STX Europe Company Update
STX France has recently experienced cost overruns mainly related to one of its cruise vessels under construction at its St Nazaire shipyard. The cost overrun could represent a negative deviation up to $20.3m – 27.1m, but every possible effort is being made to limit such cost overrun. The physical construction of the vessel is however in good progress, and the vessel is expected to be delivered on-time and to the client's full satisfaction. STX France has a solid working capital position, and the funding of such cost overrun will be managed from the existing working capital in STX France. As a consequence of the cost overruns, STX Europe has agreed with Nordea Bank to adjust the interest coverage ratio covenant (EBITDA/Interest) to reflect such a lower expected EBITDA in 2010.
Q2 2009, Strong Improvement in OSVs
STX Europe AS reported an EBITDA result for the Group of $12.3m for the second quarter of 2009, up from $11.08m in the corresponding period last year. With improved cost control and overall satisfactory operational performance, the business area Offshore & Specialized Vessels reported strong progress in the quarter with an EBITDA result of $25.3m, up 228 percent from the same period last year. Overall, activity levels remained high during the quarter, with the successful delivery of eleven vessels. In general, operations at the yards have progressed according to plan. During the first six months of 2009, STX Europe delivered a total of 22 vessels, of which eleven were delivered in the second quarter.
