Thoresen Thai Agencies Public Company Limited ("TTA") achieved a net profit of Baht 2,581.71 million for the first quarter of the 2008 financial year. High utilisation and strong freight or day rates in dry bulk shipping and offshore services businesses drove profits.
M.L. Chandchutha Chandratat, Managing Director of TTA, revealed that, "Our 2008 First Quarter net profit was the highest ever reported in TTA's history. If excluding unrealised exchange gains, our net profit increased 187.70% from the 2007 First Quarter.
The net profit increase resulted from high utilisation and strong freight or day rates in the dry bulk shipping and offshore services businesses and gains on the sale of one dry bulk vessel, which were offset by a stronger Thai Baht currency (resulting in lower reported Thai Baht revenues) and lower than expected contributions in the drilling business.
The average time charter equivalent ("TC") rate, including net contributions from chartered-in tonnage, increased 43.47% from US$ 18,054 per vessel per day in the 2007 Fourth Quarter to US$ 25,902 per vessel per day in the 2008 First Quarter. Mermaid Maritime Public Company Limited ("Mermaid") made a net profit contribution to TTA's 2008 First Quarter of Baht 88.63 million, an increase of 400.14% from the 2007 Fourth Quarter, while the Shipping Services Group made a net profit contribution (after deducting minority interests) of Baht 53.67 million, excluding exchange losses, an increase of 1,633.42% from the 2007 Fourth Quarter to TTA's financial results".
The Dry Bulk Shipping Group has placed 22.36% of TTA's available capacity on period time charters through 2008 and 5.77% of TTA's available capacity on period time charters for the next financial year, which will provide earnings visibility into next year.
The assets in Mermaid's subsea engineering segment had an 86% utilisation rate during the 2008 First Quarter. The Mermaid Commander and Binh Minh, the two subsea-engineering vessels of Mermaid, have been contracted by BP Indonesia for services in the region. Mermaid Commander has also been awarded CUEL's 2008 inspection, repair, and maintenance service contract. These commitments will see this vessel fully utilised throughout 2008, while other vessels are presently operating on various contracts maintaining a high utilisation rate.
"The dry bulk shipping market reached new highs in the 2008 First Quarter. The Baltic Supramax Index (as calculated by the Baltic Exchange Limited) exceeded US$ 72,000 per day during the 2008 First Quarter and continued its high levels through the current quarter (US$ 43,560 per day as of 13 February 2008). Average daily earnings on a Supramax vessel were US$ 47,722 per day for the 2008 First Quarter. The Baltic Dry Index exceeded 11,039 on 13 November 2007, which is an all-time high".
As for Mermaid, the market sentiment for tender rigs remains strong as confirmed by recent fixtures in the region of US$ 115,000 to US$ 125,000 per day. As tender rigs primarily do production drilling, the contract duration for tender rigs is usually longer term, and the contracts are entered into well in advance of commencement. We believe that the outlook is favorable and expect that the market will continue to offer good opportunities to facilitate further organic growth". M.L. Chandchutha said.
TTA is a leader in the dry bulk shipping industry, providing liner and charter services, and is a major player in Southeast Asian offshore services through Mermaid. TTA is amongst the top 50 companies listed on the Stock Exchange of Thailand with high liquidity.