Thu 28 Jan 2010, 13:02 GMT

Barge operator posts $4.2 million net loss


$7.8m drop in net income is attributed to a reduction in net utilization related to the retirement of its single-hull vessels.



US barge operator K-Sea Transportation Partners L.P. has announced that the company recorded a net loss of $4.2 million for the three months ended 31st December 20009 - a decrease of $7.8 million compared to the net income of $3.6 million it achieved during the corresponding period in 2008.

The company reported an operating income of $1.3 million for the last three months of 2009, a decrease of $8.1 million, compared to $9.4 million of operating income for the three months ended December 31, 2008.

Earnings before interest, taxes, depreciation and amortization (EBITDA), decreased by $7.2 million, or 31%, to $15.9 million for the three months ended December 31, 2009, compared to $23.1 million in 2008.

K-Sea said the decrease in EBITDA resulted from an $11.4 million decrease in revenue, net of voyage expense, which was attributable to fewer working days due to the retirement of a majority of the company's single-hull vessels and an overall reduction in net utilization directly relating to expiring contracts, and having to employ vessels in the spot market.

"Due to customer preference for double-hull vessels, we have taken a majority of our single-hull vessels out of the market and have either retired or sold them," K-Sea said.

The EBITDA decrease was partially offset by a $3.3 million reduction in vessel operating expenses and a $0.9 million reduction in general and administrative expenses, said to have been achieved mainly as a result of cost reduction initiatives.

Six Months Ended December 31, 2009

For the six months ended December 31, 2009, K-Sea achieved a net loss of $9.4 million - a decrease of $16.9 million compared to net income of $7.5 million for the six months ended December 31, 2008.

The decrease was said to be a result of the $11.7 million decrease in EBITDA and a $5.3 million increase in depreciation and amortization expense resulting from the vessel impairment loss mentioned above, offset by a $1.9 decrease in interest expense due to lower average debt balances and interest rates compared to the six months ended December 31, 2008.

The company reported operating income of $0.04 million, compared to $19.2 million of operating income for the six months ended December 31, 2008. Operating income was said to have been negatively impacted by a $5.9 million asset impairment charge on its single-hull vessels.

EBITDA decreased by $11.7 million, or 25%, to $34.1 million for the six months ended December 31, 2009, compared to $45.8 million for the six months ended December 31, 2008. The decrease in EBITDA resulted from a $15.5 million decrease in net voyage revenue, which as mentioned above was said to be attributable to fewer working days due to the retirement of a majority of its single-hull vessels and an overall reduction in net utilization directly relating to expiring contracts and having to employ vessels in the spot market.

Commenting on the results, President and CEO Timothy J. Casey said, "U.S. refinery utilization has declined to levels not seen over the past 20 years, excluding periods of hurricane-related closures. As period charters for a number of our vessels have expired, market conditions have precluded new period charters and forced more vessels into a weaker spot market. Vessel utilization in our second fiscal quarter is about the lowest we have experienced in the last ten years. Accordingly, we will continue to focus on servicing our customers safely and efficiently, while doing our best to maximize both our revenue and our margins. In light of the current utilization, we will continue to reduce costs, rationalize assets, as well as using available capacity to enter adjacent markets. At the same time we expect to apply all free cash flow to reduce debt. We believe strongly in the quality and value of our fleet, as well as our leadership position in the markets we serve, and expect K-Sea to benefit appropriately when refined petroleum products markets strengthen.

"Owing to the uncertain industry outlook, our Board determined that K-Sea and its unitholders would be best served by applying our available cash flow to reduce debt. We therefore did not declare a distribution with respect to our second fiscal quarter, and will reinstate the distribution when we regain visibility in our future results."


Navios Turquoise vessel. Navios Partners takes delivery of second LNG- and methanol-ready boxship in newbuilding series  

Handover of 7,900-TEU Navios Turquoise follows delivery of sister ship Navios Cyan in May.

Yang Ming and Hanwha Ocean contract signing ceremony. Yang Ming orders six 13,000-TEU LNG dual-fuel vessels from Hanwha Ocean  

Taiwanese carrier expands green fleet with ammonia-ready newbuilds due for delivery by 2029.

AiP award ceremony for 12,500-cbm LNG bunker vessel design. LR awards approval in principle to Chinese yard for 12,500-cbm LNG bunker vessel design  

Lloyd’s Register validates new LNG bunkering vessel concept by CSSC Huangpu Wenchong at SMM 2026.

Santiago I vessel. Marflet Marine becomes first Spanish merchant fleet owner to operate wind-assisted suction sails  

Spanish chemical tanker operator installs bound4blue eSAILs, targeting 10–15% energy savings.

Teunis Visser, IBIA. IBIA appoints veteran fuel industry trainer Teunis Visser as advisor  

Association brings on board specialist with nearly 40 years of oil, gas and bunker sector experience.

AiP award ceremony for a 114,000-DWT tri-fuel-ready tanker concept. Lloyd’s Register and MARIC unveil tri-fuel-ready tanker concept at SMM 2026  

New 114,000-DWT tanker design offers conversion readiness for LNG, methanol or ammonia.

TFG Marine mass flow meter (MFM). TFG Marine fits two more US Gulf Coast barges with certified mass flow meters  

TFG Marine expands its mass flow meter rollout on the US Gulf Coast, adding ISO 22192 certification to two supply barges.

Hercules Vanessa vessel. HTM’s Hercules Vanessa begins maiden voyage as Ultra-Spec tanker series expands  

Vessel is the latest addition to Hercules Tanker Management’s 10-ship next-generation fleet renewal programme.

Steel-cutting ceremony for TRAnsverse 2600e vessels. Cochin Shipyard begins construction of Svitzer’s battery-electric tugs in India  

Four TRAnsverse 2600e vessels are claimed to be among the most advanced green tugs under construction globally.

TT-Line Green Ship 2.0 illustration. MacGregor wins ro-ro equipment contract for TT-Line’s battery-hybrid LNG ferries  

Company to supply cargo handling systems for two new LNG-powered ferries destined for Baltic Sea routes.