Ultrapetrol Reports Financial Results For Second Quarter 2010
The Ocean segment generated adjusted EBITDA of $3.3 million in the second quarter of 2010, as compared to $11.4 million 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.
The 50% decrease in revenues is mainly attributable to the sale of two of our Capesize vessels, M.V. Princess Susana and M.V. Princess Nadia, which were sold and delivered to their buyers on December 10, 2009 and January 28, 2010, respectively. In addition, our Ocean revenues during the second quarter were also reduced by the partial operation of our Princess Marisol which was sold on April 23, 2010, coupled with a $5.7 million decrease in the net settlements of FFAs which qualified as cash flow hedges in the second quarter of 2010 compared to the same period of 2009 and to a 19% decrease in Time Charter rates of the BCI; partially offset by the entry into operation of our new container vessel Asturiano.
Our only remaining Capesize vessel, Princess Katherine, is fully covered with FFAs at rates higher than those prevailing in the spot and future markets for Capesize vessels. On August 4, 2010 we entered into an agreement (MOA) to sell our Princess Katherine for a total price of $10.5 million with expected delivery between September 1 and October 15, 2010. This transaction remains subject to completion and might not materialize as expected.The Company has operated a total of five vessels in its Product Carrier fleet in the second quarter of 2010, which continued to be employed in the South American coastal trade mostly under medium/long-term charters with the oil majors that operate in the region. On April 16, 2010, the Company took delivery of the 1,100-TEU, 2003-built container vessel M.V. Frisian Commander (renamed Asturiano). The vessel was ballasted from the Caribbean, positioned in South America and entered into operation on May 21, 2010 in a regular flag-protected container service to Patagonia, where she had completed its third voyage by June 30, 2010. Use of Non-GAAP Measures Ultrapetrol believes that the disclosed non-Generally Accepted Accounting Principles ("GAAP") measures such as adjusted EBITDA, and any other adjustments thereto, when presented in conjunction with comparable GAAP measures, are useful for investors in evaluating the liquidity of the company. These non-GAAP measures should not be considered a substitute for, or superior to, measures of liquidity prepared in accordance with GAAP. A reconciliation of adjusted EBITDA to segment operating profit and cash flow from operations is presented in the tables that accompany this press release.
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