Lauritzen posts 130.7m dollar profit
J. Lauritzen posted a130.7 million dollar profit in 2010, nearly twice as much as the 74.6 million dollar profit last year. EBITDA climbed from 134.9 million dollar in 2009 to 252.2 million dollar in 2010.
“In a year characterized by global macro economic uncertainty and the sustained risk of overcapacity in major shipping markets, JL posted a strong result in 2010”, says Torben Janholt, President and CEO of J. Lauritzen. . Results were better than expected and satisfactory considering the global financial situation
The improvement was primarily related to enhanced market conditions for bulk carriers, increased capacity due to newbuildings delivered to the fleet and profits from two offshore units, which both had their first full year of operation in 2010.
Return on invested capital was 10.2% compared to 6.1% in 2009. Return on equity was 11.1% compared to 6.9% in 2009. The solvency ratio was 52% and thus unchanged compared to 2009.
Total invested capital was USD 2,049m at year-end 2010, up from USD 1,814m at year-end 2009. At year-end 2010, JL’s the asset base had increased by a factor of more than six since 2004, when the current expansion programme was initiated.
Management’s outlook for 2011:
The global economy is expected to continue to expand in 2011, albeit slightly less briskly than in 2010. This implies further growth in seaborne trade in 2011, although most likely at a moderate pace. Output of new tonnage is expected to be at approximately the same level as in 2010.
Dry bulk markets are expected to experience strong volatility with average rates below those of 2010 and with an increased pressure on particularly larger vessels. MR product tankers are setfor a weak start but improvements during the year are on the cards. Smaller gas carriers are expected to deliver fairly healthy rates. The market for offshore service units is in the process of adjusting to the shock of the Gulf of Mexico incident in April 2010, and more business is expected as the outlook for oil prices remains to be quite high.
In early 2011, 55% of total forecast revenues for 2011 are secured by contracts.
Net results for 2011 are expected to be significantly down on 2010 due to one-offs included in the 2010 results, including settlements and the reversal of write-downs (USD 73.8m in total), changed employment pattern for the Accommodation and Support Vessel, Dan Swift, lower earnings from the Capesize bulk carrier segment and counterparty defaults in early 2011. In addition, recent developments in the Middle East and North Africa as well as Japan may impact upon world economic growth and international seaborne trade. Main events:
• JL took delivery of ten newbuildings, of which six bulk carriers, three MR product tankers and one gas carrier. In addition, six bulk carrier newbuildings were taken on long-term time-charter.
• Due to the significant fleet renewal and expansion efforts in recent years, JL owns a modern, efficient fleet of bulk carriers with an average age of 1.5 years, gas carriers 9.6 years, product tankers 2.3 years, and offshore support vessels 6.0 years.
• JL broadened its sources of financing to also include Export Credit Agency supported financing and corporate bonds.
• Lauritzen Tankers joined the newly established product tanker pool led by Hafnia Management as a partner.
• Lauritzen Offshore’s Accommodation and Support Vessel, Dan Swift successfully concluded its first contract with Statoil offshore Brazil and the vessel is currently employed for Shell offshore Nigeria.
• Total vessel days increased to more than 54,300 in 2010, up 6% on 2009, for an average fleet of 149 vessels (140 vessels in 2009).
Source: J. Lauritzen / maritimedanmark.dk
