Thursday, May 07, 2009
Thursday, 07 May 2009
Eagle Bulk Shipping Inc. yesterday announced its results for the first quarter of 2009. Sophocles N. Zoullas, Chairman and Chief Executive Officer, commented, ``Eagle Bulk's first quarter results highlight continued profitability, steady cash flow and solid operating performance amid ongoing challenges in the dry bulk shipping market. Our growth in revenues , EBITDA and net income resulted from the Company's well-executed 30% fleet growth, quarter-on-quarter, as well as our strong charter relationships. Management's conservative chartering strategy and the relative stability of the Supramax asset class has proven to be successful in today's market conditions. Going forward, our contracted coverage at above-market rates combined with our open capacity positions Eagle Bulk very well to capture opportunities as market conditions improve.''
Results of Operations for the three month periods ended March 31, 2009 and 2008
For the first quarter of 2009, the Company reported net income of $17,236,781 or $0.37 per share, based on a weighted average of 47,031,300 diluted shares outstanding. In the comparable first quarter of 2008, the Company reported net income of $14,345,810 or $0.31 per share, based on a weighted average of 46,925,494 diluted shares outstanding.
All of the Company's revenues were earned from time charters. Gross time charter revenues in the quarter ended March 31, 2009 were $58,621,700, an increase of 52% from $38,610,921 recorded in the comparable quarter in 2008, primarily due to the operation of a larger fleet and higher daily time charter rates. Gross revenues recorded in the 2009 quarter include an amount of $649,731 relating to the non-cash amortization of fair value below contract value of time charters acquired. Brokerage commissions incurred on revenues earned in the first quarters of 2009 and 2008 were $2,644,034 and $1,924,905 respectively. Net revenues during the quarter ended March 31, 2009 increased 53% to $55,977,666 from $36,686,016 in the comparable quarter in 2008.
Total operating expenses were $32,265,141 in the quarter ended March 31, 2009 compared to $20,376,459 recorded in the first quarter of 2008. The increase was due to the operation of a larger fleet resulting in higher vessel operating expenses, vessel depreciation and amortization expenses, and general and administrative expenses which includes cash and non-cash compensation to officers and staff, and administrative costs associated with operating a larger fleet and managing the newbuilding program.
EBITDA, adjusted for exceptional items under the terms of the Company's credit agreement, increased by 35% to $37,260,567 for the first quarter of 2009, from $27,547,805 for the first quarter of 2008. (Please see below for a reconciliation of EBITDA to net income).
During the first quarter of 2009, the Company took delivery of two 56,000 deadweight ton Supramax vessels which were built in Japan under newbuilding contracts signed in 2007. The CRESTED EAGLE was delivered into the fleet in January 2009, and the STELLAR EAGLE entered the fleet in March 2009. Both vessels were immediately employed on one-year time charters. Since the commencement of deliveries of its newbuilding vessels in 2008, the Company has taken delivery of five vessels, two built in China and three in Japan. The Company's newbuilding program includes additional 22 vessels, 20 in China and 2 in Japan. These vessels are expected to be constructed and delivered into our fleet through 2011 upon which the Company's total fleet will consist of 47 vessels with a combined carrying capacity of 2.55 million deadweight tons. As of March 31, 2009, the Company has recorded advances of $381,815,260 towards the construction cost of these 22 vessels. These costs include capitalized interest on debt drawn for progress payments, insurance, legal, and technical supervision costs. (Please see table below for anticipated delivery dates on the newbuilding fleet).
Liquidity and Capital Resources
Net cash provided by operating activities during the three month periods ended March 31, 2009 and 2008 was $43,024,179 and $26,454,362, respectively. The increase was primarily due to cash generated from the operation of the fleet for 2,138 days in the three month period ended March 31, 2009 compared to 1,638 days during the same period in 2008, and $13,312,978 relating to deferred revenue payment from a charterer.
Net cash used in investing activities during the three month period ended March 31, 2009, was $44,271,329 compared to $13,399,474 during the corresponding three month period ended March 31, 2008. Investing activities during the three month period ended March 31, 2009 related primarily to making progress payments for the newbuilding vessels and incurring related vessel construction expenses.
Net cash provided by financing activities during the three month period ended March 31, 2009 was $10,935,046, compared to net cash used by financing activities of $17,445,157 during the corresponding three month period ended March 31, 2008. Financing activities during the three month period ended March 31, 2009 primarily involved borrowings of $12,875,000 from our revolving credit facility. Financing activities during the three month period ended March 31, 2008 primarily involved borrowings of $6,630,000 and payment of $23,378,577 in dividends.
As of March 31, 2009, the cash balance was $18,896,758. In addition, $12,500,000 in cash deposits are maintained with the Company's lender for loan compliance purposes and this amount is recorded in Restricted Cash on the balance sheet as of March 31, 2009. Also recorded in Restricted Cash is an amount of $276,056 which is collateralizing a letter of credit relating to the Company's office lease.
At March 31, 2009, the Company had outstanding debt of $802,476,403 borrowed under its $1.35 billion revolving credit facility.
Source: Eagle Bulk Shipping