For the year, I.M. Skaugen Group (IMS) reported a net result of US$28.4 million in 2005 (US$5 million in 2004) (pre-tax and before variances on derivative of convertible bonds - ref page 10 *). The result on an EBITDA basis is US$47 million in 2005 (US$25 million in 2004).
In 2005 IMS enjoyed good trading conditions for our main business; Norgas the gas carrier activity. This was tempered by the challenges we faced in other parts of our operations. SPT's lightering business saw marked fluctuations in demand across the year - due to poor weather and due to markedly variable time charter costs. We do however consider the SPT results acceptable under the difficult trading conditions experienced.
With IMS into its second decade of operation in China - and the country continuing its robust economic performance - the company is beginning to reap significant benefits from its activities. In addition to improved turnover, the company is seeing other benefits from its presence in China. IMS placed significant orders in China during the year for a number of new gas carrier vessels and it will be working very closely with the yard to ensure these builds are completed on schedule, to its exact requirements and at the favorable quoted prices for the ships.
The newbuilding order book for the IMS Group, if all materialise, now stands at 21 ships with a gross value of about USD 570 mill. (on a 100% basis). All 21 ships (15 gas carriers and 6 aframax sized tankers for SPT) are, however, made at price levels that we consider very attractive compared to prevailing markets and thus fits our 'lowest cost provider' strategy.
The IMS share price rose by a substantial 52 per cent during 2005, closing at the end of the year at 235. The yield over the year was 64 per cent including a dividend of NOK 7.5 per share paid in March 2005 and NOK 10 per share paid in December 2005. The dividend paid in December is for all of 2005 and paid out in December 2005 and not March 2006 due to Norwegian tax regulations.
Overall market conditions appear encouraging for IMS' operations and with a focus on retaining a tight hold on costs across the company, the next 12 months should see a continuation of its 2005 performance.
The Norgas Carriers have been in a close cooperation with AP Moller - Maersk since October 2003 in an alliance named "MNGC". AP Moller - Maersk has controlled a number of ethylene capable gas carriers of similar configuration to Norgas' vessels, but will after December 2006 no longer exercise control of most of these gas carriers. The present cooperation will thus coming to an end in 2006 and we will aim to restructure this cooperation, which will make us capable of serving our clients in the same efficient way as MNGC.