I.M. Skaugen ASA (IMS) reported a net result of MUSD 0.5 mill in 1Q00 (minus MUSD 2.3 in 1Q99 and minus MUSD 2.5 in 4Q99). The Group reported an EBITDA result of MUSD 5.4 for the period (MUSD 2.7 in 1Q99 and MUSD 3 in 4Q99).The improved result is positively affected by the increased margins of NGC due to improved overall conditions and lower cost of operations. SPT had a weaker performance this quarter, while the China activities are basically unchanged. The improvement in earnings comes in spite of increased fuel expenses for the group. Other operating expenses are according to plan, except the charter cost for spot tonnage for SPT - which has been abnormally high in this quarter. SPT’s result has also been marked by bad weather conditions which affect scheduling.
1Q00 Highlights
Cyclical improvements in the market for NGC as expected due to economic recovery in Asia and Europe as well as continued economic expansion in USA.
Increased product prices and increased volumes despite of very high oil prices which caused increase in raw materials prices for our customers.
NGC: Clear improvements with t/c rates now at USD 298,000 per month/vessel vrs USD 228,000 per month in 1999.
NGC: EBIT B/E cost according to our plan of USD 236’ per vessel per month for the full year vrs USD 250’ in 1999.
NGC: No new contracts for any new buildings in our segment during this period. Fleet expected to grow about 5.5% in 2000, 4.3% in 2001 vrs 3.3% in 1999.
SPT: A surge in the aframax tanker market has created much higher cost of charter in of tonnage on a spot basis. This has particularly affected the urge for SPT to charter vessels to cover its marginal needs. These needs have also been higher than normal due to bad winter weather affecting the scheduling of our jobs and the need to maintain on time performance.
IMS share price up 11% this quarter, 100% on 12 months basis, but still considered fundamentally undervalued also due to the improvements in IMS EBITDA earnings.
620,561 shares or 9.36% acquired at cost of MUSD 3.6 or NOK 46 per share has been written down as per the annual general meeting on March 7th. This will be effective on 25 June 2000. New number of shares in IMS will be 6,009,944.
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