Half-year result 2010
J. Lauritzen A/S (JL) enjoyed a good start to the year and JL’s share of results totalled USD 99.6m for the first six months of the year compared to USD 1.5m for the first half-year in 2009.
The result for the period was better than expected primarily due to improved earnings from Lauritzen Bulkers’ handysize bulk carrier operations and non-recurring income from counterparty settlements.
Return on invested capital (ROIC) was 13.2% compared to 1.6% in the same period in 2009. Excluding instalments on vessels under construction return on invested capital amounted to 17.5% compared to 3.4% in the first half of 2009.
Cash and securities amounted to USD 282m at the end of June 2010 up from USD 218m at year-end 2009.
Average invested capital amounted to USD 1,924m compared to USD 1,318m in the first half of 2009. The increase was in line with plans for fleet expansion and renewal.
Main events during the first six months:
- JL took delivery of four handysize bulk carriers and two MR product tankers.
- Seven long-term time-chartered bulk carriers (one handysize, five handymax and one capesize) were also added to the fleet.
- An order for two handysize bulk carrier newbuildings for delivery in 2012 was placed with Jiangmen Nanyang Ship Engineering in China together with Dansk Rederi A/S, a close partner of Lauritzen Bulkers.
- A loan agreement backed by Nippon Export and Investment Insurance (NEXI), one of two Japanese export credit agencies was signed. The agreement was the first of its kind with a company located in an OECD country for which NEXI provides its cover without the cooperation of Japan Bank for International Cooperation.
- An unsecured bond issue was successfully completed for listing on the Oslo Børs (the Oslo Stock Exchange).
Demand for seaborne transportation is expected to remain fairly strong in the second half of 2010. However, market conditions are expected to be affected by a significant delivery schedule of new tonnage, in particular of bulk carriers and product tankers.
JL’s share of the result for the full year 2010 is expected to be USD 120-125m subject to possible gains and/or losses from the sale of vessels.