Solvtrans Holding ASA Interim report third quarter 2010
Highlights in the third quarter
Operating income satisfactory. Operating income in the third quarter of NOK 58.2 million, a 4 percent increase from the corresponding quarter 2009, reports http://www.megafishnet.com/ with reference to Solvtrans.
EBITDA satisfactory, but adversely affected by non‐recurring items. EBITDA of NOK 20.5 million in the third quarter compared with NOK 26.2 million in the corresponding quarter 2009. EBITDA in the third quarter 2010 was affected negatively by non‐recurring items and accrual errors relating to previous accounting periods at a total of NOK 9.9 million.
Solid equity ratio. Equity ratio of 30 percent as at 30 September. Refinancing of NOK 140 million bond loan completed by the end of the second quarter 2010.
Positive cash flow development compared with first half 2010. Net cash flow of NOK 11 million in the third quarter. Cash flow from operations has improved considerably, and the third quarter saw a lower level of investments compared with the first half 2010.
Strong contract coverage. Over 90 percent contract coverage for remainder of 2010, 84 percent coverage for 2011 and 60 percent for 2012.
Measures taken to improve liquidity in the Solvtrans share. Market making agreement signed with DnB NOR Markets in September 2010.
The growth in the salmon production is a driver for the wellboat market and the outlook for the transport of salmon and trout is positive in that a strong production growth is expected. There is an increased focus on combating salmon lice and infectious diseases in the salmon industry, as well as increased demand for closed technology for the transport of live fish At the same time the availability of wellboats is not sufficient enough to prevent a rate increase. This situation is expected to continue in 2011 and 2012, as the order books show only a limited growth in the total fleet in the coming years. In the third quarter only one new contract was signed. In September Bømlo Bronnbatservice placed an order of one 1,500 m3 wellboat with options for both open and closed technology, for delivery in February 2012.
Solvtrans has the most modern fleet in the wellboat industry, with a future‐oriented technology for efficient and environmentally‐friendly transport of live fish in a closed and cooled environment, which provides a better end‐product and prevents transmission of infectious diseases during transport. The company's strategy aims at a continuous renewal of the fleet in order to secure an even stronger competitive position in a longterm perspective. Acquisition of up‐to‐date used tonnage and/or contracting of new vessels will therefore be evaluated continuously vis‐a‐vis the observed client expectations and demands.
The company is well prepared to respond to the increased demand for transport with modern wellboats. The company's main priority in the nearest future is more cost effective operations as well as cost saving measures to highlight the company's potential for earning.
The board of directors expects a positive development with improved reported EBITDA in fourth quarter 2010 compared with the third quarter 2010.