I.M. Skaugen ASA (IMS) reported a net result of MUSD 0.7 in 2Q 00 and MUSD 1.1 accumulated 1H00 (MUSD 0.5 in 1Q00 and a loss of MUSD 2.8 in 1H99). The Group reported an EBITDA result of MUSD 5.9 for 2Q00 and MUSD 11.3 accumulated in 1H 00 (MUSD 5.4 in 1Q00 and MUSD 7 in 1H 99).The improved overall market conditions for NGC continue; and combined with its lower cost of operations gives better margins. The SPT result is weaker due to the increased cost of spot and short term tonnage to cover its marginal needs to serve its customers. The China activities are contributing positively in the efforts to reduce the NGC cost of operations while the other areas in this business unit are basically unchanged.
Highlights 1H00
NGC: Earnings are stable with t/c rates at USD 302,000 per month/vessel vrs USD 298,000 per month in 1Q00 and USD 228,000 per month in all 1999.
NGC: EBIT B/E cost progress according to our plan of USD 236’ per vessel per month for the full year 2000 vrs USD 250’ in 1999.
NGC: Norgas Discoverer hit by the suezmax oil tanker “Greek Fighter” in late June. The vessel will need extensive repairs, and loss of revenue for 3Q00 is estimated at USD 600,000. All estimated expenses charged to 2Q00 results.
SPT: A surge in the aframax tanker market still creates much higher cost of charter for our marginal tonnage needs on a spot basis.
IMS: Preliminary contract signed for four new 8,400 cbm ethylene carriers for delivery 2002 with an option for six more vessels. The contract will enable us to renew the NGC fleet and strengthen our position as the second largest ethylene transporter.
IMS share price up 29.6% since 1 January 00, but still considered fundamentally undervalued compared to its peers and also due to the improvements in the IMS EBITDA earnings. EBITDA multiple of 7 less net debt gives a value of the shares at NOK 135.
IMS - 620,561 shares or 9.36% written down on June 28th as per the annual general meeting on March 7th. New number of shares in IMS is 6,009,944. Current portfolio of own shares is 97,647 or 1.6%. IMS will continue within its guidelines and limits to buy own shares at prices deemed favourable.