Rickmers Maritime 2Q profit drops by 43 percent to $5.33 million
Rickmers Maritime Trust, the Singapore-based containership owner and charterer, said its profit for the second quarter ended June 30 dropped 43 percent to $5.33 million from $9.2 million in the same quarter last year, as the company took a precautionary impairment charge against the possible early redelivery of one of its charter vessels.
The company, which is minority-owned by Rickmers-Linie of Germany, had second-quarter charter revenue of $37.55 million, up 59 percent from $23.68 in the prior-year quarter.
Rickmers Maritime’s CEO, Thomas Preben Hansen, said that although the global economic downturn has not yet affected the company’s revenue, its immediate priority is to take delivery of its outstanding ship orders and finalize agreements with the lending banks on the waiver of the VTL covenants as well as the refinancing of its $130 million Top-Up loan facility.
The trust said its independent auditor, PricewaterhouseCoopers, had pointed out that the group’s “ability to continue as a going concern” is dependent on the successful outcome of the refinancing of the Trust’s $130 million Top-Up facility which falls due on April 30, 2010; and on the Group’s compliance with all loan covenants to date.
The trust said it has appointed a financial advisor and investment bankers to advise it on negotiations with lending banks.
The trust said the continuing economic downturn has resulted in a perceived drop in the value of container vessels, which “may cause the Group to breach minimum asset value to loan covenants”.
The company said all of its 16 container vessels currently in operation are chartered out for periods of between seven and 10 years without any early termination option, except for the Maersk Djibouti, which could potentially be redelivered as early as February 2010. None of its other vessels is scheduled for redelivery until the end of 2013.
While the charterer of Maersk Djibouti, A.P. Møller-Mærsk, has not given any notice of its intentions with regard to this vessel, Rickmers Maritime said it recognized the prevailing poor sentiment in the container shipping market by making further provision of $7.5 million in the second quarter for the impairment of Maersk Djibouti.
The impairment takes into consideration the potential early redelivery of the vessel and the likelihood of a reduced charter rate from this vessel in 2010. Together with the $3.5 million impairment charge taken in the fourth quarter of 2008, it made a total of $11 million in provisions for Maersk Djibouti.
“While our net profit has been impacted by impairment charges, our business model is premised on cash flow generation and not accounting profits,” said Quah Ban Huat, Rickmers Maritime’s CFO.
The company, which is minority-owned by Rickmers-Linie of Germany, had second-quarter charter revenue of $37.55 million, up 59 percent from $23.68 in the prior-year quarter.
Rickmers Maritime’s CEO, Thomas Preben Hansen, said that although the global economic downturn has not yet affected the company’s revenue, its immediate priority is to take delivery of its outstanding ship orders and finalize agreements with the lending banks on the waiver of the VTL covenants as well as the refinancing of its $130 million Top-Up loan facility.
The trust said its independent auditor, PricewaterhouseCoopers, had pointed out that the group’s “ability to continue as a going concern” is dependent on the successful outcome of the refinancing of the Trust’s $130 million Top-Up facility which falls due on April 30, 2010; and on the Group’s compliance with all loan covenants to date.
The trust said it has appointed a financial advisor and investment bankers to advise it on negotiations with lending banks.
The trust said the continuing economic downturn has resulted in a perceived drop in the value of container vessels, which “may cause the Group to breach minimum asset value to loan covenants”.
The company said all of its 16 container vessels currently in operation are chartered out for periods of between seven and 10 years without any early termination option, except for the Maersk Djibouti, which could potentially be redelivered as early as February 2010. None of its other vessels is scheduled for redelivery until the end of 2013.
While the charterer of Maersk Djibouti, A.P. Møller-Mærsk, has not given any notice of its intentions with regard to this vessel, Rickmers Maritime said it recognized the prevailing poor sentiment in the container shipping market by making further provision of $7.5 million in the second quarter for the impairment of Maersk Djibouti.
The impairment takes into consideration the potential early redelivery of the vessel and the likelihood of a reduced charter rate from this vessel in 2010. Together with the $3.5 million impairment charge taken in the fourth quarter of 2008, it made a total of $11 million in provisions for Maersk Djibouti.
“While our net profit has been impacted by impairment charges, our business model is premised on cash flow generation and not accounting profits,” said Quah Ban Huat, Rickmers Maritime’s CFO.
