Excel Maritime Carriers Ltd. (EXM) Q2 2012 Earnings Call August 29, 2012 8:30 am ET Executives Pavlos Kanellopoulos – Chief Financial Officer Ismini Panayotides – Business Development Officer Analysts Natasha Boyden – Global Hunter Michael Webber – Wells Fargo Joshua Katzeff – Deutsche Bank Presentation Operator
On Slide 3, we present the highlights of the quarter. The Company’s results reflect the weak trading conditions during the quarter. As a result, our quarterly EBITDA recorded a drop to $17.7 million. The agreement with our lenders back in April 2012 helped to sustain our liquidity position as we benefited from installment deferrals. We continuously increased our fleet-wide charter coverage for 2012 to 83% at an average charter rate of $13,667 per day. And finally, our ETM program that we initiated on May 8 has led to date to the issuance of 5.8 million shares with net equity proceeds of 4 million at an effective price of $0.70 per share.Moving on to the earnings highlights, our voyage revenues for the second quarter amounted to 63.1 million against 92 million in 2011, recording a drop of 31% while our EBITDA settled at 17.7 million versus 44 million in 2012, corresponding to a decline of 60% on the back of 26% drop in the Baltic Panamax index during the two periods. In terms of blended (inaudible) TCE rate per vessel, for the second quarter of 2012 it stood at $12,871 or 32% lower than the TCE achieved in 2011. The quarter-on-quarter drop in revenues had a direct impact on our profitability, leading to an overall loss making quarter. Reported net loss for the quarter was at 33.4 million or $0.37 per share compared to a loss of 16 million or $0.19 per share in 2011. The results of both periods include a number of non-cash items, the amortization of favorable and unfavorable assumed charters amounting to a net gain of 1 million in 2012 versus a net loss of 9 million in 2011, unrealized gains on the derivative financial instruments of 3 million in 2012 versus a loss of 1.3 million in second quarter 2011. Net income excluding the above non-cash items amounts to a loss of 36.4 million or $0.41 per share compared to a loss of 5.6 million of $0.07 per share in 2011.
Our drydock costs during the second quarter were normalized to 3.7 million after an incidental heavy drydock first quarter with 8.6 million drydock and special service expenses. Going forward, we estimate our drydock costs to amount approximately 7 million for the next two quarters of the year.The fleet utilization was at 97.4%, recovering from lower levels in Q1. Our vessel operating expenses during the second quarter of 2012 were contained further, averaging 4,822 per vessel per day against $5,000 in 2011, corresponding to a savings of 3.6%. Finally, our cash G&A costs were lower than the corresponding last year period at $1,788 per vessel per day versus $1,975 per vessel per day in 2011. You will be able to find in the appendix of the presentation a reconciliation of four non-GAAP measures just mentioned. On Slide 5, we will go over our balance sheet highlights as of June end 2012. Cash, including restricted cash, totaled 92 million. Total debt net of deferred financing fees amounted to $1.31 billion, unchanged versus December 31. As far as our current status with our 1.4 billion facility, the Company is in compliance with all financial covenants of the facility agreement, albeit with tighter headroom. In particular, minimum fair value covenant is at 99% versus a threshold of 80%. Maximum leverage ratio is at 85% versus a threshold of 90%, and an interest cover of over 2.1 times versus threshold of 1.75 times. On Slide 6, we illustrate our cash in and outflow movement for the second quarter of 2012. We opened the quarter with cash balance of 94.4 million, generated cash inflows from operations 14.3 million, and paid 14.5 towards cash interest expenses and interest rate swaps. We raised 3.1 million from the ETM program during the quarter. On the cash outflow front, the quarter benefited from the absence of scheduled installments in the 1.4 billion facility as the Company exercised its option to defer the installment, limiting the cash outflow to 2.6 million for bank debt repayment. We paid fees relating to the amendment agreement with our lenders amounting to 2.6 million. Our total cash inflows minus our cash outflows for the quarter reduced our ending cash position by 2.3 million to 92.1 million. Read the rest of this transcript for free on seekingalpha.com