Thursday, August 10 2000

Hvide Marine cuts losses

"We are gradually turning the corner,'' commented Hvide Marine, Inc.CEO Gerhard E. Kurz. as the company today reported a net loss of $3.3 million or $0.33 per diluted share for the quarter ended June 30, 2000. That compares with a net loss of $23.7 million or $1.53 per diluted share for the year-earlier period. The current quarter's results include an approximately $7 million gain from the settlement of a lawsuit involving a canceled shipyard contract.

Revenues of $80.2 million for the 2000 second quarter were down from the year-earlier figure of $89.0 million due mainly to tanker retirements and drydockings, and lower towing revenues. Operating income, however, increased to $6.0 million from a year-earlier loss of $0.3 million as a result of lower depreciation expense.

In the immediately preceding quarter, ended March 31, 2000, the company had a net loss of $12.9 million or $1.29 per diluted share on revenues of $78.6 million.

"Improved results in our offshore energy support business reflect an encouraging increase in day rates for our worldwide Seabulk Offshore fleet, and we expect this trend to continue as the demand for drilling support services grows," said Kurz. "At the same time, we are reducing our cost structure through the consolidation of facilities and functions and by paying down debt through a scheduled asset sale program. We are focused on achieving quarter-over-quarter improvements, strengthening our capital structure, winning new contracts, and extracting the maximum value from our asset base.''

Operating Results

Revenues from the company's Seabulk Offshore unit totaled $37.5 million, up from $34.2 million in the first quarter of 2000.

In the Gulf of Mexico, day rates for Seabulk Offshore's 23 supply boats averaged $3,895 in the second quarter against $3,740 in the first quarter, but utilization declined to 63% from 71% due to certain vessels being out of service for maintenance. Seabulk Offshore's 32 Gulf of Mexico crewboats averaged $1,926 and a 77% utilization rate versus $1,850 and 78%, respectively, in the previous quarter.

Internationally, where the company has major operations in West Africa, the Middle East and Far East, day rates for Seabulk Offshore's fleet of 67 anchor handling tug and tug supply vessels averaged $4,471, up from $4,290 in the first quarter, while utilization improved to 63% from 56%. Day rates for Seabulk Offshore's international fleet of 39 crew/utility vessels rose to $1,618 from $1,551, while utilization was 41% against 40%.

Hvide Marine Towing (HMT), which operates a fleet of 34 harbor and offshore tugs in the Gulf of Mexico and along the Florida and Gulf coasts, had revenues of $8.3 million versus $8.7 million in the first quarter due mainly to seasonal declines in Port Everglades and Port Canaveral and the sale of the Seabulk Carolyn. In the port of Tampa, where there is renewed competition, HMT added the SDM(TM) Mark II Suwannee River to its fleet in late June and maintained an approximate 75% market share.

In marine transportation, which includes the company's 10 U.S.-flag Jones Act chemical and product carriers, five of which are double-hulled, revenues declined to $34.4 million in the second quarter from $35.7 million in the first quarter as a result of out-of-service time for two vessels due to scheduled drydockings.

In early August, the product carrier HMI Trader, approaching the end of her OPA 90 life, completed a grain voyage to East Africa and has been sold for scrap. Also in early August, one of the company's double-hull, Lightship-class tankers, the HMI Cape Lookout Shoals, began a new three-year time charter (with two one-year options) with a subsidiary of Tesoro Petroleum Corporation, transporting Alaskan crude to refineries in Alaska, Hawaii and Washington state.

Asset Sales

Hvide is obliged under an amended credit agreement to prepay $60 million of debt by year-end, primarily through the sale of vessels and other assets. To date,it has completed the sale of 18 vessels for net proceeds of $18.6 million. The vessels sold include 11 laid-up Seabulk Offshore units, mainly in the Middle East, four offshore tugs, and three Sun State Marine tank barges. Additional sales are pending.

Tidewater buys PSV's
Tidewater Inc. has entered into agreements to purchase two 220 foot UT755 type platform supply vessels currently under construction by yards in Norway with scheduled delivery dates in December 2000 and May 2001. Aggregate purchase price for the two vessels is $26.4 million.

"We are very pleased with this opportunity to add vessels of this type to our deep-water marine support services capabilities without adding additional vessels to the industry's worldwide fleet size," said William C. O'Malley, Tidewater's chairman, president and chief executive officer. "We believe both the price and delivery dates of these vessels to be attractive."

Union continues Gulf Coast push
The new AFL-CIO union Offshore Mariners United is pushing ahead with its drive to unionize mariners employed on Gulf of Mexico workboats. Its latest move is to sponsor a call in radio show for mariners and their spouses on WTIX 690 AM radio. It kicks off with a two hour show this Sunday from 9.00 to 11.00 pm.

 

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