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Stable Results At Rickmers Maritime

Rickmers Mainboard-listed Rickmers Maritime (SGX: B1ZU) announced the financial performance of the Trust for the third quarter and nine months ended 30 September 2013 “3Q2013” and “9M2013” respectively after market closed for the day.

Rickmers Maritime, as its name suggests, is a business trust formed to own and operate containerships under long-term, fixed-rate time charters to leading container liner companies.

Currently, it has a portfolio of 16 modern and high-quality containerships chartered out to leading container liner companies. Its aim is to offer first class services to its customers and generate stable and growing cash flows for its unit-holders, akin to a Real Estate Investment Trust (REIT).

Rickmers Maritime charter revenue rose a paltry 1% from US$36.32 million to US$36.60 million during the period. However, net profit surged 59% year-on-year to US$13.1 million; this was mainly attributed to the significantly lower finance expenses as a result of accelerated repayment of bank borrowings as well as expiry of four interest rate swap contracts.

Highlights

Rickmers Maritime achieved a vessel utilisation rate of 99.9% and the fleet of modern container vessels is fully employed for the remaining period of 2013 and will be 83% employed in 2014.

Another focus of the company is to cut down on its debt load. Over the past few years, the gearing for Rickmers has fallen from 67% to 49%. Rickmers Maritime successfully deleveraged its balance sheet further during the reporting quarter, repaying US$20.5 million of secured bank loans, thereby lowering its outstanding secured bank loans to US$456.1 million. The Trust’s cash balance stood at US$57.8 million as at 30 September 2013.

Mr Thomas Preben Hansen, the Chief Executive Officer of RTM, commented, “Given hopes of an expected beginning of recovery in the container shipping industry next year, we will continue strengthening our balance sheet, positioning us to capitalise on growth opportunities as and when they arise. Until then, we remain in a resilient position, with our defensive fixed-rate charter agreements providing us with stable and positive cash flows.”

Reporting US$5.1 million to be distributed to unit-holders for 3Q2013, the Trust maintained a distribution per unit of 0.6 US cent. The declared distribution will be paid to unit-holders on 27 November 2013. On an annualised basis, the DPU works out to a yield of 10.27% based on the closing price of S$0.29 and it is trading at a low P/E ratio of 4.41.

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The information provided is for general information purposes only and is not intended to be personalised investment or financial advice.   Motley Fool Singapore contributor James Yeo doesn’t own shares in any of the companies mentioned.