Globus Maritime Limited Reports Financial Results for the quarter and six month period ended June 30, 2017
ATHENS, GREECE -- (Marketwired) -- 10/04/17 -- Globus Maritime Limited ("Globus," the "Company," "we," or "our") (NASDAQ: GLBS), a dry bulk shipping company, today reported its unaudited consolidated operating and financial results for the six month period ended June 30, 2017.
In H1 2017, Total revenues increased by about 63% compared to H1 2016
In H1 2017, Debt under loan agreements was reduced by about 30% compared to H1 2016
Financial Highlights
Three months ended Six months ended
June 30, June 30,
(Expressed in thousands of U.S dollars except for daily rates and per share data) 2017 2016 2017 2016
Total revenues 3,636 2,113 6,329 3,877
Adjusted (LBITDA)/EBITDA (1) 656 (825) 283 (2,276)
Total comprehensive loss (1,383) (2,916) (3,725) (4,584)
Basic loss per share (2) (0.05) (1.12) (0.17) (1.77)
Daily Time charter equivalent rate (TCE) (3) 7,173 4,135 6,133 3,097
Average operating expenses per vessel per day 4,710 4,816 4,794 4,337
Average number of vessels 5.0 5.0 5.0 5.4
(1) Adjusted (LBITDA)/EBITDA is a measure not in accordance with generally accepted accounting principles ("GAAP"). See a later section of this press release for a reconciliation of (LBITDA)/EBITDA to total comprehensive (loss) and net cash (used in)/ generated from operating activities, which are the most directly comparable financial measures calculated and presented in accordance with the GAAP measures.
(2) The weighted average number of shares for the six month period ended June 30, 2017 was 22,353,211 compared to 2,590,640 shares for the six month period ended June 30, 2016. The weighted average number of shares for the three month period ended June 30, 2017 was 27,630,651 compared to 2,598,438 shares for the three month period ended June 30, 2016. The actual number of shares outstanding as of June 30, 2017 was 27,637,273 and the basic loss per share outstanding as of June 30, 2017 for the six month period ended June 30, 2017 was $0.13.
(3) Daily Time charter equivalent rate (TCE) is a measure not in accordance with generally accepted accounting principles ("GAAP"). See a later section of this press release for a reconciliation of Daily TCE to Voyage revenues.
Current Fleet Profile As of the date of this press release, Globus' subsidiaries own and operate five dry bulk carriers, consisting of four Supramax and one Panamax.
Vessel Year Built Yard Type Month/Year Delivered DWT Flag
Moon Globe 2005 Hudong-Zhonghua Panamax June 2011 74,432 Marshall Is.
Sun Globe 2007 Tsuneishi Cebu Supramax Sept 2011 58,790 Malta
River Globe 2007 Yangzhou Dayang Supramax Dec 2007 53,627 Marshall Is.
Sky Globe 2009 Taizhou Kouan Supramax May 2010 56,855 Marshall Is.
Star Globe 2010 Taizhou Kouan Supramax May 2010 56,867 Marshall Is.
Weighted Average Age: 9.3 Years as of June 30, 2017 300,571
Current Fleet Deployment All our vessels are currently operating on short term time charters ("on spot").
Management Commentary
Athanasios Feidakis, President, Chief Executive Officer and Chief Financial Officer of Globus Maritime Limited, stated:
"As the year evolves we are pleased with our efforts bearing fruit. In the first half of 2017 we saw our total revenues increase by 63% compared to the same period last year, we were also able to reduce our debt by about 30% again compared to the first half of last year.
"In February we successfully completed a private placement transaction with a group of investors encompassing a $5 million share purchase of Company's common shares plus warrants.
"We are happy to see our statement of financial position at a healthier level after almost two years.
"The recovery of benchmark dry bulk rates in the last few months has allowed us to enjoy hiring out our vessels at significantly higher rates than the previous year.
"In late 2016 we decided to increase our spending on the general maintenance of the fleet, in order to better serve our clients and improve utilization rates. We expected an initial increase in costs but also expected these costs to gradually normalize and drop, as we are actually seeing now.
"We are hoping to see a further improvement of the market fundamentals in the medium term future. We remain cautiously optimistic, and are following the market closely in our undertaking to best serve our clients and shareholders."
Management Discussion and Analysis of the Results of Operations
Second quarter of the year 2017 compared to the second quarter of the year 2016
Total comprehensive loss for the second quarter of the year 2017 amounted to $1.4 million or $0.05 basic loss per share based on 27,630,651 weighted average number of shares, compared to total comprehensive loss of $2.9 million for the same period last year or $1.12 basic loss per share based on 2,598,438 weighted average number of shares.
The following table corresponds to the breakdown of the factors that led to the decrease in total comprehensive loss during the second quarter of 2017 compared to the second quarter of 2016 (expressed in $000's):
2nd Quarter of 2017 vs 2nd Quarter of 2016
Net loss for the 2ndquarter of 2016 (2,916)
Increase in voyage revenues 1,602
Decrease in Management fee income (79)
Increase in Voyage expenses (220)
Decrease in Vessels operating expenses 48
Decrease in Depreciation 1
Decrease in Depreciation of dry docking costs 50
Decrease in Total administrative expenses 106
Decrease in Other expenses, net 23
Decrease in interest income (1)
Decrease in Interest expense and finance costs 155
Decrease in Foreign exchange gains (152)
Net loss for the 2ndquarter of 2017 (1,383)
Voyage revenues During the three-month period ended June 30, 2017 and 2016, our Voyage revenues reached $3.6 million and $2 million respectively. The 80% increase in Voyage revenues was mainly attributed to the increase in the average time charter rates achieved by our vessels during the second quarter of 2017 compared to the same period in 2016. Daily Time Charter Equivalent rate (TCE) for the second quarter of 2017 was $7,173 per vessel per day against $4,135 per vessel per day during the same period in 2016 corresponding to an increase of 73%.
Voyage expenses Voyage expenses reached $0.4 million during the second quarter of 2017 compared to $0.2 million during the same period last year. Voyage expenses include commissions on revenues, port and other voyage expenses and bunker expenses. Bunker expenses mainly refer to the cost of bunkers consumed during periods that our vessels are travelling seeking employment. Voyage expenses for the first half of 2017 and 2016 are analyzed as follows:
In $000's 2017 2016
Commissions 198 102
Bunkers expenses 151 -
Other voyage expenses 23 50
Total 372 152
Vessel operating expenses Vessel operating expenses, which include crew costs, provisions, deck and engine stores, lubricating oils, insurance, maintenance, and repairs, decreased by $0.1 million or 5% to $2.1 million during the three month period ended June 30, 2017 compared to $2.2 million during the same period in 2016. The breakdown of our operating expenses for the quarters ended June 30, 2017 and 2016 was as follows:
2017 2016
Crew expenses 53 % 53 %
Repairs and spares 22 % 21 %
Insurance 8 % 10 %
Stores 7 % 7 %
Lubricants 7 % 7 %
Other 3 % 2 %
Average daily operating expenses during the three month periods ended June 30, 2017 and 2016 were $4,710 per vessel per day and $4,816 per vessel per day respectively, corresponding to a decrease of 2%.
Interest expense and finance costs Interest expense and finance costs reached $0.5 million for the second quarter of 2017 compared to $0.7 during the same period in 2016. The decrease is mainly attributed to the conversion of $20 million of outstanding principal of two loans to 20 million shares, as described in the Share and Warrant Purchase Agreement that we entered on February 8, 2017. Interest expense and finance costs for the second quarter of 2017 and 2016 are analyzed as follows:
In $000's 2017 2016
Interest payable on long-term borrowings 447 630
Bank charges 9 9
Amortization of debt discount 21 24
Other finance expenses 41 10
Total 518 673
First half of the year 2017 compared to the first half of the year 2016
Total comprehensive loss for the first half of the year 2017 amounted to $3.7 million or $0.17 basic loss per share based on 22,353,211 weighted average number of shares, compared to total comprehensive loss of $4.6 million for the same period last year or $1.77 basic loss per share based on 2,590,640 weighted average number of shares.
The following table corresponds to the breakdown of the factors that led to the decrease in total comprehensive loss during the first half of 2017 compared to the first half of 2016 (expressed in $000's):
1st half of 2017 vs 1st half of 2016
Net loss for the 1sthalf of 2016 (4,584 )
Increase in voyage revenues 2,512
Decrease in Management fee income (60 )
Increase in Voyage expenses (31 )
Increase in Vessels operating expenses (53 )
Decrease in Depreciation 75
Decrease in Depreciation of dry docking costs 133
Decrease in Total administrative expenses 44
Decrease in Gain from disposal of subsidiary (2,257 )
Decrease in Other expenses, net 147
Decrease in interest income (5 )
Decrease in Interest expense and finance costs 480
Increase in Foreign exchange losses (126 )
Net loss for the 1sthalf of 2017 (3,725 )
Voyage revenues During the six-month period ended June 30, 2017 and 2016, our Voyage revenues reached $6.3 million and $3.8 million respectively. The 66% increase in Voyage revenues was mainly attributed to the increase in the average time charter rates achieved by our vessels during the first half of 2017 compared to the same period in 2016. Daily Time Charter Equivalent rate (TCE) for the first half of 2017 was $6,133 per vessel per day against $3,097 per vessel per day during the same period in 2016 corresponding to an increase of 98%.
Voyage expenses Voyage expenses reached $0.8 million during the first half of 2017 compared to $0.7 million during the same period last year. Voyage expenses include commissions on revenues, port and other voyage expenses and bunker expenses. Bunker expenses mainly refer to the cost of bunkers consumed during periods that our vessels are travelling seeking employment. Voyage expenses for the first half of 2017 and 2016 are analyzed as follows:
In $000's 2017 2016
Commissions 336 193
Bunkers expenses 341 367
Other voyage expenses 80 166
Total 757 726
Vessel operating expenses Vessel operating expenses, which include crew costs, provisions, deck and engine stores, lubricating oils, insurance, maintenance, and repairs, reached $4.3 million during both the first half of 2017 and 2016. The breakdown of our operating expenses for the six month period ended June 30, 2017 and 2016 was as follows:
2017 2016
Crew expenses 53 % 57 %
Repairs and spares 23 % 16 %
Insurance 8 % 11 %
Stores 7 % 7 %
Lubricants 6 % 5 %
Other 3 % 4 %
Average daily operating expenses during the six-month periods ended June 30, 2017 and 2016 were $4,794 per vessel per day and $4,337 per vessel per day respectively, corresponding to an increase of 11%.
Gain from sale of subsidiary In March 2016, the Company entered into an agreement with Commerzbank to sell the shares of Kelty Marine Ltd., to an unaffiliated third party and apply the total net proceeds from the sale towards the respective loan facility. Based on certain financial conditions agreed beforehand with the Bank this resulted in the remaining principal amount of the loan to be written off. The financial effect from the sale of Kelty Marine Ltd. resulted to a gain of $2.3 million.
Interest expense and finance costs Interest expense and finance costs reached $1 million during the first half of 2017 compared to $1.5 during the same period in 2016. The decrease is mainly attributed to the conversion of $20 million of outstanding principal of two loans to 20 million shares, as described in the Share and Warrant Purchase Agreement that we entered on February 8, 2017. Interest expense and finance costs for the first half of 2017 and 2016 are analyzed as follows:
In $000's 2017 2016
Interest payable on long-term borrowings 874 1,350
Bank charges 18 18
Amortization of debt discount 43 81
Other finance expenses 53 19
Total 988 1,468
Liquidity and capital resources As of June 30, 2017 and 2016, our cash and bank balances and bank deposits were $0.8 million and $0.2 million respectively.
Net cash used in operating activities for the three month period ended June 30, 2017 was $0.1 million compared to $0.3 million during the respective period in 2016. The increase in our cash from operations was mainly attributed to the increase in our adjusted LBITDA from $0.8 million during the second quarter of 2016 to adjusted EBITDA of $0.7 million during the three month period under consideration.
Net cash used in operating activities for the six month period ended June 30, 2017 was $1 million compared to $2.7 million during the respective period in 2016. The increase in our cash from operations was mainly attributed to the increase in our adjusted LBITDA from $2.3 million during the first half of 2016 to adjusted EBITDA of $0.3 million during the six month period under consideration.
Net cash (used in)/generated from financing activities during the three month and six month period ended June 30, 2017 and 2016 were as follows:
Three months ended June 30, Six months ended June 30,
In $000's 2017 2016 2017 2016
Proceeds from issuance of share capital 11 - 25,011 -
Net proceeds from shareholders loan (Firment & Silaner Credit Facilities) - 270 (20,000 ) 3,920
Repayment of long term debt - (2,406 ) (1,406 ) (3,100 )
Restricted cash - 1,750 - 2,250
Dividends paid on preferred shares - - - (14 )
Interest paid (363 ) (507 ) (1,891 ) (824 )
Net cash (used in)/generated from financing activities (352 ) (893 ) 1,714 2,232
As of June 30, 2017 and 2016 we and our vessel-owning subsidiaries had outstanding borrowings under our Loan agreement with Commerzbank AG, the Loan agreement with DVB Bank SE, the Loan agreement with HSH Nordbank AG and our Firment and Silaner Credit Facilities of an aggregate of $44.3 million and $63.7 million respectively gross of unamortized debt discount.
Amended agreements with the banks In March 2017 the Company agreed the main terms for the restructure of its loan agreements with HSH Nordbank AG and DVB Bank SE. By these agreements the Company was successful in achieving waivers and relaxations on its loan covenants as well as defer instalment loan payments due in 2017.
Share and warrant purchase agreement As previously reported, the Company on February 8, 2017 entered into a Share and Warrant Purchase Agreement pursuant to which it sold for $5 million an aggregate of 5 million of its common shares, par value $0.004 per share and warrants to purchase 25 million of its common shares at a price of $1.60 per share to a number of investors in a private placement. These securities were issued in transactions exempt from registration under the Securities Act. On February 9, 2017, the Company entered into a registration rights agreement with those purchasers providing them with certain rights relating to registration under the Securities Act of the Shares and the common shares underlying the Warrants.
In connection with the closing of the February 2017 private placement, the Company also entered into two loan amendment agreements with existing lenders.
One loan amendment agreement was entered into by the Company with Firment Trading Limited ("Firment"), an affiliate of the Company's chairman, and the lender of the Firment Credit Facility, which then had an outstanding principal amount of $18,524. Firment released an amount equal to $16,885 (but left an amount equal to $1,639 outstanding, which continued to accrue interest under the Firment Credit Facility as though it were principal) of the Firment Credit Facility and the Company issued to Firment Shipping Inc., an affiliate of Firment, 16,885,000 common shares and a warrant to purchase 6,230,580 common shares at a price of $1.60 per share. Subsequent to the closing of the February 2017 private placement, Globus repaid the outstanding amount on the Firment Credit Facility in its entirety. The Firment Credit Facility expired on April 12, 2017.
The other loan amendment agreement was entered into by the Company with Silaner Investments Limited ("Silaner"), an affiliate of the Company's chairman, and the lender of the Silaner Credit Facility. Silaner released an amount equal to the outstanding principal of $3,115 (but left an amount equal to $74 outstanding, which continued to accrue interest under the Silaner Credit Facility as though it were principal) of the Silaner Credit Facility and the Company issued to Firment Shipping Inc., an affiliate of Silaner, 3,115,000 common shares and a warrant to purchase 1,149,437 common shares at a price of $1.60 per share. Subsequent to the closing of the February 2017 private placement, Globus repaid the outstanding amount on the Silaner Credit Facility in its entirety. The Silaner Credit Facility remains available to the Company until January 12, 2018.
