The I.M. Skaugen Group (IMSK) today reported satisfactory second quarter results
The pre-tax profit was USD1.6 million for the 2Q07 compared to USD0.6 million for the 2Q06. The result of the 2Q07 on an EBITDA basis was USD8.2 million compared to USD5.7 million for the 2Q06. Net profit at the end of 2Q07 is USD8.2 million vrs USD 10.9 million at full year 2006.
I.M. Skaugen (IMS) is engaged in three business units, through Norgas, Skaugen Marine Construction (SMC) and Skaugen PetroTrans (SPT). Norgas comprises the group's gas transportation activities, SMC is responsible for the new building activities in China, comprising now in total 11 new gas carriers. SPT is involved in ship-to-ship transfer of crude oil and LNG.
Norgas had a satisfactory performance for the 2Q07, taking advantage of the continuing momentum of the global markets for petrochemical gasses. The fleet was almost fully employed for the quarter, resulting in acceptable overall earning for the fleet, despite higher operational costs in general increasing our "vessel break-even cost levels".
Skaugen Marine Construction (SMC), IMS's business unit responsible for all aspects of the company's newbuilding programmes. The first vessel completed as part of this programme, the 3,200 CBM LPG carrier "Mei Wen Ti", was delivered on 8th January, 2007. The second 3,200 LPG ship, "Qin Shi Huang", was launched in early June and is expected to be delivered in 3Q07. We expect to experience an increase in the construction costs of the SMC vessels due to a substantial increase of raw materials (basic metal prices) and specially stainless steel prices in addition to higher cost for ship components. Our newbuilding program enable us to renew and expand our fleet, with vessels that will offer special capabilities and added flexibility, at attractive price levels.
I.M. Skaugen ASA received in June all approvals to establish a new trading company, Skaugen (Shanghai) Trading Co., Ltd. This company is one of the first non Chinese trading company approved and will enable us to handle currency and VAT related issues within our SMC business unit.
Skaugen PetroTrans (SPT) continues to suffer from lack of available tankers at affordable rates to meet its long-term lightering obligations to its customers. With the market for Aframaxes still strong, charter hire-in rates to cover demand are at continuous high levels. However, in mid-May and also in late June SPT took delivery of the first two in a series of six new purposed-designed and built Aframax tankers, for its lightering operation, which should help alleviate fleet supply issues as the year progresses. The four further vessels will be delivered over the coming 10 months and nr 3 in mid August.
In June I.M. Skaugen ASA issued a new 5-year bond loan, denominated in NOK, with total borrowing limit of NOK1,000 million, and a minimum subscription of NOK600 million. The bond loan is listed at Oslo Stock Exchange (OSE) (Ticker code: IMSK04). Use of the proceeds is for general purposes, partly refinancing through re-purchasing of current bond program and financing of additional growth within the company.
Board of Directors
If you have any questions, please contact:
Bente Flø, Chief Financial Officer, on telephone +47 23 12 03 30/+47 91 64 56 08 or by e-mail: bente.flo@skaugen.com. This press release is also available on the Internet at our website: http://www.skaugen.com.
Listed on the Oslo Stock Exchange, I.M. Skaugen ASA (IMSK) - www.skaugen.com - is a Marine Transportation Service Company engaged in the hassle free transportation of petrochemical gases and LPG, ship-to-ship transfer of crude oil and LNG, as well as the design and construction of smaller and specialized high quality marine vessels.
IMSK is a fully integrated shipping company that designs, builds, owns, mans and manages our own ships. IMSK customers are major international companies in the oil and petrochemical industry, whom we serve worldwide from our operations in Dubai (UAE), Freeport and Houston (Texas), Oslo (Norway), Singapore Sunderland (UK), Nanjing, Shanghai, Taizhou, Zhangjiagang and Wuhan (China). IMSK operates recruitment and training programmes in St. Petersburg (Russia) and Wuhan (China) for the crewing of vessels.
IMSK employs approx. 1,500 people and currently operates 45 vessels worldwide. The fleet comprises petrochemical gas and LPG carriers, Aframax tankers, vessels and barges for the transportation of gases on the Yangtze River (China) and a small number of workboats for Skaugen PetroTrans (SPT).
IMSK has a comprehensive newbuilding project in China where it has three LPG vessels of 3,200 cbm; three purpose designed combination carriers with LPG/Ethylene/VCM and Organic chemicals carrying capability and up to ten advanced 10,000 cbm LNG/LPG/Ethylene gas carriers are on order for Norgas for delivery from beginning 2007 and onwards. IMSK has invested in infrastructure with both a shipyard and a cargo plant maker in China to ensure innovative and flexible vessels at low cost. Six new, purpose designed and built "Aframax sized tankers", are on order for delivery to SPT on a long term Bareboat charter and for delivery from May 2007 until spring 2008.