Scorpio Bulkers Inc. Announces Financial Results for the Fourth Quarter of 2014
(firmenpresse) - MONACO -- (Marketwired) -- 03/04/15 -- Scorpio Bulkers Inc. (NYSE: SALT) ("Scorpio Bulkers," or the "Company") today reported its results for the three months and year ended December 31, 2014. The Company had minimal operations from the period from March 20, 2013 (date of inception) to December 31, 2013.
For the three months ended December 31, 2014, the Company had a net loss of $72.0 million, or $0.48 basic and diluted loss per share. This loss includes the loss on disposal of assets of $55.5 million and the noncash amortization of stock-based compensation of $6.3 million. The Company''s adjusted net loss was $16.5 million (see Non-GAAP Measures section below), or $0.11 basic and diluted loss per share, which excludes a loss on disposal of assets of $55.5 million, or $0.37 loss per share.
For the year ended December 31, 2014, the Company had a net loss of $116.6 million, or $0.85 basic and diluted loss per share. This loss includes the loss on disposal of assets of $55.5 million and the noncash amortization of stock-based compensation of $23.9 million. The Company''s adjusted net loss was $61.1 million (see Non-GAAP Measures section below), or $0.45 basic and diluted loss per share, which excludes a loss on disposal of assets of $55.5 million, or $0.40 loss per share.
The Company had minimal operations during the period from March 20, 2013 (date of inception) to December 31, 2013 so the prior year periods are not comparable to results for the three months and year ended December 31, 2014.
For the three months ended December 31, 2014, the Company recorded a net loss of $72.0 million. The Company recorded a net loss of $3.6 million for the three months ended December 31, 2013.
Time charter equivalent, or TCE revenue, a Non-GAAP measure, is vessel revenues less voyage expenses (including bunkers and port charges). TCE revenue is included herein because it is a standard shipping industry performance measure used primarily to compare period-to-period changes in a shipping company''s performance irrespective of changes in the mix of charter types (i.e., spot charters, time charters, and pool charters), and it provides useful information to investors and management.
TCE revenue was $17.6 million for the three months ended December 31, 2014, associated with 22 vessels time chartered-in and two vessel owned, for which TCE revenue per day was $8,660 (see the breakdown of daily TCE averages below). Time charter equivalent revenue per day was adversely affected by a depressed rate environment for dry bulk carriers.
Vessel operating costs for the three months ended December 31, 2014 were $1.2 million related to two Kamsarmax vessels delivered to the Company from a shipyard in August and September 2014.
Charterhire expense was $23.7 million for the three months ended December 31, 2014 relating to the time chartered-in vessels including those described below. See the Company''s Fleet List below for the terms of these agreements.
Depreciation for the three months ended December 31, 2014 was $0.6 million and relates to two owned Kamsarmax vessels.
During the three months ended December 31, 2014 the Company recorded a loss of $55.5 million associated with writing down seven contracts to construct vessels that the Company has classified as held for sale as of December 31, 2014. These seven contracts to construct vessels include one Kamsarmax construction contract and six contracts for construction of LR2 product tankers (see recent significant events, below).
General and administrative expense was $8.5 million for the three months ended December 31, 2014. Such amount included $6.3 million of restricted stock amortization (noncash) and the balance primarily related to payroll, directors'' fees, professional fees and insurance. General and administrative expense was $4.8 million for the three months ended December 31, 2013, which includes $3.4 million of restricted stock amortization.
During the three months ended December 31, 2013, the Company recorded a $0.9 million gain in connection with a shareholder receivable denominated in Norwegian kroner that arose in September 2013 but was not settled in U.S. dollars until October 2013.
For the year ended December 31, 2014, the Company recorded a net loss of $116.6 million and recorded a net loss of $6.3 million during the period from March 20, 2013 (date of inception) to December 31, 2013.
TCE revenue was $45.4 million for the year ended December 31, 2014, associated with 24 vessels time chartered-in and two vessels owned, for which the time charter equivalent revenue per day was $7,957 (see the breakdown of daily TCE averages below). Time charter equivalent revenue per day was adversely affected by the integration of the time chartered vessels into our fleet which required significant time and fuel as they had to be repositioned for their first voyages as well as a depressed rate environment for dry bulk carriers.
Vessel operating costs for the year ended December 31, 2014 was $1.6 million related to two owned Kamsarmax vessels delivered to the Company from a shipyard in August and September 2014.
Charterhire expense was $73.2 million for the year ended December 31, 2014 relating to the time chartered-in vessels including those described below. See the Company''s Fleet List below for the terms of these agreements.
Depreciation for the year ended December 31, 2014 was $0.7 million and relates to two Kamsarmax vessels delivered to the Company from a shipyard in August and September 2014.
During the year ended December 31, 2014 the Company recorded a loss of $55.5 million associated with writing down seven contracts to construct vessels that the Company has classified as held for sale as of December 31, 2014. These seven contracts to construct vessels include one Kamsarmax construction contract and six contracts for construction of LR2 product tankers (see recent significant events, below).
General and administrative expense was $31.9 million for the year ended December 31, 2014. Such amount included $23.9 million of restricted stock amortization (noncash) and the balance primarily related to payroll, directors'' fees, professional fees and insurance. General and administrative expense was $5.5 million for the period from March 20, 2013 (date of inception) to December 31, 2013. Such amount included $3.4 million of restricted stock amortization (noncash) and the balance primarily related to payroll, directors'' fees, professional fees and insurance.
During the period from March 20, 2013 (date of inception) to December 31, 2013, the Company incurred a $1.1 million loss in connection with a shareholder receivable denominated in Norwegian kroner that arose in September 2013 but was not settled in U.S. dollars until October 2013.
Agreements to Modify and Sell Existing Shipbuilding Contracts for Six Capesize Vessels
On December 17, 2014, the Company announced that it had (i) reached agreements with shipyards in South Korea and Romania to modify six newbuilding contracts for Capesize bulk carriers into newbuilding contracts for LR2 product tankers, (ii) reached an agreement to sell four of these LR2 newbuilding contracts to Scorpio Tankers Inc., a related party, and (iii) granted options to Scorpio Tankers Inc. to purchase the two remaining LR2 newbuilding contracts.
The sale price for each of the four LR2 newbuilding contracts is $51.0 million. The two option contracts, which expire on May 31, 2015, may be exercised by Scorpio Tankers Inc. for a fixed purchase price of $52.5 million for each contract.
Agreement to Sell Kamsarmax Newbuilding
On December 19, 2014, the Company announced that it had entered into an agreement to sell a Kamsarmax newbuilding dry bulk vessel for approximately $30.7 million. The vessel is currently being constructed at Tsuneishi Group (Zhoushan) Shipbuilding Inc., and has an expected delivery date in the third quarter of 2015.
Agreements to Modify Existing Shipbuilding Contracts for Three Capesize Vessels
On February 4, 2015, the Company announced that it had reached agreement with a shipyard in South Korea to modify existing newbuilding contracts for three Capesize vessels. The three contracts, two for vessels scheduled for delivery during the first quarter of 2016 and one for a vessel scheduled for delivery during the second quarter of 2016, will now provide for the construction of three LR1 product tankers, two of which will be scheduled for delivery during the second quarter of 2017 and one during the third quarter of 2017. As a result, the Company expects to incur a loss of approximately $22 million relating to writing down the contracts to their estimated fair market value. Also, upon completion of customary documentation, the LR1 contracts will be re-classified on the balance sheet as assets held for sale. Should the contracts be sold for their current fair market value, the estimated future cash obligations of the Company will be reduced by approximately $60 million. The Company has no plans for any further contract conversions. Scorpio Tankers Inc., has informed the Company that it will not purchase the LR1 vessels.
$409 Million Credit Facility
On December 30, 2014, the Company closed a $408.976 million senior secured credit facility arranged by two leading European financial institutions to finance a portion of the purchase price of 20 vessels (six Ultramax, nine Kamsarmax, and five Capesize vessels) with expected deliveries in 2015 and 2016. The facility was previously announced as a $540 million credit facility; however, the facility was reduced to $408.976 million due to the removal of the financing on the four Capesize vessels that the Company has agreed to convert into four LR2 product tankers (of which the Company will sell two LR2 product tankers to Scorpio Tankers Inc. and hold two LR2 product tankers for sale). The facility has a final maturity of six years from the date of signing.
$411.3 Million Credit Facility
On January 15, 2015, the Company closed a previously announced $411.264 million senior secured credit facility with a group of financial institutions to finance a portion of the purchase price of 12 Capesize vessels under construction at Sungdong Shipbuilding & Marine Engineering Co., Ltd. The facility matures in six years, and in certain circumstances up to 12 years, from the delivery of the final vessel securing the facility.
$42 Million Credit Facility
On January 30, 2015, the Company announced that it had closed a previously announced $42 million credit facility with a leading European financial institution to finance a portion of the purchase price of two Kamsarmax vessels (of which one Kamsarmax vessel was delivered in January 2015 to the Company from Imabari Shipbuilding Co. Ltd., Japan and one Kamsarmax vessel is under construction at Imabari Shipbuilding Co. Ltd., Japan). The facility may be drawn in two tranches, each of which has a final maturity of six years from the date of the respective vessel delivery from the yard.
$26 Million Credit Facility
On February 27, 2015, the Company closed a senior secured credit facility of $26 million with ABN AMRO Bank N.V., The Netherlands. The facility has been used to finance a portion of the purchase price of one Capesize vessel, which was delivered to the Company in Q1 2015. The facility shall mature at the earlier of (a) the date falling six months after the drawdown date; and (b) the date ten business days after the date on which the Chinese Ministry of Finance has approved insurance coverage to be provided by the China Export & Credit Insurance Corporation ("Sinosure") in respect of the $230.3 Million Credit Facility discussed below and drawings can be made under such facility. The terms and conditions of the facility, including covenants, are similar to those in the Company''s existing credit facilities and customary for financings of this type.
$19.8 Million Credit Facility
On March 2, 2015, the Company closed a senior secured credit facility of up to $19.8 million. The facility was previously announced as a $39.6 million credit facility, that has now been reduced to a size of $19.8 million due to the removal from the financing of one Kamsarmax vessel which we have classified as held for sale. The facility was arranged by ABN AMRO Bank N.V., The Netherlands, with insurance cover provided from the China Export & Credit Insurance Corporation ("Sinosure"). The facility will be used to finance a portion of the purchase price of one Kamsarmax vessel currently under construction at Tsuneishi Group Zhoushan Shipyard, China for delivery in Q1 2016. The facility shall mature 10 years from the date of delivery of the vessel. The terms and conditions of the facility, including covenants, are similar to those in the Company''s existing credit facilities and customary for financings of this type.
$230.3 Million Credit Facility
On March 2, 2015, the Company received a commitment from ABN AMRO Bank N.V. and The Export-Import Bank of China, for a loan facility of up to $230.3 million. This commitment finalizes a previously announced memorandum of understanding for a $234.9 million credit facility. This facility was arranged by ABN AMRO Bank N.V., The Netherlands, with insurance cover to be provided from the China Export & Credit Insurance Corporation ("Sinosure"). This facility will be used to finance a portion of the purchase price of seven Capesize vessels (of which one vessel has been delivered and six vessels are currently under construction at Shanghai Waigaoqiao Shipbuilding Co., Ltd, China) for delivery between Q1 2015 and Q2 2016. The terms and conditions of this facility, including covenants, will be similar to those in the Company''s existing credit facilities and customary for financings of this type. This facility is subject to customary conditions precedent and the execution of definitive documentation.
Update on Fleet Financing
Including the five credit facilities described above (excluding the $26 million Credit Facility), the Company has now either signed credit facility agreements for or received commitments for 70 of the vessels in its fleet, including five vessels which the Company intends to sell. In addition, the Company has agreed terms and conditions with a leading European financial institution to finance a portion of the cost of our additional five unfinanced vessels. The terms and conditions of these facilities, for which commitments are expected during the first half of 2015, are consistent with those of the Company''s existing credit commitments. The closing of any resultant credit facilities would remain subject to credit approval and customary conditions precedent, including negotiation and execution of definitive documentation.
Newbuilding Vessels Deliveries
Through March 2, 2015 the Company has taken delivery of the following Newbuilding vessels during 2015:
SBI Bravo, an Ultramax vessel, was delivered from Nantong COSCO KHI Ship Engineering Co., Ltd.
SBI Athena, an Ultramax vessel, was delivered from Chengxi Shipyard Co., Ltd.
SBI Samba, a Kamsarmax vessel, was delivered from Imabari Shipbuilding Co. Ltd.
SBI Antares, an Ultramax vessel, was delivered from Nantong COSCO KHI Ship Engineering Co., Ltd.
SBI Puro, a Capesize vessel, was delivered from Shanghai Waigaoqiao Shipbuilding Co., Ltd. The Company has agreed to time charter-out the SBI Puro to a major European charterer for 10-13 months at $13,800 per day.
SBI Leo, an Ultramax vessel, was delivered from Dalian COSCO KHI Ship Engineering Co. Ltd.
As of March 2, 2015, the Company had $182.1 million in cash and cash equivalents.
We made the following drawdowns from our credit facilities in November 2014:
As of March 2, 2015, the Company''s outstanding debt balance, and amount available to draw is as follows:
Our Newbuilding Program consists of contracts for the construction of 70 dry bulk vessels, comprised of 29 Ultramax newbuildings, 22 Kamsarmax newbuilding and 19 Capesize newbuildings. Through December 31, 2014, we have taken delivery of two Kamsarmax vessels. The aggregate construction price for the remaining 68 drybulk vessels is $2,496.9 million. As of March 2, 2015, we have paid a total of $946.6 million in installment payments due under these shipbuilding contracts including for those vessels delivered to us in 2015. The remaining $1,550.3 million is scheduled to be paid in installments through the delivery dates of each vessel. The estimated future payment dates and amounts are as follows(1):
We also have contracts for ten vessels which we intend to sell, consisting of one Kamsarmax vessel under construction, six LR2 product tankers under construction (which were previously Capesize vessels under construction) and three Capesize vessels under construction to be converted to LR1 product tankers under construction. Through March 2, 2015, we have paid $171.5 million under these contracts, including payments made on the nine Capesize vessels under construction prior to their modification. These ten contracts, including the nine contracts for product tankers, have an aggregate construction price of $527.8 million of which $369.1 million has not been paid as of March 2, 2015. Until these contracts are sold, the remaining installment payments under the terms of these contracts are estimated to be payable as follows (1):
Wednesday, March 4, 2015 and will host a conference call later in the day at 11:30 AM Eastern Standard Time and 5:30 PM Central European Time.
Participants should dial into the call 10 minutes before the scheduled time using the following numbers: 1 (800)-236-9788 (U.S.) or 1 (913)-312-0975 (International). The conference participant passcode is 3379110. The information provided on the teleconference is only accurate at the time of the conference call, and the Company will take no responsibility for providing updated information.
There will also be a simultaneous live webcast over the internet, through the Scorpio Bulkers Inc. website . Participants to the live webcast should register on the website approximately 10 minutes prior to the start of the webcast.
Owned vessels
Vessels under construction
Vessels to be Sold
As used in this earnings release "Dacks" refers to Dalian COSCO KHI Ship Engineering Co. Ltd., "Daehan" refers to Daehan Shipbuilding Co., Ltd., "Daewoo" refers to Daewoo Mangalia Heavy Industries S.A.,"Chengxi" refers to Chengxi Shipyard Co., Ltd., "Hudong" refers to Hudong-Zhonghua Shipbuilding (Group) Co., Inc., "Imabari" refers to Imabari Shipbuilding Co. Ltd., "Mitsui" refers to Mitsui Engineering & Shipbuilding Co. Ltd., "Nacks" refers to Nantong COSCO KHI Ship Engineering Co., Ltd., "Sungdong" refers to Sungdong Shipbuilding & Marine Engineering Co., Ltd., "Tsuneishi" refers to Tsuneishi Group (Zhoushan) Shipbuilding Inc., "Waigaoqiao" refers to Shanghai Waigaoqiao Shipbuilding Co., Ltd., and "Yangzijiang" refers to Jiangsu Yangzijiang Shipbuilding Co. Ltd.
Time chartered-in vessels
The Company has time chartered-in 14 dry bulk vessels. The terms of the time charter-in contracts are summarized as follows:
Scorpio Bulkers Inc. is a provider of marine transportation of dry bulk commodities. Scorpio Bulkers Inc. currently owns eight vessels, consisting of one Capesize, three Kamsarmax vessels and four Ultramax vessels. The Company also time charters-in 14 dry bulk vessels (consisting of one Handymax, one Ultramax, three Supramax, two Panamax, four Kamsarmax and three Post-Panamax vessels) and has contracted for 63 dry bulk vessels consisting of 25 Ultramax, 20 Kamsarmax (including one vessel held for sale) and 18 Capesize vessels, from shipyards in Japan, South Korea, China and Romania. The Company has also contracted for nine product tankers that are currently classified as held for sale, including six LR2''s and three LR1''s from shipyards in South Korea and Romania. Upon final delivery of all of the vessels the owned fleet is expected to have a total carrying capacity of approximately 7.0 million deadweight tonnes. Additional information about the Company is available on the Company''s website , which is not a part of this press release.
Matters discussed in this press release may constitute forward-looking statements. The Private Securities Litigation Reform Act of 1995 provides safe harbor protections for forward-looking statements in order to encourage companies to provide prospective information about their business. Forward-looking statements include statements concerning plans, objectives, goals, strategies, future events or performance, and underlying assumptions and other statements, which are other than statements of historical facts. The Company desires to take advantage of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 and is including this cautionary statement in connection with this safe harbor legislation. The words "believe," "anticipate," "intend," "estimate," "forecast," "project," "plan," "potential," "may," "should," "expect," "pending" and similar expressions identify forward-looking statements.
The forward-looking statements in this press release are based upon various assumptions, many of which are based, in turn, upon further assumptions, including without limitation, our management''s examination of historical operating trends, data contained in our records and other data available from third parties. Although we believe that these assumptions were reasonable when made, because these assumptions are inherently subject to significant uncertainties and contingencies which are difficult or impossible to predict and are beyond our control, we cannot assure you that we will achieve or accomplish these expectations, beliefs or projections.
In addition to these important factors, other important factors that, in our view, could cause actual results to differ materially from those discussed in the forward-looking statements include the failure of counterparties to fully perform their contracts with us, the strength of world economies and currencies, general market conditions, including fluctuations in charter rates and vessel values, changes in demand for dry bulk vessel capacity, changes in our operating expenses, including bunker prices, drydocking and insurance costs, the market for our vessels, availability of financing and refinancing, charter counterparty performance, ability to obtain financing and comply with covenants in such financing arrangements, changes in governmental rules and regulations or actions taken by regulatory authorities, potential liability from pending or future litigation, general domestic and international political conditions, potential disruption of shipping routes due to accidents or political events, vessels breakdowns and instances of off-hires and other factors. Please see our filings with the Securities and Exchange Commission for a more complete discussion of these and other risks and uncertainties.
This press release describes adjusted net income, which is not a measure prepared in accordance with GAAP. The Non-GAAP measure presented in this press release as we believe that it provides investors with a means of evaluating and understanding how the Company''s management evaluates the Company''s operating performance. These Non-GAAP measures should not be considered in isolation from, as substitutes for, or superior to financial measures prepared in accordance with GAAP.
Contact:
Scorpio Bulkers Inc.
+377-9798-5715 (Monaco)
+1-646-432-1675 (New York)
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Datum: 04.03.2015 - 07:30 Uhr
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