Gains on vessel sales boost Hoegh’s half-year profits

Gains on vessel sales boost Hoegh’s half-year profits

   Gains on the sale of ships boosted otherwise lackluster half-year profit results at Leif Hoegh, the Scandinavian roll-on/roll-off and liquefied natural gas (LNG) shipping group.

   The company’s operating profit after sales gains on fixed assets rose 42 percent to $97 million in the first half of 2005, up from $68 million. The improvement came from gains totaling $42 million, including those from the sale of Hoegh’s remaining open hatch vessels and its Capesize bulk carriers.

   But Hoegh’s operating profit before sales gain and depreciation decreased 17 percent to $72 million in the first half, from $87 million in the first six months of 2004.

   Hoegh said the car-carrier market “continues to be very strong,” with large cargo volumes in most trades, but the LNG market “is still weak and a number of vessels are presently idle.” Hoegh subsidiary Hoegh Autoliners has a fleet of 50 ro/ro vessels in its commercial operation and has ordered 11 large ro/ro ships to be delivered by 2008. The shipowner also operates four LNG carriers and has two such vessels on order.

   Hoegh reported a 10 percent rise in freight revenues for the half-year period, to $425 million. It did not disclose its net profit results.

   Set to expand its business, Hoegh in June secured a $900 million revolving credit facility. The debt facility will be used to repay outstanding amounts, finance both the ongoing newbuilding program and further growth opportunities, the company said.