Most of the $179.7 million loss was due to impairment losses as the company sold off dry bulk ships operating in international market to reduce debt, according to the ocean carrier’s most recent financial statements.
International Shipholding Corp. reported a net loss of $179.7 million for 2015, with $167.8 million coming in the last quarter of the year, compared with a loss of $54.7 million in 2014 ($49.6 million in the fourth quarter of 2014).
Revenues stood at $259.5 million in 2015 compared with $294.8 in 2014. In the fourth quarter of 2015, the company had revenues of $57.6 million compared with $71 million in the fourth quarter of 2014.
International Shipholding said the net loss of $167.8 million for the fourth quarter of 2015 “was primarily driven by non-cash impairment losses of $149.6 million and other impairment related and non-cash items of $7.5 million.”
“Excluding these non-cash items, the Company’s net loss for the three months ended December 31, 2015 was $10.7 million,” it said. “For the comparable three month period ended December 31, 2014, the Company reported a net loss of $10.0 million after excluding certain non-cash items.”
The company has been reducing its involvement in the international dry bulk business as freight rates and the value of dry bulk ships have plummeted. The company said in the past four months it has concluded 10 transactions and realized gross proceeds of just under $99 million.
“We continue to work through our strategic plan, which, by its very nature, will evolve as we seek to maximize the value of our long-term contracts, strong customer relationships, and extensive industry experience,” Niels M. Johnsen, chairman and chief executive officer of International Shipholding, said of the results. “We firmly believe that our longstanding strategy of focusing on niche market cargo-centric activities is the best path forward.”
The company noted current debt was reduced from $213.7 million to $159.8 million during the fourth quarter.
International Shipholding’s strategic plan previously targeted a debt balance of approximately $85 million to $90 million by June 30, 2016, but it is now projecting that balance in the $100 million to $110 million range. It said the adjustment reflected both market conditions, including lower than expected prices for assets it sold, and the decision to exchange shares in a mini bulker venture for 100 percent ownership of a 2008-built mini bulker.
That ship has a contract through 2021 and the company said, “ We expect to realize accretion through the reassignment of the 100 percent-owned, mini bulker to that long term contract.”
The company is working to improve the results of its Jones Act operations by contracting additional tonnage, increasing vessel utilization, improving efficiency, and eliminating ballast legs.
Manny Estrada, vice president and chief financial officer, said during a call with securities analysts the company has “made all of our regularly scheduled principal, lease and interest payments to all of our lenders. We have maintained total transparency with all of our lenders and maintained open lines of communications with each of them.”
However, Estrada did reveal that on Feb. 9 the company was notified by its senior facilities syndicate of lenders that due to missing a deadline on selling a railroad repair facility and falling below required asset-loan values, it was in technical default of that loan. He said the company still expects to complete the sale of the railway yard.
“While not waiving their rights, the facility has communicated to the company that they will not accelerate their debt service nor seize assets and they will continue to support the company in its efforts to execute its strategic plan and recapitalized,” said Estrada.
International Shipholding Corp. reports $180m loss in 2015
