Rickmers – BT

Rickmers Q1 DPU up 5% at 0.60 US cent

Trust expects to continue generating steady cash flow

ON the back of a stable topline, Rickmers Maritime has declared a first-quarter distribution per unit (DPU) of 0.60 US cent, up 5 per cent from 0.57 US cent a year earlier.

The distribution was also equal to the preceding fourth-quarter’s DPU.

Net profit for the three months ended March 31, 2011, increased 72 per cent from US$5.43 million in Q1 2010 to US$9.33 million, helped by unrealised gains on cash flow hedges from four interest rate swaps and lower vessel operating expenses.

But cash flow available for distribution (before payment to debt capital providers) slipped from US$27.19 million to US$24.94 million due to movement in working capital and dry-dock reserves.

Rickmers Maritime’s charter revenue for the quarter dipped 3 per cent to S$35.86 million from US$37.16 million a year earlier. This was attributed to a smaller contribution from Kaethe C Rickmers, a 5,060 TEU container ship which earned a daily charter rate of US$8,288 up to March 24.

Since March 25, its daily charter rate has been increased to US$23,888, and the business trust expects stronger charter revenues in the upcoming quarters.

Rickmers Maritime has also upped its repayment of bank loans to US$12.66 million this quarter, from US$2.78 million in Q1 2010, and hopes to continue to improve its gearing. With a current debt/equity ratio of 2:1, its target is 1:1.

Rickmers Trust Management chief executive officer Thomas Preben Hansen said Rickmers Maritime has started the financial year positively.

He said: ‘Our financial position has strengthened significantly as we continue with deleveraging efforts.’

With its fleet of 16 vessels fully employed through 2011 and having a remaining committed revenue of about US$725 million in the coming eight years, Mr Hansen is confident about the container shipping market.

He expects better market conditions in the second half of the year and the trust to continue to generate steady cash flows.