Rickmers Maritime (the “Trust”) is a business trust constituted by the Trust Deed entered on 30 March 2007 by Rickmers Trust Management Pte. Ltd. as the trustee-manager of Rickmers Maritime.
Rickmers Maritime was listed on the Singapore Exchange Securities Trading Limited (“SGX”) on 4 May 2007.
As at 30 June 2011, the Group owned 16 containerships, of which fifteen are chartered out on long term time charters and one is chartered out on a one year time charter.
The group operates a fleet of sixteen containerships, of which fifteen are on long term fixed rate time charters and one on one-year time charter. Total revenue generated in 2nd quarter (2Q11) was US$37.6 million, an increase of 3% over the corresponding quarter in 2010. The increase was mainly attributable to the vessel Kaethe C. Rickmers contracting a higher net charter rate of US$23,888 per day that took effect on 25 March 2011 compared to the net charter rate of US$8,288 in the corresponding period in 2Q10.
Other income comprising mainly interest income and amortisation of deferred income from charter contracts (non-cash in nature) declined by 5% compared to 2Q10. The decline was attributable to the accelerated deployment of cash balances towards debt repayment as required under the debt restructuring terms in 2010. This resulted in a drop in interest income.
Other gains in 2Q11 of US$0.2 million comprises marked to market gains on cash flow hedges reflecting primarily movements in the forward curve for interest rates and fair value gain on the derivative component of the convertible loan.
A review for vessel and goodwill impairment was performed for the entire fleet for the 2nd quarter and half year ended 30 June 2011 (1H2011). For the period under review, a higher WACC of 7.52% (2010: 7.28%) was adopted as a result of changes in certain market base parameters and consequently, an impairment of goodwill of US$4.1 million (2Q10: nil) was made for a subsidiary as its carrying value exceeded its recoverable amount.
A write-back of vessel impairment of US$2.9 million (2Q10: nil) was recorded in this quarter as the vessel Kaethe C. Rickmers started operating at a higher net charter rate of US$23,888 per day since 25 March 2011.
Vessel operating expenses which include fixed vessel operating expenses, lubricant oil expense, vessel management fees, increased by 6% to US$8.1 million in 2Q11 from US$7.7 million in 2Q10.
The increase was due to a revision of fixed operating expenses and vessel management fees that took effect from 1 January 2011, as well as higher lubricant oil expense and additional insurance cover taken on the fleet.
Other trust expenses comprising professional fees and other administrative expenses decreased from US$0.9m in 2Q10 to US$0.2 million in 2Q11 as there were no major corporate events in the period under review. Consequently, no transaction fees were incurred in 2Q11.
Finance expenses decreased from US$15.3 million in 2Q10 to US$11.0 million in 2Q11 due mainly to a one time loan restructuring fee incurred in 2Q10 for US$5.4 million. The decrease was offset by higher interest expense due to interest service for the convertible loan as well as higher loan pricing that took effect in June 2010.
Overall, the Trust recorded a net profit after tax of US$8.6 million in 2Q11 compared to a profit of US$0.6 million in 2Q10. On a six-month basis, net profit after tax for 1H2011 was US$17.9 million compared to US$6.0 million for 1H2010.
Commentary on the significant trends and competitive conditions of the industry in which the
group operates and any known factors or events that may affect the group in the next reporting period and the next 12 months.
Growth in containership capacity is currently estimated at 8.1%* in 2011. Expected trade growth for the year 2011 is estimated to reach 9.4%*. The trade growth could be negatively affected should there be an economic slowdown in Europe and the US.
Freight rates in the two main trade lanes, Asia to Europe and Asia to US, are under significant pressure, which combined with high bunker prices, are having a negative effect on the liner operators’ earnings.
However, southbound trade from Europe to Latin America and Sub Saharan Africa continue to generate strong year-on-year growth figures of 17.7%* and 23.0%* respectively.
Rickmers Maritime’s fleet of modern container vessels is fully employed throughout 2011 at an average daily time charter rate of US$25,750 per vessel. The next open position is in March 2012 for one vessel, Kaethe C. Rickmers.
Barring any unforeseen circumstances, we believe our existing long-term leases will continue to generate steady cash flow for the Trust.
As part of the Trust’s financial restructuring, distribution per unit is capped at 0.6 US Cents per quarter during the period of waiver of the value-to-loan covenants.
The recommended distribution has not been provided for in these financial statements. This
distribution will be accounted for in the statement of changes in unitholders’ funds in the 3rd quarter of 2011.
Rickmers Maritime was listed on the Singapore Exchange Securities Trading Limited (“SGX”) on 4 May 2007.
As at 30 June 2011, the Group owned 16 containerships, of which fifteen are chartered out on long term time charters and one is chartered out on a one year time charter.
The group operates a fleet of sixteen containerships, of which fifteen are on long term fixed rate time charters and one on one-year time charter. Total revenue generated in 2nd quarter (2Q11) was US$37.6 million, an increase of 3% over the corresponding quarter in 2010. The increase was mainly attributable to the vessel Kaethe C. Rickmers contracting a higher net charter rate of US$23,888 per day that took effect on 25 March 2011 compared to the net charter rate of US$8,288 in the corresponding period in 2Q10.
Other income comprising mainly interest income and amortisation of deferred income from charter contracts (non-cash in nature) declined by 5% compared to 2Q10. The decline was attributable to the accelerated deployment of cash balances towards debt repayment as required under the debt restructuring terms in 2010. This resulted in a drop in interest income.
Other gains in 2Q11 of US$0.2 million comprises marked to market gains on cash flow hedges reflecting primarily movements in the forward curve for interest rates and fair value gain on the derivative component of the convertible loan.
A review for vessel and goodwill impairment was performed for the entire fleet for the 2nd quarter and half year ended 30 June 2011 (1H2011). For the period under review, a higher WACC of 7.52% (2010: 7.28%) was adopted as a result of changes in certain market base parameters and consequently, an impairment of goodwill of US$4.1 million (2Q10: nil) was made for a subsidiary as its carrying value exceeded its recoverable amount.
A write-back of vessel impairment of US$2.9 million (2Q10: nil) was recorded in this quarter as the vessel Kaethe C. Rickmers started operating at a higher net charter rate of US$23,888 per day since 25 March 2011.
Vessel operating expenses which include fixed vessel operating expenses, lubricant oil expense, vessel management fees, increased by 6% to US$8.1 million in 2Q11 from US$7.7 million in 2Q10.
The increase was due to a revision of fixed operating expenses and vessel management fees that took effect from 1 January 2011, as well as higher lubricant oil expense and additional insurance cover taken on the fleet.
Other trust expenses comprising professional fees and other administrative expenses decreased from US$0.9m in 2Q10 to US$0.2 million in 2Q11 as there were no major corporate events in the period under review. Consequently, no transaction fees were incurred in 2Q11.
Finance expenses decreased from US$15.3 million in 2Q10 to US$11.0 million in 2Q11 due mainly to a one time loan restructuring fee incurred in 2Q10 for US$5.4 million. The decrease was offset by higher interest expense due to interest service for the convertible loan as well as higher loan pricing that took effect in June 2010.
Overall, the Trust recorded a net profit after tax of US$8.6 million in 2Q11 compared to a profit of US$0.6 million in 2Q10. On a six-month basis, net profit after tax for 1H2011 was US$17.9 million compared to US$6.0 million for 1H2010.
Commentary on the significant trends and competitive conditions of the industry in which the
group operates and any known factors or events that may affect the group in the next reporting period and the next 12 months.
Growth in containership capacity is currently estimated at 8.1%* in 2011. Expected trade growth for the year 2011 is estimated to reach 9.4%*. The trade growth could be negatively affected should there be an economic slowdown in Europe and the US.
Freight rates in the two main trade lanes, Asia to Europe and Asia to US, are under significant pressure, which combined with high bunker prices, are having a negative effect on the liner operators’ earnings.
However, southbound trade from Europe to Latin America and Sub Saharan Africa continue to generate strong year-on-year growth figures of 17.7%* and 23.0%* respectively.
Rickmers Maritime’s fleet of modern container vessels is fully employed throughout 2011 at an average daily time charter rate of US$25,750 per vessel. The next open position is in March 2012 for one vessel, Kaethe C. Rickmers.
Barring any unforeseen circumstances, we believe our existing long-term leases will continue to generate steady cash flow for the Trust.
As part of the Trust’s financial restructuring, distribution per unit is capped at 0.6 US Cents per quarter during the period of waiver of the value-to-loan covenants.
The recommended distribution has not been provided for in these financial statements. This
distribution will be accounted for in the statement of changes in unitholders’ funds in the 3rd quarter of 2011.