Annual Report
News
Interim Results for the Six Months Ended November 30, 2007 and Initiates Dividend
21 February 2008
ATHENS, GREECE - February 21, 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 six months ended November 30, 2007.
The Company’s management has scheduled a conference call today, February 21, 2008, at 4:00 P.M. GMT, 11:00 A.M. EST, 6:00 P.M. Athens time to discuss the results. Details of the conference call are available further in this release.
Interim November 2007 Highlights
- EBITDA of USD 14.2 million in 2007 (2006: USD 3.9 million).
- Net profit of USD 6.9 million in 2007 on revenue from operations of USD 22.5 million compared to 2006 net profit of USD 160,355 on revenue from operations of USD 8.9 million.
- Earnings per share (EPS) of USD 0.17 calculated on 40,032,792 shares outstanding for the period versus USD 0.0069 per share calculated on 23,352,462 shares outstanding for the relevant period last year.
- Strong cash position with USD 18.8 million cash in bank* as of November 30, 2007.
- An average of 5.3 vessels were operated during 2007 earning an average time charter equivalent (TCE) rate of USD 21,750 per day compared to an average of 3.2 vessels earning an average TCE rate of USD 14,373 per day during 2006.
- Cash flow from operations of USD 15.9 million compared to USD 5 million in 2006, a 218% increase from last year.
- Time charter forward coverage at 83.5% of our fleet operating days for 2008 and 48% for 2009.
- Change of fiscal year end. In December 2007, the Company announced that it has changed its fiscal year end from May 31 to December 31. The Company will publish audited results for the seven month period ended December 31, 2007 in March 2008.
(*) Includes restricted cash
Management Commentary
Commenting on the interim results, Michael Tartsinis, Chief Executive Officer of Global Oceanic Carriers Limited, said: “Our Company reported strong results for the six months ended November 2007. We have made significant progress on all fronts. We expanded our fleet to seven vessels with the acquisition of two dry bulk carriers, increased our revenues and profits and decreased our operating expenses. In addition, our time charter forward coverage is very strong providing us with cash flow stability with upside potential. We will continue expanding our business and we look forward to exploiting new opportunities underlined by the sector’s strong fundamentals and our company’s strategic positioning in it.
Our revenues for the six months period to November 2007 increased by approximately 152 % over those of 2006, while EBITDA increased by 262%.
Daily total vessel operating expenses have been reduced by 6%, daily fleet management fees by 38% and daily general and administrative expenses by 22%.
Our subsidiary, Global Oceanic Chartering Limited (which commenced operations in March 2007) is indicative of our ongoing focus on pursuing new business opportunities. This new subsidiary has streamlined our chartering operations, lowered the chartering commission charges on our fleet and created a new profit center for chartering activities.
Our fleet deployment strategy has been in line with the Board’s expectations. GOC employs its vessels under long term period charters with reputable charterers and has fixed 83.5% of its available days in 2008 and 48% for 2009. We continue to benefit from the stability of our cash flows due to our medium-to-long term charter agreements and our fixed rate management agreement with our related technical management affiliate, while at the same time we are also able to take advantage of the market’s upside through the rechartering of the vessels which are expected to be redelivered back to us within 2008.
I am also pleased that we initiate on schedule our stated dividend policy.
We believe that our company is strategically positioned to benefit from the solid fundamentals of dry bulk shipping and take advantage of market opportunities as they arise.”
Christina Anagnostara, Chief Financial Officer of Global Oceanic Carriers Limited, added: “On November 30, 2007, our net debt to book capitalization was 45%, a moderate level for industry standards. Our moderate leverage, coupled with sufficient access to bank financing, enabled us to finance the two vessel acquisitions we announced in June/July 2007 entirely with bank financing.
The high charter coverage of our fleet enables us to reward our shareholders with the initiation of an attractive and sustainable dividend.
Furthermore, the Company has changed its accounting year end to December in order to align with the majority of other publicly listed shipping companies therefore making it easier for the investment community to follow GOC’s development and progress.
Dividend
In line with our commitment to our dividend policy and given the recent change of our fiscal year end, the Board of Directors will recommend a final dividend of 50% of our net income in respect of the period from June 1, 2007 to December 31, 2007. This final dividend, will be proposed on March 14, 2008 at the release of the “7 months period ending December 2007” results.
Review of Results for Interim Ended November 30, 2007
During the six month period ended November 2007 total revenues were USD 22.5 million compared to USD 8.9 million in the relevant period in 2006.
The vessels were employed at an average rate of USD 21,750 per day, as compared to the average rate of USD 14,373 in 2006.
Average vessel operating expenses increased by 6% or USD 184 per day per vessel for the six months ended November 2007 (from USD 5,437 per day to USD 5,621). This is mainly attributable to the increase in the number of vessels and costs typically associated with the delivery of new vessels, as well as appreciation of foreign currencies (such as the Euro) versus the US Dollar.
Management fees decreased by 38% or USD 359 per day per vessel for the period to November 30, 2007 as compared to 2006 (from USD 934 per day to USD 575 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 six months ended November 2007 was USD 562,600 for management fees and USD 108,600 for administrative fees.
General and administrative expenses (inclusive of administrative fees paid to Antares Ship Management SA) decreased by 22% or USD 316 per day for the period to November 30, 2007 as compared to 2006 (from USD of 1,387 per day to USD 1,071 per day). This decrease in general and administrative expenses reflects the management change, cost control measures and renegotiation of management agreements for the provision of professional, administrative and other services.
Vessels’ depreciation charged increased for the 6 months period ended November 30, 2007 by USD 1.9 million to USD 4.6 million (2006: USD 2.7 million) due to the new vessels additional charges.
Finance cost increased by USD 1.8 million to USD 3 million for the six months ended November 30, 2007 mainly 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, 19 November 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 he 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.
Conference Call details:
Participants should dial into the call 10 minutes prior to the scheduled time using the following numbers: 0800 953 0329 (from the UK), 1 866 819 7111 (from the US), or +44 1452 542 301 (all other callers). Please quote “Global Oceanic Carriers”.
In case of any problem with the above numbers, please dial 0800 694 1503 (from the UK) 1 866 223 0615 (from the US), or +44 1452 586 513 (all other callers). Quote “Global Oceanic Carriers”.
A telephonic replay of the conference call will be available until February 28, 2008 by dialing 0800 953 1533 (from the UK), 1 866 247 4222 (from the US), or +44 1452 550 000 (all other callers). Access Code: 6478074#
Slides and audio webcast:
There will also be a live -and then archived- webcast of the conference call, accessible through the link below. Participants to the live webcast should register on the website approximately 10 minutes prior to the start of the webcast.
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 includes seven dry bulk carriers, comprised of 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 $22,000 respectively.
Forward Charter Coverage
As of today, the percentage of available calendar days of the fleet already fixed under contracts (assuming latest charter expiration and exercise of all additional hire periods under charter) is as follows:
| Total Fleet | 2008 | 2009 | 2010 |
| Charter Coverage | 83.5% | 48% | 33% |
Fleet Operating Data
| Operating Data | 6 Months Ended November 30, 2007 | 6 Months Ended November 30, 2006 |
| Fleet data: | ||
| Average number of vessels (1) | 5.3 | 3.2 |
| Number of vessels at end of period | 6 | 4 |
| Number of vessels in operation at end of period | 6 | 4 |
| Ownership days (2) | 979 | 582 |
| Available days (3) | 975 | 582 |
| Operating days (4) | 970 | 575 |
| Fleet utilisation (5) | 99.5% | 99% |
| Average daily results (in US$): | ||
| Time Charter Equivalent (TCE) rate (6) | 21,750 | 14,373 |
| Average daily vessel operating expenses (7) | 5,621 | 5,437 |
| Average daily general and administrative expenses (8) | 1,071 | 1,387 |
| Average daily management fees (9) | 575 | 934 |
| Total Vessel Operating expenses (TVOE) (10) | 7,267 | 7,758 |
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 and voyage 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 November 30, 2007
(Expressed in US Dollars)
| November 30, 2007 | May 31, 2007 | |
| Assets | ||
| Non current assets | ||
| Vessels | 151,468,059 | 118,531,575 |
| Other non - current assets | 149,647 | 34,069 |
| Total non-current assets | 151,617,706 | 118,565,644 |
| Current assets | ||
| Inventories | 520,942 | 413,270 |
| Trade receivable | 212,142 | 301,992 |
| Prepaid expenses and other receivable | 861,803 | 669,209 |
| Advances for vessels acquisition | 4,020,544 | - |
| Due from related parties | - | 11,553 |
| Restricted cash | 4,120,344 | 1,927,961 |
| Cash and cash equivalents | 14,723,264 | 11,949,002 |
| Total current assets | 24,459,039 | 15,272,987 |
| Total assets | 176,076,745 | 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 | 14,560,813 | 7,772,865 |
| Total shareholders’ equity | 83,918,198 | 77,130,250 |
| Minority Interest | 48,004 | (16,095) |
| Total equity | 83,966,202 | 77,114,155 |
| Non current liabilities | ||
| Long term borrowings net of current portion | 69,214,276 | 38,670,225 |
| Finance lease net of current portion | 91,854 | - |
| Retirement benefit obligations | 3,800 | - |
| Total non current liabilities | 69,309,930 | 38,670,225 |
| Current liabilities | ||
| Trade accounts payable | 1,290,850 | 979,413 |
| Due to related parties | 53,075 | 58,273 |
| Accrued liabilities and other payable | 2,199,234 | 911,975 |
| Current portion of long term borrowings | 17,268,870 | 15,327,123 |
| Current portion of finance lease obligations | 19,160 | - |
| Deferred revenue | 1,969,424 | 777,467 |
| Total current liabilities | 22,800,613 | 18,054,251 |
| Total liabilities | 92,110,543 | 56,724,476 |
| Total equity and liabilities | 176,076,745 | 133,838,631 |
Consolidated Income Statement For The Six Months Ended November 30, 2007
(Expressed in US Dollars)
| 6 months ended November 30, 2007 | 6 months ended November 30, 2006 | |
| Revenue | 22,500,512 | 8,941,851 |
| Operating Expenses and Other Income | ||
| Voyage Expenses | (996,618) | (576,573) |
| Vessels’ Operating Expenses | (5,502,953) | (3,164,390) |
| Management fees | (562,600) | (543,537) |
| Administrative fees | (108,600) | - |
| Depreciation and amortisation | (4,641,785) | (2,657,545) |
| General and Administration expenses | (939,777) | (807,296) |
| Go Chartering brokers’ fee on 3rd party comm. | (158,257) | - |
| Other Income | - | 77,764 |
| Operating profit | 9,589,922 | 1,270,274 |
| Finance Income and Expenses: | ||
| Finance costs | (3,077,579) | (1,194,969) |
| Finance income | 339,704 | 85,050 |
| Profit for the period | 6,852,047 | 160,355 |
| Attributable to: | ||
| Equity holders of the parent company | 6,787,948 | 160,355 |
| Minority Interest | 64,099 | - - |
| 6,852,047 | 160,355 | |
| Earnings per share (US$): | 0.1712 | 0.0069 |
| Weighted average number of ordinary shares outstanding | 40,032,792 | 23,352,462 |
Consolidated Cash Flow Statement For The Six Months Period Ended November 30, 2007
Expressed in US Dollars)
| 6 months ended November 30, 2007 | 6 months ended November 30, 2006 | |
| Operating Activities | ||
| Profit/(loss) for the year | 6,852,047 | 160,355 |
| Adjustments to reconcile profit to net cash flows: | ||
| Depreciation | 4,641,785 | 2,657,545 |
| Amortization of deferred loan charges | 109,010 | - |
| Interest expense | 2,322,509 | 884,641 |
| Interest income | (339,704) | (85,050) |
| Unrealized Exchange differences from lease obligation | 9,958 | - |
| Write off deferred loan charges | 498,713 | - |
| Foreign currency | 30,538 | 4,661 |
| Operating profit before working capital changes | 14,124,856 | 3,622,152 |
| Movement in working capital balances | ||
| Increase in Inventories | (107,672) | (129,057) |
| (Increase)/Decrease in Trade receivables, pre-paid expenses & other assets |
(102,744) | 773,854 |
| Increase in Trade payables, accrued liabilities & other payables | 809,147 | 345,521 |
| Retirement benefit obligations | 3,800 | |
| Deferred Revenue | 1,191,957 | 415,301 |
| Due from related parties | 6,355 | 27,317 |
| Foreign currency gain/(losses) from operating activities | (32,538) | (5,109) |
| Net cash flows generated from operating activities | 15,893,161 | 5,049,979 |
| Investing activities | ||
| Acquisition of vessels and vessel improvements | (37,401,906) | (34,707,019) |
| Payments for dry docking and special survey | (156,215) | (1,557,501) |
| Prepayments for vessel acquisition | (4,020,544) | (2,750,000) |
| Acquisition of other non-current assets | (2,170) | - |
| Interest received | 339,704 | 85,050 |
| Net cash flows used in investing activities | (41,241,131) | (38,929,470) |
| Financing activities | ||
| Proceeds from issue of long term debt | 87,832,834 | 45,000,000 |
| Repayment of long term debt | (54,550,000) | (18,425,000) |
| Repayment of finance lease instalments | (32,500) | - |
| Proceeds from rights offering | - | 24,602,521 |
| Loan issuance costs | (1,404,759) | (194,026) |
| Restricted cash (deposits)/withdrawals | (2,192,383) | (1,291,093) |
| Interest lease expense paid | (6,568) | - |
| Interest paid | (1,526,392) | (690,262) |
| Net cash flows generated from financing activities | 28,120,232 | 49,002,140 |
| Net increase in cash and cash equivalents | 2,772,262 | 15,122,649 |
| Cash and cash equivalents at 1st June | 11,949,002 | 5,019,009 |
| Exchange gains/(losses) on cash and cash equivalents | 2,000 | 448 |
| Cash and cash equivalents at 30 November | 14,723,264 | 20,142,106 |
Financial Statements and notes to the accounts will be available on the Company’s website under Investor Relations Section – Latest Results
For further information please contact:
Global Oceanic Carriers Limited
Michael Tartsinis, Chief Executive Officer
Christina Anagnostara, Chief Financial Officer
Tel: + 30 210 898 636
www.gocarriers.com
Jefferies International Limited
Nick Davies
Schuyler Evans
Tel: +44 (0) 207 029 8000
Investor Relations / Media:
Capital Link (London)
Natassa Markopoulou
Tel. +44 (0) 20 7614 2950
Email: gocarriers@capitallink.com
Capital Link (New York)
Paul Lampoutis
Tel. +1 212 661 7566
E-mail: gocarriersus@capitallink.com
www.capitallink.com
Further Information - Notes to Editors
About the Company
Global Oceanic Carriers Limited is a global provider of marine transportation services for dry bulk cargoes through the ownership, management and chartering of dry bulk carriers. The company is incorporated in Jersey and has its principal executive offices in Athens, Greece.
The company’s current fleet includes seven dry bulk carriers, comprised of one Capesize, two Panamax, three Handymax and one Handysize vessel with an aggregate carrying capacity of 456,273 dwt.
GO Carriers is listed on the AIM market and its stock code is GOC.L
Forward-Looking Statement
Matters discussed in this release may constitute forward-looking statements. Forward-looking statements reflect the current views of Global Oceanic Carriers Limited ("the Company") with respect to future events and financial performance and may include statements concerning plans, objectives, goals, strategies, future events or performance, and underlying assumptions and other statements, which are other than statements of historical facts.
The forward-looking statements in this release are based upon various assumptions, many of which are based, in turn, upon further assumptions, including without limitation, management's examination of historical operating trends, data contained in our records and other data available from third parties. Although the Company believes that these assumptions were reasonable when made, because these assumptions are inherently subject to significant uncertainties and contingencies which are difficult or impossible to predict and are beyond our control, the Company cannot assure you that it will achieve or accomplish these expectations, beliefs or projections.
Important factors that, in our view, could cause actual results to differ materially from those discussed in the forward-looking statements include the strength of world economies and currencies, general market conditions, including changes in charter hire rates and vessel values, changes in demand that may affect attitudes of time charterers to scheduled and unscheduled drydocking, changes in the Company's operating expenses, including bunker prices, dry-docking and insurance costs, or actions taken by regulatory authorities, potential liability from pending or future litigation, domestic and international political conditions, potential disruption of shipping routes due to accidents and political events or acts by terrorists. The Company does not assume, and expressly disclaims, any obligation to update these forward-looking statements.