The I.M. Skaugen Group (IMSK) has announced a pre-tax profit of US$5.8 mill for the 3Q05. This compares to a pre-tax profit of US$1.1 mill for the 3Q04. The result for the 3Q05 on an EBITDA basis is US$ 10.6 mill (US$ 6.8 mill for the 3Q04).
The third quarter of 2005 has seen I.M. Skaugen's transportation sector continue with positive market conditions for gas carriers. Following a slight slowdown in the trading conditions during the 2Q05, there was an improvement in trading conditions through the 3Q05 that should pick up further in the final three months of the year. Despite higher raw material costs from the oil sector, demand has remained strong and the company expects to remain on target to meet its full-year growth and margin targets.
I.M. Skaugen continues to focus its activities on two key business areas. Norgas is the company's gas transportation operation, which also includes the company's business activities in China, while Skaugen PetroTrans (SPT) is its shuttle tanker activities. During a quarter which saw considerable geographic shifts in production levels, Norgas once again showed the benefits of its extensive fleet worldwide fleet, to provide flexible transportation solutions when and where our customers needed capacity. SPT too, showed the importance of its adherence to industry-leading levels of customer service, safety and dependability, as it sought to reduce the impact of several hurricanes and bad weather during the quarter on both its own and its customers' operations.
During the quarter I.M. Skaugen entered into an agreement to build three specialised combination carriers capable of handling both LPG/Ethylene and organic chemicals. It is expected that these vessels - slated for delivery in 2007/8 - will primarily be used to satisfy the demand that the company is seeing for both Chinese domestic and intra-Asian transportation. The company will be working closely with the chosen shipyard throughout the build process in order to develop tailored vessels, which will benefit both I.M. Skaugen and its customers. The total calculated delivered price for the vessels is about USD55 mill, inclusive of all pre-delivery expenses. This represents a highly competitive price when compared against present market rates for new building projects.
There has been a marked increase in the company's share price during the quarter, rising from NOK180 in early July to a close at the end of September of NOK223 - a change of 23 per cent.
The accounts of I.M. Skaugen ASA are, as from 1st January 2005, presented in accordance with International Financial Reporting Standards (IFRS). The changes in accounting standards effects are, among other things, presented in the Transition to International Financial Reporting Standards document. The results for 2004 were prepared in accordance with IFRS, while previous periods presented in the report are in accordance with NGAAP.