PREMUDA SPA PREMUDA PRESS RELEASE:
SEMI ANNUAL FINANCIAL REPORT AS AT JUNE 30, 2015 APPROVED.Consolidated Group results:Loss €39.9m (1sthalf 2014: loss €12.1m)
Equity €64.7m (1sthalf 2014: €112.2m);
The BOD of Premuda Spa has today approved First Half Financial Report at June 30, 2015 edited according to valuation and consolidation criteria unchanged from those adopted upon issuing the Annual Financial Statement at December 31, 2014.
The First Half 2015 result marked a loss of about €39.9m, compared to loss of €15.4m of first half
2014.
The period results were negatively influenced by several factors, some of them non-monetary, such as:
‐ the Fleet reduction compared to the correspondent period of the past year due to dismissal of two tanker units and long idle periods for averages and shipyard works concerning three dry units;
‐ the dry bulk freights levels still very unsatisfactory, only partly limited by the commercial coverages defined in the best and still available;
‐ loss of revenues by the FPSO Four Rainbow, in lay-up throughout the first half waiting for a new project of employment;
‐ the devaluation of three units expected to be shortly sold to third parties;
‐ the exchange rate liabilities, unrealized, concerning the adjustments of end of period rates of dollar denominated loans of those Group Companies publishing their financial statements in euro currency. For these Companies - due to the current situation of default towards credit system - the 'hedge accounting' is no longer applied, which (as in a past before starting the indebtedness restructuring process) should have caused such entries to be booked directly to net equity;
‐ the interest liabilities, burdened by the high spreads applied on the last operations realized and by the indebtedness growth subsequent to the investments carried out;
‐ the overhead costs, burdened by the expenses so far sustained for the restructuring process, not yet completed.
It is to be noted that, net of non-monetary and non-operative accounting operations (asset devaluation of €18.921m and exchange differences on loans of €6.663m) the first half results would have marked loss of €14.346m, in line with the correspondent period of the previous year.
Net of third party interest (non-significant) the net consolidated equity at June 30, 2015 is €67.4m (at
June 30, 2014 was €112.2m and at December 31, 2014 was €97.9m), equal to € 0.36 per share (first half
2014 € 0.60, 2014 year end € 0.52).
Free assets amount to €376.9m No variations in the owned Fleet consistency during the first half (only one unit in time charter-in redelivered).
The Group financial situation reported here below shows net financial debts of € 378.4 m. (respectively
313.3 m. and €354.9m at the end of June and end of 2014), with cash-equivalents of €19.3m.
06.30.2015 12.31.2014 06.30.2014
- cash 71 87 141
- cash equivalents 19,181 17,969 15.352
Cash and cash equivalents 19,252 18,056 15.493- current bank debt (20,629) (15,923) (14.277)
- short-term portion of
non-current bank debt (374,305) (354,544) (314.488)
- other current financial debt (2,681) (2,471) -
Current Financial debt (397,615)(372.938)(328.765) Net current financial position (378,363)(354.882)(313.272) Non-current financial debt - - - Total net financial position (378,363)(354.882)(313.272)
The net financial exposure at the end of the first half 2015 rises by €23.5m compared to December 31,
2014 and €65.1m compared to June 30, 2014 mainly due to the effects of the counter valuation in euro of dollar-denominated loans as at period end. The variation from June 30, 2014 is also influenced by the completion (after taking delivery of Four Coal panamax in July 2014) of the investments initiated in the past aiming at renewing and strengthening of the Company Fleet
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Integrations as per CONSOB request pursuant to Italian Law 'Art.114 comma 5 D.Lgs. n. 58/98
17 luglio 2014' and 'Art.114 T.U.F.'
As per CONSOB request concerning information sharing as per above article 11, received on July 14,
2014, the following is reported:
a) the Company and Group net financial position at June 31, 2015 shows respectively net indebtedness of €88.7m and €378.4m as per following tables:
Financial Position al 06/30/2015
(€/000)
Premuda Spa Premuda Group
- cash 60 71
- cash equivalents 4.740 19.181
Cash & Cash equivalents 4.800 19.252- current bank debt (16.200) (20.629)
- short- term portion
of non current bank debt (77.304) (374.305)
- other current financial debt - (2.681)
Current Financial Debt (93.504) (397.615) Net current financial position (88.704) (378.363) Non current financial debt - - Net financial debt (88.704) (378.363)
The indebtedness is entirely represented on short terms basis owing to the situation created with the suspension of payment of loans capital quotas expiring June 30, 2013 and the relevant interests quotas starting from the 2014 expiration dates, which constitute a default in fulfillment bank financing contracts and awards banks the rights to demand for immediate exposure settlement. Though negotiations are in progress with the involved banks to reach a debts re-structuring
agreement involving the entire Group and aimed at complying, for the Italian portion, with art. 67 of Italian Financial Law. The agreement would imply new refund plans and would make the current default status null and void.
b) The Group is in default only towards the banks community and appears substantially solvent for any other commercial transactions; there are therefore no initiative whatsoever from any single creditor or any group of.
c) The relationships with correlate parties are summarized, in the table attached to the Financial Semi- Annual Report:
d) Also in view of the formal default in fulfilling the refund obligations of financing installments expired as from June 30, 2013, many of the covenants and of negative pledges contained into the current financing contracts (many of which are audited on annual basis and some even semi- annually) are actually not complied with. Particularly, the non compliance involves the 'cross default' clauses, the value-to-loan ratio (provided for in all shipping mortgage deeds) and some financial parameters referred to a minimum net equity, to ratio between the operating result and the financial liabilities, and to ratio between net equity and EBITDA. The ongoing debts re-structuring agreement will need necessarily to provide for new covenants in line the current situation of reference.
e) It is to be noted that, in view of the extreme volatility of the referred shipping markets implying frequent fluctuations and deviations hardly explicable, the Company does not disclose to market its industrial plans developed and also the annual budgets and relevant adjustments are kept confidential.
Upon starting negotiation with banks a plan was developed , with the aid of the independent advisor
Venice Shipping Logistic S.p.A. (VSL), as a basis for the financial maneuver proposal. The freights values estimated for 2014 contained into such a plan have not met with, mainly because of the dry bulk market revealed to be much lower than expected. The new plans arranged, with the aid of the mentioned Advisor , are based on more conservative assumptions, but always with grow expectations in period 2015-19. Owing to the dry-bulk market trend extremely depressed in the first half, the estimates for the period July 1, 2015 - June 30, 2016 are further reduced on the basis of the current market values for the one year Time Charters.
In such a contest, the freights finalized in first half for handy and supramax bulk carriers resulted to be in line with the plan estimates. The second half started with rates consistent with the plan
estimates for next 12 monts.
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Evolution and perspectives for 2015
After first half closing negotiations with banks were actively kept on with the aim of approving as soon as possible the Group indebtedness restructuring plan and terminates the current situation of default towards banks .
Since it was not possible to sign final agreements within the summer season and in the aim of allowing the Group Companies to carry-out the necessary assets dismissal in order to create a sufficient level of cash, during July standstill agreements (pacta de non petendo) with all the banks, with different dead- lines, up to December 31, 2015 as latest.
With such agreements the banks formalize their intents of refraining from claiming the due payments, are informed about Group Companies intent to proceed with the above dismissals and, although without taking formal commitment to stipulate an agreement, they undertake in good faith to continue
negotiating in order to achieve stipulating a final agreement within October 31, 2015, on the basis of a drafted termsheet already fixed for its basic terms.
Particularly the standstill signed with the banks financing the two Ice Class units provides for their sales in a short time. The cash deposited at these banks (about €12.5m at June 30, 2015) could be utilized exclusively upon their consent.
The chance that the final agreement could fail constitutes a significant uncertainty which might raise considerable doubts about the capacity of Premuda Group to continue in operations of basis of going concern assumption.
Premuda Directors have however maintained the reasonable persuasion that the chances to reach the agreement with banks are higher than a failure hypothesis and the consequent other scenarios therefore have drafted the Semi-annual Financial Report on going concern basis.
Among the factors contributing to lead to such opinion - partly already reported in the explanatory notes to the 2014 Financial Report - the following are highlighted:
‐ the Group is in default only towards the banks community and appears substantially solvent for any other commercial transactions; there are therefore no initiative whatsoever from any single creditor or any group of;
‐ the negotiations with the banks was never interrupted and continues even if with different modes and timing in respect of the initial expectations;
‐ after the start-up of the negotiations, by new financial resources provided by baks involved in the process, the two new panama bulk carriers were regularly acquired in operations in the course of
2014, both employed with a satisfactory long term Time Charter;
‐ all the financing banks signed - even if with different terms and condition for some of them - the mentioned letters of standstill, with the clear will of abstaining from claiming the payments of their dues related to the financing contracts, thus allowing the Group to operate as per the plans and accomplish the necessary operations to fix an adequate level of cash, waiting for the final agreement intentionally expected by October 2015; in light of the negotiations in progress it is reasonable to predict that the assets dismissals be carried out within the requested timing.
In order to execute the commitment taken with the banks upon subscribing the letters of standstill, in the beginning of August Sara Bartolini of Ernst &Young S.p.A. (which previously conducted a I.B.R. on the Group Activity) has been nominated as C.R.O. (Chief Restructuring Officer) with the task of:
‐ participate as Auditor to the B.O.D. meetings of the main Group Companies;
‐ to supervise the assets dismissal processes;
‐ to supervise the negotiations concerning possible industrial aggregations with other operators;
‐ to monitor and analyze the Fleet performances and cash flows final and budgeted.
The current task will last until restructuring agreement stipulation ex Art.67 Financial Law.
As per the Plan presented to the banks and the standstill agreements, on July 31 a Memorandum of Agreement (MOA) has been signed for the assignment to third parties of the Four Moon, with contextual bare-boat charter back until December 31,2017. The agreement still subject to some suspensive conditions provides that the ownership occurs within the first decade of November.
As to the controlled Four Vanguard Serviços de Navegaçao Lda. ( as communicated on July 30, 2015) a joint venture agreement signed with Yinson Heather Ltd., a Company fully controlled by Yinson Holdings Berhad, to form a new Company, based in Singapore, which will acquire our owned FPSO unit Four Rainbow and will manage its employment and operations.
The agreement allows Premuda Group - in the current financial situation - to maintain and hopefully to develop the presence in the off-shore business through the alliance with the Yinson Group, one of the main player in this sector.
The agreement is still subject to some sospensive conditions, mainly linked to obtain an adequate legal comfort for the counterparty on the risks connected with the current situation of Premuda Group to be released within August. Considering all above and the specific sector perspectives, the risks connected to the failed re-employment of the FPSO evidenced in the previous financial period, are today significantly reduced.
Considering the first half year results, the trend of the first part of the third quarter of the dry bulk market and the commercial coverage already available, it is reasonable to predict that, also setting aside serious unforeseen events and further needs for assets impairments which might occur according to markets trend, the final results for 2015 financial year will be negative, a situation common to the majority of shipping companies operating in the dry bulk sector.
The summary tables of the Group financial position are attached for reference. It is pointed out that there are no observations by the Board of Auditors.
The Auditing Company PricewaterhouseCoopers S.p.A. has substantially completed the limited accounting audit and they report will be published according to law.
Pursuant to Article 154 bis, paragraph 2, of Testo Unico della Finanza, the person(s) responsible for drafting the Company's Financial Statements hereby declare that accounting information contained in this release corresponds to documentary evidence, accounting entries and official bookkeeping records.
The Semiannual Report, at 30 June, 2015 will be available on our Company web site, (www.premuda.net) pursuant to law requirements and a hard copy can be requested from:
Head Office - Corporate Dpt. - Via C.R. Ceccardi 4/28 - 16121 Genova (ph. +39 (0)10 54441 - fax
+39 (0)10 5531201 - email: general.counsel@premuda.net).
Investor Relations: Dr. Marco Tassara/Dr. Elena Bertone tel +39-010-54441 email:mngmt.secretary-ge@premuda.net
Web site:www.premuda.net
Aug 06, 2015
PREMUDA GROUP CONDENSED CONSOLIDATED BALANCE SHEET(Euro/000)
ASSETS 30.06.201531.12.201430.06.2014 FIXED ASSETS:Tangible fixed assets 376,888 442,822 414,764 of which: Vessels 375,280 441,203 397,288 of which: Vessels under construction - - 15,894
Participations 22,908 21,019 19,000
Other fixed assets 170 165 167
TOTAL FIXED ASSETS 399,966 464,006 433,931 CURRENT ASSETS:Inventories, credits and other current assets 16,153 18,802 27,295
Assets to be sold: vessels 57,351 - - Cash and other equivalents 19,252 18,056 15,493
TOTAL CURRENT ASSETS 92,756 36,858 42,788 TOTAL ASSETS 492,722 500,864 476,719 LIABILITIES AND SHAREHOLDERS' EQUITY30.06.2015 31.12.2014 30.06.2014
SHAREHOLDERS' EQUITYShare capital 93,891 93,891 93,891
Reserved and retained profit 13,416 45,840 33,695
Profit/(Loss) of the year (39,930) (41,796) (15,403)
GROUP SHAREHOLDERS' EQUITY 67,377 97,935 112,183 MINORITY INTERESTCapital and reserves 70 64 64
Profit/(Loss) of the year (4) 6 (10)
TOTAL SHAREHOLDERS' EQUITY 67,443 98,005 112,237 LONG-TERM LIABILITIESProvisions and other long-term liabilities 13,683 13,569 15,795
TOTAL LONG-TERM LIABILITIES 13,683 13,569 15,795 CURRENT LIABILITIESShort-term bank debts 394,934 370,467 328,765
Other current liabilities 16,662 18,823 19,922
TOTAL CURRENT LIABILITIES 411,596 389,290 348,687 TOTAL LIABILITIES 425,279 402,859 364,482 TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY 492,722 500,864 476,719 PREMUDA GROUP CONDENSED CONSOLIDATED INCOME STATEMENT(Euro/000)
Net revenues | Jan/Jun 2015 31,702 | Year 2014 68,367 | Jan/Jun 2014 33,537 |
Voyage costs | (1,782) | (6,121) | (2,058) |
Time Charter revenues | 29,920 | 62,246 | 31,479 |
Charter hire and running costs | (19,409) | (36,587) | (17,655) |
Fleet Margin | 10,511 | 25,659 | 13,824 |
Profit on vessel sale | - | 2,192 | 1,665 |
Admin, expenses and other income/costs | (7,022) | (26,341) | (13,176) |
Depreciation | (12,510) | (23,022) | (11,213) |
Impairment of assets | (18,921) | - | - |
Operating profit/(loss) | (27,942) | (21,512) | (8,900) |
Financial items | (12,048) | (19,243) | (5,069) |
Profit/(loss) from associated companies | 266 | (768) | (1,295) |
Profit/(loss) before tax | (39,724) | (41,523) | (15,264) |
Tax on profit | (210) | (267) | (149) |
Net profit/(loss) | (39,934) | (41,790) | (15,413) |
Minority interest | (4) | 6 | (10) |
Group's net profit/(loss) | (39,930) | (41,796) | (15,403) |
Group's Net profit/(loss) per share (euro) | (0.213) | (0.223) | (0.082) |
N.B. Net profit per share and Diluted net profit per share are equivalent
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PREMUDA GROUP CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (*)Jan/Jun 2015 Year 2014 Jan/Jun 2014
Group's net profit/(loss) | (39,930) | (41,796) | (15,403) |
Conversion exchange differences | 9,337 | 13,800 | 1,645 |
Total net profit/(loss) of the period | (30,593) | (27,996) | (13,758) |
(*) As per amendments at IAS 1 in force starting Year 2009 - no effects on third parties interests
PREMUDA GROUP CONDENSED CONSOLIDATED CASH FLOW STATEMENT(Euro/000)
Jan /Jun 2015 Year 2014 Jan/Jun 2014
A B | CASH POSITION AT YEAR START CASH FLOW | 18,056 | 14,455 | 14,455 |
FROM OPERATING ACTIVITIES | (666) | 1,298 | 4,170 | |
C | CASH FLOW FROM INVESTING ACTIVITIES | (537) | (24,082) | (17,718) |
D | CASH FLOW FROM FINANCING ACTIVITIES | 2,399 | 26,385 | 14,586 |
E | CASH FLOW FOR THE PERIOD (B + C + D) | 1,196 | 3,601 | 1,038 |
F | CASH POSITION AT THE END OF THE PERIOD (A + E) | 19,252 | 18,056 | 15,493 |
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