Scorpio Bulkers Inc. Announces Financial Results for the Second Quarter of 2015
(firmenpresse) - MONACO -- (Marketwired) -- 07/28/15 -- Scorpio Bulkers Inc. (NYSE: SALT) ("Scorpio Bulkers," or the "Company") today reported its results for the three and six months ended June 30, 2015 and 2014.
For the three months ended June 30, 2015, the Company''s adjusted net loss was $16.6 million (see Non-GAAP Measures section below), or $0.09 basic and diluted loss per share, which excludes (i) a write down on assets held for sale of $119.6 million and (ii) the $2.4 million write off of a portion of the deferred financing costs of two credit facilities, or $0.62 loss per share (see Non-GAAP Measures section below). For the three months ended June 30, 2015, the Company had a net loss of $138.6 million, or $0.71 basic and diluted loss per share. This loss includes the write down on assets held for sale of $119.6 million, a write off of $2.4 million of a portion of deferred financing costs accumulated on two credit facilities for which the commitments were reduced pursuant to the removal from the facilities of certain vessels that have been classified as held for sale, and the noncash amortization of stock-based compensation of $6.1 million.
For the three months ended June 30, 2014, the Company had a net loss of $15.0 million, or $0.11 basic and diluted loss per share. This loss includes the noncash amortization of stock-based compensation of $6.2 million.
For the six months ended June 30, 2015, the Company''s adjusted net loss was $33.4 million (see Non-GAAP Measures section below), or $0.18 basic and diluted loss per share, which excludes (i) a write down on assets held for sale of $151.4 million and (ii) the $6.0 million write off of a portion of the deferred financing costs of three credit facilities, or $0.85 loss per share (see Non-GAAP Measures section below). For the six months ended June 30, 2015, the Company had a net loss of $190.7 million, or $1.03 basic and diluted loss per share. This loss includes the write down on assets held for sale of $151.4 million, a write off of $6.0 million of a portion of deferred financing costs accumulated on three credit facilities for which the commitments were reduced pursuant to the removal from the facilities of certain vessels that have been classified as held for sale, and the noncash amortization of stock-based compensation of $12.2 million.
For the six months ended June 30, 2014, the Company had a net loss of $25.7 million, or $0.19 basic and diluted loss per share. This loss includes the noncash amortization of stock-based compensation of $11.3 million.
Public Offering
On June 16, 2015, the Company issued 133,000,000 shares of common stock, par value $0.01 per share ("Common Shares") at $1.50 per share in an underwritten public offering (the "Offering"). Scorpio Services Holding Limited purchased an aggregate of 10,000,000 Common Shares at the public offering price.
On June 23, 2015, underwriters exercised their option to purchase an additional 19,950,000 additional common shares in connection with the Offering.
Newbuilding Program Updates
On April 21, 2015, the Company announced that it entered into agreements to sell three Capesize newbuilding drybulk vessels, one Kamsarmax newbuilding drybulk vessel and three LR1 newbuilding product tankers to unrelated third-parties for approximately $290 million in aggregate. The Capesize vessels are currently being constructed in Romania, and have expected delivery dates between the fourth quarter of 2015 and the second quarter of 2016. The Kamsarmax vessel is currently being constructed in China and has an expected delivery date in the first quarter of 2016. The LR1 product tankers are currently being constructed in South Korea, two of which are scheduled for delivery during the second quarter of 2017 and one during the third quarter of 2017.
On April 27, 2015, the Company announced that it entered into agreements to sell two Capesize newbuilding drybulk vessels and one Ultramax newbuilding drybulk vessel to unrelated third-parties for approximately $111 million in aggregate. The Capesize vessels are currently being constructed in China and South Korea, and have expected delivery dates between the third quarter of 2015 and the second quarter of 2016. The Ultramax vessel is currently being constructed in China and has an expected delivery date in the first quarter of 2016.
On June 4, 2015, the Company announced that it entered into agreements to sell three Capesize newbuilding drybulk vessels and two LR2 product tankers under construction to unrelated third-parties for approximately $236 million in aggregate. The Capesize vessels are currently being constructed in China, and have expected delivery dates between the first quarter of 2016 and the second quarter of 2016. The LR2 product tankers (which were converted to Aframax tankers) are currently being constructed in Romania, and have expected delivery dates between the fourth quarter of 2016 and the first quarter of 2017.
The three LR1 newbuilding product tankers and the Kamsarmax newbuilding vessel were classified as held for sale during the three months ended March 31, 2015, for which the Company recorded a write down on assets held for sale of $30.7 million, reflective of these sales. The loss on disposal of the eight Capesize newbuilding vessels, one Ultramax newbuilding vessel, and two LR2 product tankers and incremental losses associated with assets held for sale as of March 31, 2015 was $119.6 million which was recorded during the second quarter of 2015.
Inclusive of the sales of construction contracts described above and other construction contracts previously classified as assets held for sale, we have agreed to sell 20 newbuilding construction contracts, consisting of eight Capesize newbuilding contracts, two Aframax tanker newbuilding contracts, two Kamsarmax newbuilding contracts, one Ultramax newbuilding contract, four LR2 product tanker newbuilding contracts and three LR1 product tanker newbuilding contracts. These sales are expected to result in approximately $197.0 million of aggregate cash proceeds to us, including refunds of deposits previously made, and an approximately $673.2 million reduction of our capital expenditure obligations.
Of the 20 newbuilding contracts we have agreed to sell, five Capesize newbuilding vessels, one Kamsarmax newbuilding vessel, one Ultramax newbuilding vessel, four LR2 newbuilding product tankers, two Aframax newbuilding tankers and three LR1 newbuilding product tankers have been sold and we are no longer under any obligation for remaining contractual installments under those contracts.
Fleet Financing Updates
$409.0 Million Credit Facility
Effective May 13, 2015, the commitment under our $409.0 Million Credit Facility was reduced by $73.0 million due to the sale of three Capesize vessels that were serving as partial security under the facility, and the addition of one Ultramax vessel to the security package under the facility. As a result of this reduction, during the second quarter of 2015, we also wrote off $2.1 million of deferred financing costs accumulated on this facility which represents the portion of the facility that can no longer be utilized.
$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 arranged by ABN AMRO Bank N.V., with insurance cover provided from China Export & Credit Insurance Corporation ("Sinosure"). The facility was to 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. This Kamsarmax was classified as held for sale as of March 31, 2015, and was sold during April 2015. Accordingly, this facility was terminated on April 20, 2015 and the aggregate commitment fees paid of $0.4 million were written off during the second quarter of 2015.
$240.3 Million Credit Facility
On July 14, 2015, the Company''s $240.264 million senior secured credit facility, which was expected to finance a portion of the purchase price of seven Capesize vessels under construction at Sungdong Shipbuilding & Marine Engineering Co., Ltd., was reduced by $34 million pursuant to the sale of one Capesize vessel contract described above, and the facility will be used to finance a portion of the purchase price of six Capesize vessels under construction, two of which have been delivered. As a result of this reduction, we expect to write off, during the third quarter of 2015, approximately $0.8 million of deferred financing costs accumulated on this facility which represents the portion of the facility that will no longer be utilized.
$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 facility was arranged by ABN AMRO Bank N.V., with insurance cover to be provided from 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. The credit facility is pending approval from the Chinese Ministry of Finance on the insurance coverage to be provided by Sinosure, which is expected to be granted within the next three months. Pursuant to the sale of four Capesize vessel contracts, the facility is expected to be reduced by approximately $133 million and the facility will be used to finance a portion of the purchase price of three Capesize vessels (of which one vessel has been delivered for which we borrowed $26 million in bridge financing and two vessels are currently under construction).
Update on Fleet Financing
Including the credit facilities described above, the Company has now either signed credit facility agreements for or received commitments for 56 of the vessels in its fleet, excluding the vessels which the Company intends to sell. In addition, the Company has received proposals from four leading European financial institutions to finance a portion of the cost of our remaining four unfinanced dry bulk vessels. The terms and conditions of these facilities, for which commitments are expected during the third quarter 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.
Recent Newbuilding Vessels Deliveries
Between April 1, 2015 and July 27, 2015 the Company has taken delivery of the following newbuilding vessels:
SBI Camacho, a Capesize vessel, was delivered from Sungdong Shipbuilding & Marine Engineering Co., Ltd.
SBI Echo, an Ultramax vessel, was delivered from Imabari Shipbuilding Co., Ltd.
SBI Montesino, a Capesize vessel, was delivered from Sungdong Shipbuilding & Marine Engineering Co., Ltd.
SBI Lyra, an Ultramax vessel, was delivered from Dalian COSCO KHI Ship Engineering Co. Ltd.
As of July 27, 2015, the Company had $448.2 million in cash and cash equivalents.
We made the following drawdowns from our credit facilities during the three months ended June 30, 2015:
As of July 27, 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 60 dry bulk vessels, comprised of 28 Ultramax newbuildings, 21 Kamsarmax newbuilding and 11 Capesize newbuildings. Of this total, through July 27, 2015, we have taken delivery of three Capesize, three Kamsarmax and six Ultramax vessels. The aggregate construction price for the remaining 48 drybulk vessels is $1,621.4 million. Of this amount, $994.3 million remains unpaid as of July 27, 2015 and 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):
(1) These are estimates only and are subject to change as construction progresses.
(2) Relates to payments expected to be made from July 27, 2015 to September 30, 2015.
We also have contracts for four vessels which we intend to sell, consisting of three Capesize vessels under construction and one Kamsarmax vessel under construction. Through July 27, 2015, we have paid $51.0 million under these contracts. These four contracts have an aggregate construction price of $199.5 million of which $148.5 million has not been paid as of July 27, 2015. Until these contracts are sold, the remaining installment payments under the terms of these contracts are estimated to be payable as follows (1):
(1) These are estimates only and are subject to change as construction progresses.
(2) Relates to payments expected to be made from July 27, 2015 to September 30, 2015.
For the three months ended June 30, 2015 and 2014, the Company recorded a net loss of $138.6 million and $15.0 million, respectively.
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 $12.8 million for the three months ended June 30, 2015, associated with 13 vessels time chartered-in and nine vessels owned compared to TCE revenue of $13.0 million during the three months ended June 30, 2014, associated with chartering in 19 vessels. TCE revenue per day was $6,737 and $8,867 for the three months ended June 30, 2015 and 2014, respectively (see the breakdown of daily TCE averages below). The decrease in TCE revenue during the three months ended June 30, 2015 compared to the prior year period is primarily attributable to the weakness in the dry bulk market. Such decrease occurred in spite of an increase in the number of revenue days, which increased to 1,897 days during the three months ended June 30, 2015 compared to 1,471 days during the prior year period
Vessel operating costs for the three months ended June 30, 2015 were $4.5 million related to three Kamsarmax vessels, four Ultramax vessels and two Capesize vessels that we owned during the three months ended June 30, 2015. The Company did not own any vessels for the three months ended June 30, 2014 and, accordingly, did not have any vessel operating costs during that period.
Charterhire expense was $13.4 million and $19.9 million for the three months ended June 30, 2015 and 2014, respectively, relating to the time chartered-in vessels including those described below. Such decrease during the three months ended June 30, 2015 compared to the prior year period relates to a fewer number of vessels time chartered-in during the current year period. See the Company''s Fleet List below for the terms of these agreements.
Depreciation for the three months ended June 30, 2015 was $2.6 million and relates to three Kamsarmax vessels, four Ultramax vessels and two Capesize vessels. The Company did not own any vessels for the three months ended June 30, 2014 and, accordingly, did not incur any depreciation during that period.
General and administrative expense was $8.6 million for the three months ended June 30, 2015. Such amount included $6.1 million restricted stock amortization (noncash) and the balance primarily related to payroll, directors'' fees, professional fees and insurance. General and administrative expense was $8.5 million for the three months ended June 30, 2014, which included $6.2 million of restricted stock amortization.
During the three months ended June 30, 2015 the Company recorded a loss of $119.6 million associated with writing down nine contracts to construct vessels that the Company has classified as held for sale during the three months ended June 30, 2015 as well as incremental write downs of certain construction contracts classified as held for sale as of March 31, 2015. These nine contracts to construct vessels reclassified to assets held for sale during the three months ended June 30, 2015, include one Kamsarmax construction contract and two contracts for construction of Aframax product tankers (see recent significant events, below).
During the three months ended June 30, 2015, the Company recorded a $2.4 million loss associated with writing off a portion of deferred financing costs accumulated on two credit facilities for which the commitments were reduced pursuant to the removal from the facility of certain vessels that have been classified as held for sale.
For the six months ended June 30, 2015 and 2014, the Company recorded a net loss of $190.7 million and $25.7 million, respectively.
TCE revenue was $25.3 million for the six months ended June 30, 2015, associated with 20 vessels time chartered-in and nine vessels owned compared to TCE revenue of $15.5 million during the six months ended June 30, 2014, associated with chartering in 19 vessels. TCE revenue per day was $6,767 and $8,163 for the six months ended June 30, 2015 and 2014, respectively (see the breakdown of daily TCE averages below). The decrease in TCE revenue per day is due to the weakness in the drybulk market. The increase in TCE revenue during the six months ended June 30, 2015 compared to the prior year period is primarily attributable to the increase in the number of revenue days, which increased to 3,742 days during the three months ended June 30, 2015 compared to 1,895 days during the prior year period.
Vessel operating costs for the six months ended June 30, 2015 was $7.5 million related to three Kamsarmax vessels, four Ultramax vessels and two Capesize vessels. The Company did not own any vessels for the three months ended June 30, 2014 and, accordingly, did not have any vessel operating costs during that period.
Charterhire expense was $29.7 million and $26.6 million for the six months ended June 30, 2015 and 2014, respectively, relating to the time chartered-in vessels including those described below. This increase is due to a greater number of days for which vessels were chartered-in during the 2015 period compared to the 2014 period. See the Company''s Fleet List below for the terms of these agreements.
Depreciation for the six months ended June 30, 2015 was $4.1 million and three Kamsarmax vessels, four Ultramax vessels and two Capesize vessels. The Company did not own any vessels for the six months ended June 30, 2014 and, accordingly, did not incur any depreciation during that period.
General and administrative expense was $16.9 million for the six months ended June 30, 2015. Such amount included $12.2 million of restricted stock amortization (noncash) and the balance primarily related to payroll, directors'' fees, professional fees and insurance. General and administrative expense was $15.4 million for the six months ended June 30, 2014. Such amount included $11.3 million of restricted stock amortization (noncash) and the balance primarily related to payroll, directors'' fees, professional fees and insurance.
During the six months ended June 30, 2015 the Company recorded a loss of $151.4 million associated with writing down 13 contracts to construct vessels that the Company has classified as held for sale during the six months ended June 30, 2015, as well as incremental write downs of certain construction contracts classified as held for sale as of December 31, 2014.
During the six months ended June 30, 2015, the Company recorded a $6.0 million loss associated with writing off a portion of deferred financing costs accumulated on three credit facilities for which the commitments were reduced pursuant to the removal from the facility of certain vessels that have been classified as held for sale.
As used in this earnings release "Dacks" refers to Dalian COSCO KHI Ship Engineering Co. Ltd., "Daehan" refers to Daehan Shipbuilding Co., Ltd., "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 11 dry bulk vessels. The terms of the time charter-in contracts are summarized as follows:
Tuesday, July 28, 2015 at 11:00 AM Eastern Daylight Time and 5:00 PM Central European Summer Time
Participants should dial into the call 10 minutes before the scheduled time using the following numbers: 1-(866)-409-1556 (U.S.) or 1-(913)-312-1455 (International). The conference participant passcode is 3958538. 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.
Webcast URL:
Scorpio Bulkers Inc. is a provider of marine transportation of dry bulk commodities. Scorpio Bulkers Inc. currently owns 12 vessels, consisting of three Capesize, three Kamsarmax vessels and six Ultramax vessels. The Company also time charters-in 11 dry bulk vessels (consisting of one Handymax, one Ultramax, three Supramax, one Panamax, two Kamsarmax and three Post-Panamax vessels) and has contracted for 52 dry bulk vessels consisting of 22 Ultramax, 19 Kamsarmax (including one vessel held for sale) and 11 Capesize vessels (including three vessels held for sale), from shipyards in Japan, South Korea and China. Upon final delivery of all of the vessels the owned fleet is expected to have a total carrying capacity of approximately 5.4 million deadweight tonnes. Additional information about the Company is available on the Company''s website , which is not a part of this press release.
This press release describes adjusted net loss, 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.
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.
Contact:
Scorpio Bulkers Inc.
+377-9798-5715 (Monaco)
+1-646-432-1675 (New York)
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Datum: 28.07.2015 - 06:28 Uhr
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