Thoresen reported Q4 profit of Bt1.159.16 billion, an increase of 34.50% from the same period last year, due to strong freight and day rates in the dry bulk shipping and offshore services businesses, according to its top executive. The Dry Bulk Shipping Group has a visibly positive outlook in 2008, as it already placed 21.01% of available capacity on time charters for 2008.
M.L. Chandchutha Chandratat, Managing Director of Thoresen Thai Agencies Public Company Limited, or TTA, said that the consolidated net profit for the three-month period that ended on 30 September 2007 (the "2007 Fourth Quarter") was Baht 1,159.16 million, which included an exchange gain of Baht 78.90 million. During the three-month period that ended on 30 September 2006 (the "2006 Fourth Quarter"), TTA recorded a consolidated net profit of Baht 861.83 million, which included an exchange gain of Baht 160.82 million. Net profit increased 34.50% on a quarter-on-quarter basis.
The increase in the consolidated net profit was primarily due to high utilisation and strong freight or day rates in the dry bulk shipping and offshore services businesses, which were offset by a stronger Thai Baht currency (resulting in lower reported Thai Baht revenues), lower than expected contributions in the drilling business, and an accounting policy change related to variable compensation.
The Dry Bulk Shipping Group recorded a consolidated net profit of Baht 1,143.86 million, excluding exchange gains. The average TC rate, including net contributions from chartered-in tonnage, increased 9.20% from US$ 16,550 per vessel per day in the three-month period that ended on 30 June 2007 (the "2007 Third Quarter") to US$ 18,082 per vessel per day in the 2007 Fourth Quarter.
"We believe that strong demand from our core markets of China, Southeast Asia, India, and the Middle East will continue into 2008 and result in strong freight rates for the Dry Bulk Shipping Group. 21.01% of our available capacity has been placed on time charters for the 2008 financial year, which will provide earnings visibility. Without the variable compensation reserve, the Dry Bulk Shipping Group's net profits increased 10.50% from the 2007 Third Quarter to the 2007 Fourth Quarter." M.L. Chandchutha said.
The Shipping Services Group made a net loss contribution (after deducting minority interests) of Baht 3.50 million, excluding exchange losses, to TTA's financial results. Thoresen Shipping FZE made the highest net profit contributions, followed by Fearnleys (Thailand) Ltd., which recorded higher income and profits due to the increasing number of vessel calls and cargo fixing. Excluding the variable compensation reserve, the Shipping Services Group's 2007 Fourth Quarter net profit was 2.03% higher than 2007 Third Quarter net profit.
For the year that ended on 30 September 2007 (full-year report), the Offshore Services Group recorded revenues of Baht 4,039.97 million, an increase of 42.50% from the 2006 financial year, and made a net profit contribution to TTA's 2007 financial results of Baht 453.60 million, an increase of 16.20% from the 2006 financial year.
The drilling segment generated 30.0% and 16.9% of the Offshore Services Group's total revenues and operating profits, respectively.
The assets in the subsea engineering segment had a 77% utilisation rate during the year, and generated 69.4% and 98.6% of the Offshore Services Group's revenues and operating profits, respectively. This strong performance was driven by rising day rates throughout the year, as well as higher utilisation across our fleet. These high utilisation rates are continuing in the first quarter of 2008.
"The fundamentals of the Offshore Services Group remain strong and should bode well for 2008. Excluding foreign exchange gains and minority interests, the 2007 Fourth Quarter marked another strong quarter of consolidated net profits for TTA, which demonstrates the benefits of our ongoing diversification strategy and the strength of both the dry bulk shipping and offshore services markets." M.L. Chandchutha said.