Tanker operator US Shipping Partners increased its revenue during Q3, to US$5.9m, compared to the same period last year but made a net loss of US$0.4m, compared to a net profit of US$4.5m in the same period last year. The revenue increase was due to the entry into service of two additional vessels.
Paul Gridley, Chairman and Chief Executive Officer of the Partnership, says: "The third quarter was marked by key accomplishments for the Partnership, including the creation of a joint venture with The Blackstone Group to build new product tankers at a yard owned by General Dynamics Corp., and securing financing to fully fund three of the four new ATBs we have on order with Manitowoc as well as our equity contribution to the Joint Venture. Fundamentals in our market continue to be strong."
The company says in a statement: “The loss was partially the result of a $2.0 million increase in interest expense, net of interest income, due to higher interest rates and increased outstanding borrowings. The Partnership also recorded a $2.5 million loss on debt extinguishment and a $1.9 million gain on termination of interest rate swaps during the third quarter of 2006 as a result of the August refinancing. Additionally, during the third quarter 2006, the Partnership recorded an expense of $0.3 million for a fee paid to Sterling Investment Partners Advisors LLC ("Sterling"), an affiliate of the entity that controls the entity that owns the Partnership's general partner. The fee was related to advisory services provided by Sterling during the Partnership's August 2006 refinancing.”
It adds: “For the three months ended September 30, 2006, EBITDA was US$12.1m a decrease of US$0.1m from EBITDA of US$12.2 million in the same period last year. The addition of the Houston and the Sea Venture contributed US$1.4 million of additional EBITDA. An improved spot market and faster voyage turnaround time helped increase time charter equivalent rates. Additionally, the Partnership recorded a gain on the termination of its interest rate swaps of $1.9min connection with its August refinancing. These increases were offset by a $2.5 million loss on debt extinguishment, incurred in connection with the August refinancing, and a decrease in EBITDA related to off-hire time for the drydocking of the Charleston and the Groton.”