K-Sea Announces Record Results

Monday, October 31, 2005
K-Sea Transportation Partners L.P. reported record results of operations for its fiscal 2006 first quarter ended September 30, 2005. The Company also announced that its distribution to unitholders in respect of the first quarter will increase by $0.01 to $0.57 per unit, or $2.28 per unit annualized. The distribution will be payable on November 14, 2005 to unitholders of record on November 8, 2005.

For the three months ended September 30, 2005, the Company reported operating income of $6.2 million, an increase of $1.7 million, or 37%, compared to $4.5 million of operating income for the three months ended September 30, 2004. The increase resulted from the expansion of the Company's fleet barrel-carrying capacity over the past year and continued strong vessel utilization, plus improved average daily rates in the Company's coastwise trade as a result of continuing strong demand for refined petroleum products and higher oil prices. Additional vessels put into service over the past year include the tank barges acquired as part of the Norfolk acquisition in December 2004, which are now contributing positively to operating results, one vessel which was placed back in service in September 2004, after being double hulled, and one vessel placed back in service in May 2005 after being retrofitted. Hurricanes Katrina and Rita had no significant impact on operations for the quarter.

These improvements were partially offset by increased general and administrative costs and depreciation. The increase in general and administrative expenses of $1.6 million resulted from $0.6 million of increases in personnel costs in support of the Company's growth, a $0.4 million increase in costs associated with being a public company (including costs for compliance with the Sarbanes-Oxley Act of 2002), and costs related to the Norfolk operations acquired in late 2004. Earnings before interest, taxes, depreciation, amortization, and losses on reduction of debt (EBITDA) increased by $1.8 million, or 18%, to $11.6 million for the three months ended September 30, 2005, compared to $9.9 million in the fiscal 2005 first quarter.

Net income for the three months ended September 30, 2005 was $4.2 million, or $0.47 per fully diluted limited partner unit, an increase of $1.1 million compared to $3.1 million, or $0.37 per fully diluted limited partner unit, for the three months ended September 30, 2004. The increase in net income resulted from the improved operating earnings offset by increased interest expense in the fiscal 2006 first quarter due to higher average borrowings incurred to finance vessel acquisitions over the past year.

As previously reported, on October 18, 2005 K-Sea closed its acquisition of Sea Coast Transportation LLC. Sea Coast operates fifteen tank barges and fifteen tugboats, representing 705,000 barrels of capacity, which represents a 27% increase in the barrel-carrying capacity of the K-Sea fleet to almost 3.3 million barrels, which K-Sea believes makes it the largest coastwise tank barge operator, measured by barrel-carrying capacity, in the United States. Additionally, on October 21, 2005, K-Sea acquired an 80,000 barrel integrated tug-barge unit for approximately $13 million, for operation on the Great Lakes, which is expected to be immediately accretive to distributable cash flow.

President and CEO Timothy J. Casey said "Our results for the fiscal 2006 first quarter improved significantly from the prior year, reflecting the factors mentioned above. We expect our results to be strengthened further by our ongoing capacity additions, in particular the acquisition of Sea Coast in October. Additionally, five new vessels currently under construction, including one 100,000 barrel and four 28,000 barrel tank barges, are scheduled to be delivered during fiscal 2006, which we expect to contribute further to the growth in earnings and distributable cash flow. In light of our results and expectations, our Board of Directors has approved a one cent per unit increase in our quarterly distribution, the fourth distribution increase since our initial public offering in January 2004."

The Company's distributable cash flow for the first quarter of fiscal 2006 was $6.6 million, or approximately 1.15 times the amount needed to cover the increased cash distribution of $5.8 million declared in respect of the period. During October 2005, the Company issued a total of 950,000 new common units in a public offering, and 125,000 new common units in connection with the Sea Coast acquisition. Excluding these new units, distribution coverage for the quarter ended September 30, 2005 would have been 1.28 times.

Maritime Today

The Maritime Industry's original and most viewed E-News Service

Maritime Reporter November 2015 Digital Edition
FREE Maritime Reporter Subscription
Latest Maritime News    rss feeds

Tanker Trends

Idling Fleet Continues to Surge

Owners are rapidly laying up containerships as the market slows. The size of the idle fleet will get bigger while rates and profits slide, says Drewry Shipping Consultants Limited.

Egypt to Complete East Port Said Side Channel in 2016

Egypt plans to complete a side channel in East Port Said, near the Suez Canal, that would speed up shipping and allow ships direct entry into the port by the end of June 2016,

Concordia Maritime Charters MR Tanker

Concordia Maritime has signed a contract for the charter of an IMO2/3 class MR tanker, the company announced today. The vessel will be chartered jointly with Stena Weco,


Canada to Aid Developing Nations Fight Climate Change

Canada will provide aid to developing countries to combat climate change, Prime Minister Justin Trudeau announced on Friday ahead of talks on global warming,

Gates to Launch Mega Clean Tech Initiative

Microsoft co-founder Bill Gates will launch a multi-billion-dollar clean energy research and development initiative on Monday, the opening day of the U.N. climate change summit in Paris,

Extended Warranty from Yanmar for Sailboat Engines

Yanmar Marine International B.V. has introduced an extended 3 years’ period of YANMAR Limited Warranty for Sailboat Engine Models. This extended warranty of

Maritime Contracts Maritime Standards Naval Architecture Navigation Offshore Oil Pod Propulsion Port Authority Salvage Ship Electronics Winch
rss | archive | history | articles | privacy | contributors | top maritime news | about us | copyright | maritime magazines
maritime security news | shipbuilding news | maritime industry | shipping news | maritime reporting | workboats news | ship design | maritime business

Time taken: 0.0933 sec (11 req/sec)