Ultrapetrol Reports Financial Results For Second Quarter 2010
The Company's new shipyard for building barges inaugurated in December 2009 continued to operate successfully with productivity levels ahead of our plan for the initial eight months of activity. The yard is the most modern of its kind in South America and we believe it will allow the Company to supply the capacity that we expect will be required in the near future due to growing volumes of liquids, soybeans and iron ore produced in the region. On July 30, 2010 the first tanker barge built in our yard entered into operation and was added to our river fleet. We have successfully continued the re-engining and re-powering program that aims to convert the engines on eleven of our main push boats. The first of them, Zonda I, started operations on May 22, 2010, equipped with more powerful heavy fuel engines instead of the diesel consuming engines that we operate in all other push boats today. This should lead to gradually increasing savings in fuel expense and to an increase in tow size and navigation speed both of which we have already started to benefit from through the operation of Zonda I.
In the Offshore Supply Business, six vessels operated in the second quarter of 2010. The adjusted EBITDA generated by the Offshore Supply segment during the quarter was $5.1 million or 42% higher, than the $3.6 million generated in the same period of 2009. For a reconciliation of adjusted EBITDA to segment operating profit, please see the tables at the end of this release.
Total revenues from the Offshore Supply Business increased by 44% attributable primarily to a full three months' operation in 2010 of the UP Rubi, which started its employment with Petrobras under a long-term time charter in August 2009, and to the full quarter operation of our vessels, UP Esmeralda and UP Safira. Both the UP Esmeralda and UP Safira are operating under long-term time charter with Petrobras after arriving in Brazil from the North Sea during the first quarter of 2010 at improved rates from those prevailing in the North Sea in the same period of 2009. All of our six existing PSVs are now chartered to Petrobras on long-term employments at attractive rates for periods ranging between three to four years.Ultrapetrol has continued with the construction of an additional six new PSVs that will be added to the fleet. The two PSVs under construction in China, Up Turquoise and UP Jasper, are expected to be delivered in the fourth quarter of 2010, while the first of the four vessels under construction in India is now expected to be delivered in the first quarter of 2011. The Company has continued to invest heavily in the expansion of its PSV fleet since it believes that the Brazilian market will grow substantially due to the support of Petrobras' aggressive capital expenditure plans.
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