Seabulk posts profit
Seabulk International, Inc. (Nasdaq: SBLK) today reported net income of $5.7 million or $0.24 per diluted share on revenue of $82.5 million for the quarter ended March 31, 2004. Included in the quarter's results was a previously announced gain of $4.5 million on the settlement of litigation. In the year-earlier period, the company had net income of $1.6 million or $0.07 per diluted share on revenue of $77.2 million. Operating income in the current quarter was $10.4 million compared with $10.8 million in the prior year.
"Strong performances from our tanker and towing businesses offset continued weakness in the offshore Gulf of Mexico market and enabled us to post a net profit for the quarter," commented Chairman and CEO Gerhard E. Kurz.
"While we expect some future recovery in the Gulf of Mexico," said Kurz, "we took decisive steps in the meantime to reduce costs and consolidate operations in that region. Internationally, our offshore operations continued strong with a notable pickup in West Africa, which is our largest market. The tanker business benefited from full utilization of the fleet as there were no drydockings during the quarter. As previously announced, we added two modern foreign-flag vessels to our tanker fleet at the end of March, the Seabulk Reliant and the Seabulk Trust. Revenue and income from these vessels will be fully reflected in our second quarter results. Looking ahead, we have one tanker drydocking scheduled for the second quarter; both the tanker and towing businesses should continue to perform well, and we anticipate mixed offshore earnings with domestic weak and international strong."
Results of Operations Revenue from Seabulk Offshore, the Company's largest business with a fleet of 117 offshore energy support vessels, rose to $39.6 million from $37.8 million in the year-earlier period, driven entirely by increased international revenues, and accounted for 48% of total company revenue. Expenses, however, also increased--mainly for bareboat charter hire-- and international profits were not enough to offset domestic losses. As a result, Seabulk Offshore posted an operating loss for the period of $0.9 million versus breakeven results in the year-earlier quarter.
In the immediately preceding quarter, ended December 31, 2003, Seabulk Offshore had an operating loss of $4.3 million. In the Gulf of Mexico, where the first quarter is traditionally the slowest, both day rates and utilization were down from the year-earlier period and from the immediately preceding quarter.
In West Africa, which accounts for more than half the company's offshore revenue --and where Seabulk Offshore has the industry's second largest fleet--utilization increased across all categories and day rates remained firm.
In the Middle East and Southeast Asia, which together account for about 25% of offshore revenues, results were improved from the year-earlier period.
Revenue from Seabulk Tankers, the Company's fleet of 10 Jones Act product carriers and the two newly added foreign-flag carriers, totaled $33.5 million or 40% of total Company revenue compared with $30.2 million in the first quarter of 2003 due to higher utilization and the conversion of a bareboat charter to a consecutive voyage charter. Operating income, however, was marginally lower at $10.4 million compared with $11.1 million in the year-ago period as the company assumed the operating expenses of the previously bareboated vessel and amortized drydocking costs were higher.
Revenue and income from Seabulk's two new foreign-flag tankers will be fully reflected for the first time in results for the second quarter (in the quarter just ended, nine days of revenue for one vessel are included).
Seabulk Towing, which operates a fleet of 26 tugs in seven southeastern ports and the offshore Gulf of Mexico, had revenue of $9.6 million, representing 12% of totalcCompany revenue for the quarter, compared with $9.3 million a year ago. Operating income of $2.5 million was down slightly from $2.7 million due mainly to higher maintenance and fuel costs. As previously announced, Seabulk Towing's innovative Ship Docking Module (SDM) was chosen over a number of competing technologies by a leading European tug operator, which purchased the rights to build and operate two SDMs( within its home territory of Spain.