PIRAEUS, GREECE -- (Marketwire) -- 03/03/09 -- Omega Navigation Enterprises, Inc.
(NASDAQ: ONAV) (SGX: ONAV50), a provider of global marine transportation
services focusing on product tankers, announced today its financial and
operational results for the fourth quarter and year ended December 31,
2008.
The Company had previously announced the declaration of its quarterly base
dividend with respect to the fourth quarter of 2008 of $0.50 per share
payable on March 9, 2009 to stockholders of record as of February 24, 2009.
Fourth Quarter 2008 Results
For the quarter ended December 31, 2008, Omega Navigation reported total
revenues of $20.1 million and Net Income of $5.8 million, or $0.38 per
basic share, excluding a loss on its interest rate derivative instruments,
a gain on warrants revaluation and incentive compensation grants expense.
Including these items the Company reported a Net Loss of $4.4 million or
$0.29 per basic share. EBITDA for the fourth quarter of 2008 was $17.0
million. Please see below for a reconciliation of EBITDA to Cash from
Operating Activities.
Operating Income included revenue of $2.2 million primarily attributable to
profit sharing on charters of the vessels. The fourth quarter spot market
was very strong for product tankers. The $2.2 million booked in the fourth
quarter represented the highest amount of profit sharing booked to income
since the inception of the charters that include a profit sharing
provision.
The Company owned and operated an average of 8 vessels, all product
carriers, during the fourth quarter of 2008, the same number as in the
fourth quarter of 2007. The Omega Lady Miriam completed its scheduled
drydock on September 30, 2008 and went back on hire to ST Shipping at that
time. Excluding profit sharing, the Panamax product carriers in our fleet
earned an average time-charter equivalent rate of $24,949 per day per
vessel during the fourth quarter of 2008, versus $25,047 per day per vessel
during the fourth quarter of 2007. The Handymax product tankers in our
fleet earned an average time-charter equivalent rate of $20,798 per vessel
per day during the fourth quarter of 2008, versus $20,750 per day per
vessel during the fourth quarter of 2007.
Since the inception of our product tankers' charters through the end of the
fourth quarter of 2008, the profit sharing element of those charters that
include such a provision amounted to approximately $13.6 million. The
Company has already received $10.9 million of cash and has recorded profit
share revenues of $10.8 million, and currently expects to record an
additional $2.8 million in quarters to follow for voyages performed through
the fourth quarter of 2008. The table below presents the amount of profit
share revenues recorded per quarter.
Quarter Amount of profit share
revenues recorded per
quarter
---------------- ----------------------
1st Quarter 2007 $ 1.1 million
2nd Quarter 2007 $ 1.0 million
3rd Quarter 2007 $ 1.3 million
4th Quarter 2007 $ 0.6 million
1st Quarter 2008 $ 1.2 million
2nd Quarter 2008 $ 1.6 million
3rd Quarter 2008 $ 1.8 million
4th Quarter 2008 $ 2.2 million
Total $ 10.8 million
Operating expenses for our MR product tankers averaged $5,110 per day per
vessel in the fourth quarter of 2008, versus $4,048 per day per vessel in
the fourth quarter of 2007. Our Panamax product tankers averaged operating
expenses of $5,564 per day per vessel in the fourth quarter of 2008, versus
$4,582 per day per vessel in the fourth quarter of 2007. The increase of
the daily operating expenses of the vessels relates mainly to an increase
in crew wages for the entire fleet.
Twelve Months 2008 Results
For the year ended December 31, 2008, Omega Navigation reported total
revenues of $77.7 million and Net Income of $22.7 million, or $1.50 per
basic share excluding a loss on its interest rate derivative instruments, a
gain on warrants revaluation and incentive compensation grants expense.
Including these items Net Income was $11.0 million or $0.72 per basic
share. EBITDA for the year 2008 was $57.1 million. Please see below for a
reconciliation of EBITDA to Cash from Operating Activities.
Net Income included $6.8 million of revenues primarily arising from profit
sharing on charters of the vessels Omega Lady Miriam, Omega Lady Sarah,
Omega Theodore and Omega Emmanuel. The size of the profit sharing
contribution was evidence of the strong spot market for product tankers
throughout the year.
The Company owned and operated an average of 8 vessels, all product
carriers, during the year 2008, compared to an average of 7.4 product
carriers during the year 2007. Excluding profit sharing, the Panamax
product carriers in our fleet earned an average time-charter equivalent
rate of $25,027 per day per vessel during the year 2008, versus $25,013 per
day per vessel during the year 2007. The Handymax product tankers in our
fleet earned an average time-charter equivalent rate of $20,772 per vessel
per day during the year 2008, versus $20,786 per day per vessel during the
year of 2007.
Operating expenses for our Panamax product tankers averaged $5,406 per day
per vessel in the twelve months of 2008, versus $4,572 per day per vessel,
excluding any initial outfitting and pre-delivery expenses, in the twelve
months of 2007. Our MR product tankers averaged operating expenses of
$4,938 per day per vessel in the twelve months of 2008, versus $4,463 per
day per vessel in the twelve months of 2007. The increase of the daily
operating expenses of our Panamax product tankers as well as our MR product
tankers relates mainly to an increase in crew wages and maintenance cost
for Omega Lady Miriam which was incurred during her scheduled drydocking in
the third quarter 2008.
Fleet Developments
Current Fleet
Omega Navigation's current fleet includes eight double hull product tankers
with an aggregate carrying capacity of 512,358 dwt. All of the Company's
product tankers are employed under time charters to established charterers
including Norden, ST Shipping (Glencore) and Torm. Six of the eight product
tankers have profit sharing arrangements that enable the Company to share
in the charter market's upside potential.
The Company recently announced new charters on the Omega Lady Miriam and
Omega Lady Sarah that provide for contracted time charter coverage on these
vessels up to 2012. The following table illustrates the current contract
expirations and renewals:
Vessel Charter Profit Latest Renewal
Rate Sharing Charter
Expiration
---------------------------------------------------------------------------
Omega Queen $ 26,500 No Jun-09
Omega King $ 26,500 No Jul-09
Omega Lady Sarah $ 24,000 Yes Q3-12 New charter commences
2/3Q '09 at 25,500/day
plus 50/50 profit
sharing
Omega Lady Miriam $ 24,000 Yes Q4-12 New charter commences
3/4Q '09 at 25,500/day
plus 50/50 profit
sharing
Omega Prince $ 21,000 Yes Jul-09
Omega Princess $ 21,000 Yes Aug-09
Omega Emmanuel $ 25,500 Yes Apr-10
Omega Theodore $ 25,500 Yes May-10
Management Commentary:
George Kassiotis, President and Chief Executive Officer of Omega
Navigation, commented: "We are pleased to have concluded our eleventh
consecutive quarter with strong operating income, since our IPO in April
2006. We attribute our strong operating income to our strategy of acquiring
high quality modern vessels and seeking predictable and stable cash flows
through the term employment of our vessels. In addition, the fact that the
charters of six of our eight product tankers have a profit sharing
provision has enabled us to participate in any upside of the charter market
and thereby maximize our profitability and the return for our shareholders.
The profit sharing agreements in 2008 have allowed the Company to enjoy
particularly strong earnings, with the product tanker market remaining
quite strong throughout 2008.
"We continue to return strong operating results even in this most
challenging economic environment. Based on our current charter rates and
the continued performance of each of our charterers, we believe that we are
well positioned to continue to show profitable operating results despite
this economic climate. While we have seen some evidence of spot and term
rates weakening in the first quarter of 2009, our profit sharing agreements
continue to generate revenues above the base rates and thereby adding to
our profitability.
"All of the vessels in our current fleet are under three year time charters
with established charterers pursuant to which we had covered 100% of our
operating days for 2008 and we have contracted 79% for 2009. The charters
on the Panamax Ice Class vessels delivered to us in March and April of
2007, respectively, extend to 2010. In addition, the Company recently
announced new charters on the Omega Lady Miriam and Omega Lady Sarah which
provide for contracted time charter coverage on these vessels until mid
2012.
"We would like to reiterate that we are continuing to pursue a strategy of
prudent growth, gradually expanding our fleet and our revenue and profit
generation potential.
"Finally, we recently announced the declaration of our eleventh consecutive
quarterly base dividend of $0.50 per common share with respect to the
fourth quarter of 2008."
Quarterly Dividend
On February 13, 2009 the Company announced its eleventh consecutive
quarterly base dividend since it went public, of $0.50 per common share,
payable on March 9, 2009 to shareholders of record as of February 24, 2009.
The base dividend will be paid in cash to all shareholders, including One
Holdings, holder of the Company's Class B subordinated shares. One
Holdings has notified the Company that it will not elect to receive the
base dividend in additional Class B subordinated shares.
Gregory McGrath, Chief Financial Officer of Omega Navigation, commented,
"We have now paid or declared on schedule eleven consecutive quarterly
dividends since going public in the amount of $0.50 per common share,
aggregating $5.50 per common share or a total amount in excess of $80
million returned to shareholders in the form of dividends.
"As of December 31, 2008 we are fully compliant with all our loan
covenants.
