Baltic Trading Limited yesterday reported its financial results for the three and six months ended June 30, 2013.
The following financial review discusses the results for the three and six months ended June 30, 2013 and June 30, 2012.
Second Quarter 2013 and Year-to-Date Highlights
• Declared a $0.01 per share dividend payable on or about August 22, 2013 to all shareholders of record as of August 15, 2013 based on Q2 2013 results;
• Recorded a net loss of $4.6 million, or $0.19 basic and diluted net loss per share for the second quarter;
• Raised $23.1 million of gross proceeds in a follow-on equity offering at $3.60 per share; and
• Agreed to acquire two modern Handysize vessels to be renamed the Baltic Hare and the Baltic Fox, for an aggregate purchase price of $41.0 million.
Financial Review: 2013 Second Quarter
The Company recorded a net loss for the second quarter of 2013 of $4.6 million, or $0.19 basic and diluted net loss per share. Comparatively, for the three months ended June 30, 2012, the Company recorded a net loss of $3.7 million, or $0.16 basic and diluted net loss per share.
EBITDA was $91,000 for the three months ended June 30, 2013 versus $1.1 million for the three months ended June 30, 2012.
John C. Wobensmith, President and Chief Financial Officer, commented, "During the second quarter, we continued to employ our fleet of modern vessels on spot market-related time charters with multi-national companies while preserving a cost-effective operating platform. We also declared a dividend of $0.01 per share for the second quarter, increasing the cumulative dividend declared by the Company to $1.04 per share since going public in March 2010. Seeking to position the Company to capitalize on a rising freight rate environment when market conditions improve, we agreed last month to acquire two Handysize vessels expanding our high-quality fleet approximately 10% on a tonnage basis. We remain dedicated to maintaining a sound capital structure and pursuing additional acquisition opportunities that create long-term value for our shareholders."
Baltic Trading Limited's revenues decreased to $6.4 million for the three months ended June 30, 2013 compared to $7.6 million for the three months ended June 30, 2012 due to lower spot market rates achieved by our vessels during the second quarter of 2013.
The average daily time charter equivalent, or TCE, rates obtained by the Company's fleet was $7,548 per day for the three months ended June 30, 2013 as compared to $8,802 for the three months ended June 30, 2012. The decrease in TCE was primarily due to lower spot rates achieved by the vessels in our fleet during the second quarter of 2013 versus the second quarter of 2012. Although the pace of vessel deliveries has declined in 2013, excess vessel supply together with uncertainty regarding global growth prospects contributed to a soft freight rate environment during most of the second quarter. Beginning in mid-June, however, increased iron ore cargoes from Brazil coupled with firm coal and grain fixture volume helped provide support to freight rates.
Total operating expenses were $10.0 million for the three months ended June 30, 2013 compared to $10.2 million for the three months ended June 30, 2012. Vessel operating expenses were $4.2 million for the three months ended June 30, 2013 and $4.3 million for the three months ended June 30, 2012. General, administrative and technical management expenses were $1.2 million for the second quarter of 2013 as compared to $1.1 million for the second quarter of 2012. Depreciation and amortization expenses were $3.7 million for the three months ended June 30, 2013 and June 30, 2012.
Daily vessel operating expenses, or DVOE, marginally decreased to $5,187 per vessel per day for the second quarter of 2013 from $5,214 per vessel per day for the same quarter of 2012. We note that our second quarter 2013 DVOE is below our budget set forth at the beginning of the year. We believe daily vessel operating expenses are best measured for comparative purposes over a 12 month period in order to take into account all of the expenses that each vessel in our fleet will incur over a full year of operation. Based on estimates provided by our technical managers and management's expectations, we expect DVOE for 2013 to be $5,400 per vessel per day on a weighted average basis.
Financial Review: First Half 2013
The Company recorded a net loss of $9.7 million or $0.41 basic and diluted net loss per share for the six months ended June 30, 2013, compared to a net loss of $8.1 million or $0.37 basic and diluted net loss per share for the six months ended June 30, 2012. Voyage revenues decreased to $12.4 million for the six months ended June 30, 2013 compared to $13.9 million for the six months ended June 30, 2012 due to lower spot market rates achieved by our vessels during the first half of 2013. EBITDA was $(0.3) million for the six months ended June 30, 2013 versus $1.4 million for the six months ended June 30, 2012. TCE rates obtained by the Company decreased to $7,121 per day for the six months ended June 30, 2013 from $8,158 per day for the six months ended June 30, 2012 mainly due to lower rates achieved for our vessels during the first six months of 2013 as compared to the prior year period. Total operating expenses were $20.0 million for the six months ended June 30, 2013 compared to $19.9 million for the six months ended June 30, 2012, and daily vessel operating expenses per vessel were $4,980 versus $5,001 in the comparative periods.