Excel Maritime Carriers Ltd. (EXM), an owner of vessels that transport iron ore and coal whose chief executive officer resigned in February, said it took a fourth-quarter loss on goodwill impairment related to an acquisition. The shares rose 23 percent in trading after the market closed.
The net loss was $329.2 million, or $7.49 a share, after a profit of $34.1 million, or $1.71, a year earlier, Hamilton, Bermuda-based Excel said in a statement. Sales rose to $189.2 million from $60.9 million. The goodwill impairment charge of $335.4 million was the result of the acquisition of Quintana Maritime Ltd., a larger rival, in 2008.
“We continue to believe that Excel is in a much more tenuous position than many of its dry-bulk peers” largely because of the debt incurred in buying Quintana, Natasha Boyden, an analyst at Cantor Fitzgerald LP in New York, said in a March 20 note to investors. “There may be little, if any, equity value remaining.” She has a “sell” rating on the shares.
Excel rose 22 cents, or 3.9 percent, to $5.94 on the New York Stock Exchange composite trading before the earnings statement was released. The shares rose to $7.28 as of 4:31 p.m. in New York after the earnings statement.
Profit from operations, excluding the impairment charge of $335.4 million, a vessel-order cancellation charge of $15.6 million and other one-time items, was $75.4 million, or $1.71 per share. On that basis, Boyden expected profit of $1.66 per share.
On April 1, Excel said it renegotiated its bank loans. The shipowner has debt totaling 2.02 billion euros ($2.68 billion) in debt, Bloomberg data showed. The company said Feb. 23 that Stamatis Molaris had resigned as CEO. He took the post in January 2008, when Excel bought Quintana for $2.5 billion.
Excel in February said it would suspend its 40-cent-per-share dividend indefinitely to save cash. Shipowners including Genco Shipping & Trading Ltd., Eagle Bulk Shipping Inc. and DryShips Inc. have renegotiated debt agreements and suspended dividends.
The family of Excel Chairman Gabriel Panayotides said it will issue $45 million in equity in the form of 25.7 million shares and 5.5 million warrants with an excise price of $3.50 each. The issuance is subject to a yearlong lockup beginning yesterday, the statement showed.
Excel is “the high-risk, high-reward name, and it should be treated as an option at this point,” Rupinski said. “They’re going to work things out with the banks and they’re going to have enough staying power to last until the market improves.” He has a “buy” rating on the shares.
The shipowner in February said two charterers began paying half rates on three Excel vessels. Excel said today that the charterer of its Kirmar Capesize-class ship will pay a reduced rate of $49,000 per day, from an earlier agreement $105,000 per day. The charter was extended for an additional two years and has a profit-sharing component.
Excel’s ships earned an average spot rate of $8,207 per day, down 86 percent from $58,097 a year ago. The average daily rate for its fleet on time-charter contract was $29,754, down 9.6 percent, from $32,926 a year earlier.
(Excel tomorrow will hold a conference call for investors and analysts at 10 a.m. New York time, accessible by dialing 1-866-819-7111 or through the company’s Web site at http://www.excelmaritime.com)
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