Business Segment Highlights
The River Business experienced a 26% increase in the volume of cargo transported in the first quarter of 2013 as compared with the same period of 2012, which was due to normalized rainfall levels resulting in a significantly higher crop, most of which has already been collected.
First quarter 2013 River Business segment adjusted EBITDA was $6.5 million versus $(0.5) million in the same period of 2012, a $7.0 million increase. For a reconciliation of segment adjusted EBITDA to operating profit (loss), please see the tables at the end of this release.Results for the first quarter of 2013 demonstrate the positive compounded effects of rate increases and the normalized rainfall levels, taking into consideration the expected seasonality inherent in the segment. According to the latest USDA estimates, the soybean crop in Paraguay for 2013 is expected to be 8.4 million tons, 4.0 million tons or 91% above 2012 and 17% above 2011 crop. Argentina, Brazil, Bolivia, Paraguay and Uruguay are estimated to account for approximately 55% of world soybean production in 2013, as compared to 30% in 1995. These figures are a sign of the strength of the long-term growth prospects of the agricultural sector along the Hidrovia, by which seeded area is expected to continue to grow, fostered by the strong prices of soybean and other agricultural commodities. This steady long-term growth trend represents an important demand driver for Ultrapetrol's River Business. In addition, iron ore production in the three mines connected with the river system has also increased substantially in the last decade. During the first quarter of 2013 we entered into a Master Agreement whereby we agreed to build and sell from our Punta Alvear yard a set of seven jumbo dry barges and seven jumbo tank barges to a third party for export to Colombia. The yard will continue to be fully employed until the end of 2013, focusing on the construction of barges to be delivered under the shipbuilding contracts already signed and barges for the Company's River Business.