GC Rieber Shipping posted a record high net profit of NOK 416.1 million in the fourth quarter 2007. The sale of the company's 42.5 % shareholding in Arrow Seismic ASA provided a profit effect of NOK 540 million, while expensing NOK 159.6 million related to the introduction of a new shipping tax regime in Norway pulls in the other direction.
- The sale of our shareholding in Arrow Seismic has provided us with considerable flexibility and financial capacity for expansion within our core areas offshore subsea and offshore services in a harsh environment, says CEO Sven Rong, who are also pleased with the profit from continued operations in the fourth quarter 2007, which more than doubled compared to the corresponding quarter in 2006.
Other highlights in Q4 2007:
- Operating income of NOK 152.4 million (NOK 110.7 million in Q4 06)
- EBITDA from continued operations of NOK 53.9 million (NOK 39.8 million in Q4 06)
- Liquid assets and net cash NOK 1140 million and NOK 702 million respectively
- Contract backlog of NOK 1231 million
In November 2007, the company sold its 42.5% shareholding in Arrow Seismic ASA ("Arrow") to PGS at a price of NOK 958 million, which resulted in an accounting gain in the fourth quarter 2007 of NOK 576 million. Adjusted for elimination of NOK 36 million in the balance sheet related to previously accumulated translation difference on vessels owned by Arrow, the net profit effect in the fourth quarter 2007 is NOK 540 million, while the total equity effect is NOK 576 million. GC Rieber Shipping considered the offer from PGS to reflect both the values created and the expectations for future value creation in Arrow. The sale is also considered structurally beneficial for the company, and provides a substantial financial capacity for increased focus on developing the company's other activities within the oil service market. Both the company's activities within offshore subsea and business opportunities related to extraction of petroleum in the arctic environment are developing strongly, and the sale of the shareholding in Arrow opens for opportunities in these segments or in related activity.
- Our contract situation, solidity and liquidity situation provide the group with considerable flexibility, says CEO Sven Rong, and continues: - The activity in the offshore market in general is strong, with demand for all kinds of tonnage and offshore related services. Our ambition is to expand its presence in the value chain within the oil service sector and there are several attractive opportunities which can bring us closer towards this goal.
In December 2007, the Norwegian Parliament approved the government's proposal for changes in the Norwegian shipping tax regime, which according to the provisions proposed by the Ministry of Finance implies a nominal payable tax for the company's subsidiaries within the shipping tax regime of approximately NOK 236 million.
As a consequence, a net present value of NOK 159.6 million of the nominal payable tax of NOK 236 million have been expensed in the fourth quarter 2007 and included as debt in the balance sheet. Based on third party legal opinions the company considers the transition rules connected to the new shipping tax regime, restating the income for the period 1996-2006 as taxable, to be in conflict with the Norwegian constitution § 97. On this background the company is evaluating to take legal action against the transition rules.
For further information, please contact:
CEO Sven Rong Phone +47 55 60 68 18 /+47 90 55 49 52
CFO Hans Petter Klohs Phone +47 55 60 68 24 /+47 90 75 05 26
About GC Rieber Shipping:
GC Rieber Shipping is an industrial company with business within offshore/shipping, with focus on high quality marine ship management, project development and industrial portfolio management. The company has a unique competence on offshore operations in harsh environments and design, development and maritime operation of seismic vessels. The company has also built substantial competence on subsea operations, both through the 52% stake in the subsea contractor Technocean and through long term cooperation with other key players in the market.
GC Rieber Shipping owns and operates five advanced multifunctional special purpose vessels for defined markets within offshore subsea and ice research and support. The company is also in charge of ship management for 12 seismic vessels owned by PGS, CGGVeritas and Fugro, as well as project management and building supervision for four advanced seismic newbuildings for Arrow Seismic (PGS) and conversion of two 2D/source vessels. The company's headquarters is located in Bergen with ship management offices in Sevenoaks (England) and Yuzhno-Sakhalinsk (Russia). The company is listed on Oslo Børs with ticker RISH. Further information available on the company's website:
www.gcrieber-shipping.no