Rickmers – BT

Rickmers cuts Q2 DPU to US0.6cents to conserve cash

RICKMERS Maritime Trust (RMT), the last of the shipping trusts to report second-quarter results, has reported the biggest cut of all in distribution per unit (DPU) – a 73 per cent plunge to just 0.6 of a US cent. First Ship Lease Trust (FSLT) cut DPU to 2.45 US cents from 2.8 US cents previously while at Pacific Shipping Trust (PST), the drop was to 0.99 US cent from 1.09 US cents.

Both also held out the possibility of further cuts from the third quarter, FSLT to 1.5 US cents and PST to 70 per cent of distributable income from 90 per cent currently. RMT declined to give a DPU guidance for the remaining quarters. All three trusts cited cash conservation amid uncertain times as reasons to cut distribution. RMT, however, did continue to chalk up increases in charter revenue, operating cash flows as well as income available for distribution.

Q2 revenue rose 59 per cent to US$37.6 million from US$23.7 million for Q208 due to expansion in operating fleet to 16 vessels compared with 11 a year ago. For the first half, charter revenue rose by just over half to US$70.1 million compared to US$46 million for H108. Operating cash flow also rose 56 per cent to US$28.7 million for the second quarter and 58 per cent to US$55.9 million for the first half.

Fleet utilisation remained high at 99.8 per cent with only 5.5 off-hire days out of a total of 2,718 vessel ownership days.

Q2 income available for distribution was 42 per cent higher at US$19.6 million. However, net profit fell 43 per cent to US$5.2 million due to provision of US$7.5 million for asset impairment, which RMT provided for after taking into account the potential early re-delivery of the Maersk Djibouti in February and subsequent lower charter rate in 2010 given the current weak container shipping market.

Looking ahead, negotiating a waiver of value-to-loan (VTL) covenants and the refinancing of RMT’s US$130 million top-up loan facility maturing in April 2010 remain challenges, management warned. RMT also has the spectre of unsecured funding for its four 13,100 TEU ships, due for delivery in the latter part of 2010, hanging over it. Management is currently in discussions with various stakeholders to resolve the matter, RMT said, adding that a financial adviser and investment bankers have been appointed.