Rickmers – BT

Impairment charge hits Rickmers’ Q4 earnings

RICKMERS Maritime Trust has posted a 23 per cent fall in net profit for the fourth quarter to US$7.2 million, due to US$3.5 million in provisions for impairment of a vessel. But the shipping trust recommended a distribution per unit (DPU) of 2.25 US cents, the same as for the third quarter and 5 per higher than the 2.14 US cents a year ago.

Net profit for the year came to US$34.4 million, up from US$20.6 million for 2007. Rickmers was formed in March 2007 but commenced activities only upon listing on May 4, 2007.

Fourth-quarter charter revenue rose 76 per cent to US$29.6 million from US$16.8 million a year ago. For the full-year, charter revenue leaped to US$102.1 million from US$37.6 million (for the portion of 2007 that the trust was operating) as Rickmers rapidly added vessels to its fleet in 2008.

Fleet size rose to 13 vessels at end-2008 from nine at end-2007. In FY2008, Rickmers accepted delivery of a 3,450 twenty-foot equivalent unit (TEU) vessel which has been leased to Evergreen unit Italia Marittima on an eight-year fixed-rate charter and three 4,250 TEU ships chartered to Mitsui OSK Lines on 10-year fixed-rate charters.

DPU for 2008 came to 8.89 US cents, representing an average payout ratio of 73 per cent. However, CEO of trustee-manager Rickmers Trust Management, Thomas Preben Hansen, was unwilling to provide further DPU guidance in the current climate even though he believed there is ‘no reason to cut DPU guidance’.

CFO Quah Ban Huat said: ‘In this climate, we took a prudent approach of providing for vessel impairment of US$3.5 million in the fourth quarter of 2008 due to the risk that the charterer of one of our vessels may exercise an early termination option which could result in the redelivery of the vessel from February 2010 onwards.

‘This provision will not have any impact on our cash flow and distribution.’