TRANSATLANTIC: INTERIM REPORT JANUARY - SEPTEMBER 2005
Continued improvement in earnings
The Group reported strong earnings also in the third quarter, largely due to a continued positive trend in the offshore market.
Consolidated earnings before tax for the third quarter amounted to SEK 32 M (33). For comparable units, earnings improved by SEK 16 M to SEK 32 M (16).
Transatlantic operations were negatively affected by the Finnish labor market conflict and by lower newsprint volumes during the third quarter.
European Services developed favorably.
Results for the period January - September 2005:
(pro forma for preceding year in parentheses)
Net revenue: SEK 1,855 M (2,010) Operating profit: SEK 118 M (71) Profit before tax; SEK 352 M (72); Earnings per share: SEK 11.40 (2.30) Profit after current tax: SEK 352 M (72); Earnings per share: SEK 11.40 (2.30) Profit after full tax: SEK 341 M (50); Earnings per share: SEK 11.10 (1.60)
On September 30, 2005, shareholders' equity per share amounted to SEK 37.20 (24.80 pro forma at end of 2004). The equity/assets ratio at the end of the period was 35% (26% at December 31, 2004).
Full-year profit for 2005, excluding capital gains/losses and IFRS effects, is expected to improve considerably compared with the pro forma result for the preceding year.
Transatlantic's operations, goals and strategy Rederi AB Transatlantic was formed at the beginning of 2005 as a result of the merger of B&N Nordsjöfrakt AB and Gorthon Lines AB.
Transatlantic conducts shipping operations, focused on industrial shipping, in an organization that, after the divestment of the Dry Cargo operation, comprises three divisions: Transatlantic Services, European Services and Icebreaking/Offshore. Transatlantic and European Services specialize in contract shipping, primarily for the forest products and steel industries. The operations of the Icebreaking/Offshore division are based on combination vessels on long-term contracts and guaranteed income from icebreaking, in addition to other deployment, mainly for rig-relocation in the offshore market.
Transatlantic's business concept is to market, develop and deliver the market's most efficient transport solutions in close and active cooperation with customers.
Transatlantic's goal is to be the market leader in its segments, with profitability that generates a favorable return for the company's shareholders. The goal is a return of 12% on shareholders' equity and an equity/assets ratio that does not fall below 30%.
Transatlantic's Board of Directors has established the Group's strategy for the next few years. In particular, this emphasizes growth and sustainable profitability within the framework of the organization that the Group now has after the divestment of the dry cargo operations. Growth will be achieved both organically and through acquisitions. The Group is also very open toward the development of various partnerships aimed at broadening operations or implementing various investments and projects.
The ambitions for growth will require investments in new tonnage and replacement tonnage. These include all divisions and will be conducted without jeopardizing the Group's financial targets. It also means that the Group's tonnage requirements will partly be resolved through charter contracts and by external investors becoming wholly or partly involved in the fleet operated by the Group.
The Group's strategy and development places major demands on quality, safety and the environment, as well as awareness of customer demands and a willingness to change.
General developments during the third quarter
The period was characterized by continued strength in the shipping economy, but developments in certain segments were affected negatively by a seasonal decline in demand for tonnage.
The Transatlantic Services division was affected by the labor market conflict in the Finnish forest industry and a decline in newsprint volumes from Canada. Earnings were therefore lower than in the preceding year.
In the European Services division, scheduled services performed slightly less favorably than in the preceding year, while bulk operations and system traffic for forest products generated higher earnings than in the year-earlier period. The division's earnings remained unchanged compared with the preceding year.
Within Icebreaking/Offshore, demand for tonnage and deployment of the division's vessels were favorable during the period. Earnings were considerably higher than in the preceding year.
Continued high costs for bunker oil and rising USD rates had an adverse effect on the Group's earnings.
The Group's operating profit for the third quarter amounted to SEK 30 M (33). The figure for the preceding year includes SEK 17 M pertaining to the Dry Cargo division, which was divested during the second quarter of 2005.
The Group's net revenue for the first nine months of the year declined compared with the year-earlier period due to such factors as the divestment of the Dry Cargo division and the adverse effect of the lockout and strike situation in Finland on the Transatlantic Services division's operations. Consolidated net revenue totaled SEK 1,855 M (2,010)
Profit before capital costs ("EBITDA") for the period January-September amounted to SEK 534 M (253) and the Group's pretax profit amounted to SEK 352 M (72). Profit was positively affected by restructuring items in a net amount of SEK 158 M (0) and by the reversal of negative goodwill (in accordance with IFRS) in an amount of SEK 74 M in conjunction with the merger of B&N and Gorthon Lines.
Earnings per share after current tax amounted to SEK 11.40 (2.30).
Financial results for the third quarter are presented on the next page and in the enclosed nine-month accounts.
(For complete report see attached file)
Viking Supply Ships AB (publ) is a Swedish company with headquarter in Gothenburg, Sweden. Viking Supply Ships A/S is a subsidiary of Viking Supply Ships AB (publ). In addition Viking Supply Ships AB (publ) has the subsidiary TransAtlantic AB. The operations are focused on offshore and icebreaking primarily in Arctic and subarctic areas as well as on RoRo and container feeder services mainly between the Baltic Sea and the Continent. The company has in total about 800 employees and the turnover in 2014 was MSEK 3,190. The company’s B-shares are listed on the NASDAQ Stockholm, Small Cap segment. For further information, please visit: www.vikingsupply.com