 dwt. As announced on June 22, 2007, the vessel has been secured under a fixed-rate period time charter for 3 years with Breakbulk Marine Services, an established Belgian operator, at the gross rate of USD 27,000 per day.
The company’s current fleet comprises of seven dry bulk carriers, including one Capesize, two Panamax, three Handymax and one Handysize vessel, with an aggregate carrying capacity of 456,273 dwt.
Fleet profile
As of today, the composition and employment of our fleet is as follows:
| Vessel Name | Type | DWT | Year Built | Charter Commencement | Charter Period | Expected Redelivery (Minimum Period) | Daily Charter Hire (US$) |
| GO Patoro | Capesize | 150,108 | 1991 | Jun-07 | 36 months | Jun-10 | 32,000 (1) |
| GO Public | Panamax | 71,761 | 1993 | Dec-06 | 23-25 months | Nov-08 | 21,000 |
| GO Faith | Panamax | 65,125 | 1984 | May-07 | 12-14 months | May-08 | 28,000 |
| GO Trader | Handymax | 45,693 | 1996 | Jan-07 | 26-29 months | Mar-09 | 19,250 |
| GO Pride | Handysize | 35,055 | 1982 | Jun-07 | 12 months | Jun-08 | 18,500 |
| GO Friendship | Handymax | 44,875 | 1994 | Sept-07 | 36 months | Sept-10 | 26,850 |
| Go Star | Handymax | 43,656 | 1994 | Dec-07 | 36 months | Dec-10 | 27,000 |
| Grand Total: 7 Vessels |
456,273 |
- The M/V "GO Patoro" is currently employed under a Time Charter until June 2010. For the first year of the time charter ending June 2008, the daily charter rate is $32,000. The rate for the second and third years ending June 2009 and 2010 will be $27,000 and $22,000 respectively. For purposes of revenue recognition, the daily charter hire included in our consolidated financial information is based on the average amount payable over the charter term.
Forward Charter Coverage
As of today, the percentage of available calendar days of the fleet already fixed under contracts (assuming latest charter expiration and exercise of all additional hire periods under charter) is as follows:
| Total Fleet | 2008 | 2009 | 2010 |
| Charter Coverage | 83.5% | 48% | 33% |
Fleet Operating Data
| Operating Data | 7 Months Ended December 31, 2007 | 7 Months Ended December 31, 2006(unaudited) |
| Fleet data: | ||
| Average number of vessels (1) | 5.5 | 3.4 |
| Number of vessels at end of period | 7 | 5 |
| Number of vessels in operation at end of period | 6 | 5 |
| Ownership days (2) | 1,182 | 719 |
| Available days (3) | 1,146 | 719 |
| Operating days (4) | 1,140 | 712 |
| Fleet utilisation (5) | 99.5% | 99% |
| Average daily results (in US$): | ||
| Time Charter Equivalent (TCE) rate (6) | 21,536 | 14,991 |
| Average daily vessel operating expenses (7) | 5,840 | 5,344 |
| Average daily general and administrative expenses (8) | 1,237 | 1,205 |
| Average daily management fees (9) | 579 | 860 |
| Total Vessel Operating expenses (TVOE) (10) | 7,656 | 7,409 |
Explanatory Notes
(1) Average number of vessels is the number of vessels that comprised our fleet for the relevant period, measured by the sum of the number of days each vessel was a part of our fleet during the period divided by the number of period calendar days.
(2) Ownership days are the cumulative number of days in a period during which each vessel in our fleet has been owned by us. Ownership days are an indicator of the size of our fleet over a period and affect both the amount of revenues and the amount of expenses that we record during a period.
(3) Available days are the number of our ownership days less the cumulative number of days that our vessels are off-hire due to scheduled repairs or repairs under guarantee, vessel upgrades or special surveys and the cumulative amount of time that we spend positioning our vessels. Available days are used to measure the number of days in a period during which vessels should be capable of generating revenues.
(4) Operating days are the number of available days in a period less the cumulative number of days that our vessels are off-hire due to any reason, including unforeseen circumstances. Operating days are used to measure the cumulative number of days in a period during which vessels actually generate revenues.
(5) Fleet utilization is measured by dividing the number of our operating days during a period by the number of our available days during the period. The shipping industry uses fleet utilization to measure a company's efficiency in obtaining suitable employment for its vessels and minimizing the amount of days that its vessels are off-hire for reasons other than scheduled repairs or repairs under guarantee, vessel upgrades, special surveys or vessel positioning.
(6) TCE rates are defined as our time charter revenues less voyage expenses during a period divided by the number of our available days during the period, which is consistent with industry standards. Voyage expenses include port charges, bunker (fuel oil and diesel oil) expenses, canal charges and commissions.
(7) Daily vessel operating expenses are calculated by dividing vessel operating expenses by fleet ownership days for the relevant period (Operating expenses include crew wages and related costs, the cost of insurance, expenses relating to repairs and maintenance, the costs of spares and consumable stores, tonnage taxes and other expenses).
(8) Daily general and administrative expenses are calculated by dividing general and administrative expenses by fleet ownership days for the relevant time period. General and administrative expenses include administrative fees paid to Antares Shipmanagement.
(9) Daily management fees are calculated by dividing actual management fees by fleet ownership days.
(10) Total vessel operating expenses or TVOE is a measurement of total expenses associated with fleet operation. TVOE is the sum of vessel operating expenses, management fees and general & administrative expenses. Daily TVOE is calculated by dividing TVOE by fleet ownership days for the relevant time period.
(11) Net debt to book capitalization is a measurement of total net debt divided by net debt plus total equity. As total net debt we consider total borrowings (short & long term portion) less cash and cash equivalents and restricted cash.
Consolidated Balance Sheet
as at December 31, 2007 and May 31, 2007
(Expressed in US Dollars)
| December 31, 2007 | May 31, 2007 | ||
| Assets | |||
| Non current assets | |||
| Vessels | 190,676,491 | 118,531,575 | |
| Other property, plant and equipment | 146,039 | 34,069 | |
| Total non-current assets | 190,822,530 | 118,565,644 | |
| Current assets | |||
| Inventories | 585,798 | 413,270 | |
| Trade receivable | 261,816 | 301,992 | |
| Prepaid expenses and other receivable | 743,200 | 669,209 | |
| Due from related parties | - | 11,553 | |
| Restricted cash | 11,945 | 1,927,961 | |
| Cash and cash equivalents | 14,828,063 | 11,949,002 | |
| Total current assets | 16,430,822 | 15,272,987 | |
| Total assets | 207,253,352 | 133,838,631 | |
| Equity and liabilities | |||
| Capital and Reserves attributable to the equity holders of the Company | |||
| Issued share capital | 224 | 224 | |
| Share premium | 69,357,161 | 69,357,161 | |
| Retained earnings | 14,579,816 | 7,772,865 | |
| Total shareholders’ equity | 83,937,201 | 77,130,250 | |
| Minority Interest | 63,639 | (16,095) | |
| Total equity | 84,000,840 | 77,114,155 | |
| Non current liabilities | |||
| Long term borrowings net of current portion | 94,283,062 | 38,670,225 | |
| Finance lease obligations net of current portion | 88,998 | - | |
| Deferred revenue | 944,138 | - | |
| Retirement benefit obligations | 4,270 | - | |
| Total non current liabilities | 95,320,468 | 38,670,225 | |
| Current liabilities | |||
| Trade payables | 1,978,633 | 979,412 | |
| Due to related parties | 176,681 | 58,273 | |
| Accrued liabilities and other payables | 1,379,731 | 911,975 | |
| Current portion of long term borrowings | 23,145,237 | 15,327,123 | |
| Current portion of finance lease obligations | 17,609 | - | |
| Deferred revenue | 1,234,153 | 777,467 | |
| Total current liabilities | 27,932,044 | 18,054,251 | |
| Total liabilities | 123,252,512 | 56,724,476 | |
| Total equity and liabilities | 207,253,352 | 133,838,631 |
Consolidated Income Statement
for the Seven Months Ended December 31, 2007 and For The Twelve Months Ended May 31, 2007
(expressed in US Dollars except share and per share)
| 7 months ended December 31, 2007 | 12 months ended May 31, 2007 | |
| Revenue | 26,270,446 | 27,098,059 |
| Operating Expenses and Other Income | ||
| Voyage Expenses | (1,201,917) | (1,670,100) |
| Vessels’ Operating Expenses | (6,903,032) | (7,583,895) |
| Management fees | (685,000) | (1,034,137) |
| Administrative fees | (126,700) | (100,200) |
| Depreciation and amortisation | (5,686,924) | (6,674,004) |
| General and Administration expenses | (1,336,092) | (1,614,243) |
| Go Chartering brokers’ fee on 3rd party comm. | (196,447) | - |
| Operating profit | 10,134,334 | 8,421,480 |
| Finance Income and Expenses: | ||
| Finance costs | (3,758,268) | (3,423,600) |
| Finance income | 510,619 | 513,728 |
| Profit for the period / year | 6,886,685 | 5,511,608 |
| Attributable to: | ||
| Equity holders of the parent company | 6,806,951 | 5,527,703 |
| Minority Interest | 79,734 | (16,095) |
| 6,886,685 | 5,511,608 | |
| Earnings per share (US$): | 0.1720 | 0.1739 |
| Weighted average number of ordinary shares outstanding | 40,032,792 | 31,692,627 |
Consolidated Statement of Changes in Equity
for the Seven Months Ended December 31, 2007 and the Twelve Months Ended May 31, 2007
(expressed in US Dollars)
| Issued | |||||||
| share | Share | Retained | Minority | ||||
| capital | premium | earnings | Total | Iinterest | Total | ||
| US$ | US$ | US$ | US$ | US$ | US$ | ||
| As of 1 June 2006 | 106 | 44,832,697 | 2,245,162 | 47,077,965 | - | 47,077,965 | |
| Profit for the year | - | - | 5,527,703 | 5,527,703 | (16,095) | 5,511,608 | |
| Proceeds from rights offer net | 118 | 24,524,464 | - | 24,524,582 | - | 24,524,582 | |
| As of 31 May 2007 | 224 | 69,357,161 | 7,772,865 | 77,130,250 | (16,095) | 77,114,155 | |
| Profit for the period | - | - | 6,806,951 | 6,806,951 | 79,734 | 6,886,685 | |
| As of 31 December 2007 | 224 | 69,357,161 | 14,579,816 | 83,937,201 | 63,639 | 84,000,840 |
Consolidated Cash Flow Statement
for the Seven Months Ended December 31, 2007 and For
The Twelve Months Ended May 31, 2007
(Expressed in US Dollars)
| 7 months ended December 31, 2007 | 12 months ended May 31, 2007 | ||
| Operating Activities | |||
| Profit for the period / year | 6,886,685 | 5,511,608 | |
| Adjustments to reconcile profit to net cash flows: | |||
| Depreciation | 5,686,924 | 6,674,004 | |
| Amortization of backlog asset | - | (1,173,383) | |
| Amortization of deferred loan charges | 136,997 | 138,495 | |
| Interest expense | 2,971,991 | 2,799,675 | |
| Interest income | (510,619) | (513,728) | |
| Unrealized Exchange differences from lease obligation | 8,533 | - | |
| Write off previous years deferred loan charges | 498,713 | 418,921 | |
| Unrealized foreign currency losses | 37,632 | 48,642 | |
| Operating profit before working capital changes | 15,716,856 | 13,904,324 | |
| Movement in working capital balances | |||
| Increase in Inventories | (172,528) | (230,436) | |
| (Increase)/Decrease in Trade receivables, pre-paid expenses & other assets |
(33,815) | (921,157) | |
| Increase in Trade payables, accrued liabilities & other payables | 1,930,912 | 169,220 | |
| Retirement benefit obligations | 4,270 | ||
| Deferred Revenue | 1,400,824 | 616,104 | |
| Due from related parties | 129,962 | 1,152,917 | |
| Foreign currency gain/(losses) from operating activities | (36,114) | (53,826) | |
| Net cash flows generated from operating activities | 18,940,367 | 14,637,056 | |
| Investing activities | |||
| Acquisition of vessels and vessel improvements | (75,932,823) | (62,973,738) | |
| Payments for dry docking and special survey | (1,875,261) | (810,000) | |
| Acquisition of other non-current assets | (2,170) | (37,172) | |
| Interest received | 510,619 | 513,728 | |
| Net cash flows used in investing activities | (77,299,635) | (63,307,182) | |
| Financing activities | |||
| Proceeds from issue of long term debt | 125,000,000 | 61,500,000 | |
| Repayment of long term debt | (60,800,000) | (25,375,000) | |
| Repayment of finance lease instalments | (35,482) | - | |
| Share Capital increase and Proceeds from rights offering | - | 24,524,582 | |
| Loan issuance costs | (1,404,759) | (691,147) | |
| Restricted cash (deposits)/withdrawals | 1,916,016 | (1,298,441) | |
| Interest lease expense paid | (7,863) | - | |
| Interest paid | (3,428,065) | (2,435,542) | |
| Net cash flows generated from financing activities | 61,239,847 | 56,224,452 | |
| Net increase in cash and cash equivalents | 2,880,579 | 7,554,326 | |
| Exchange gains/(losses) on cash and cash equivalents | (1,518) | 5,185 | |
| Cash and cash equivalents at 1st June | 11,949,002 | 4,389,491 | |
| Cash and cash equivalents at 31st December/ 31st May | 14,828,063 | 11,949,002 |
Notes
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