Trico Marine Provides 2Q07 Interim Update
Trico Marine expects charter hire revenues for the three-month period ended June 30, 2007 to be in the range of $57 million to $59 million. However, increased maintenance and classification (M&C) expense that results from higher than expected dry docking costs in the second quarter and increased general and administrative (G&A) expenses will result in higher than anticipated costs for the second quarter, resulting in operating income for the same period in the range of $4 million to $6 million.
M&C work was completed on four North Sea class vessels during the second quarter compared to one North Sea class vessel in the first quarter. To satisfy customer requirements, one dry-docking was delayed from the first quarter to the second quarter and another dry-docking was accelerated from the third quarter to the second quarter. One North Sea class vessel was dry docked due to a customer request to upgrade the diving capability of the vessel and resulted in a new five-year contract at attractive charter rates. The contract commenced in the second quarter of 2007. These dry dockings were all a result of regulatory class work. As a result of strong customer demand in the North Sea, higher shipyard and labor costs and a lack of availability within shipyards generally, the Company experienced higher average dry-docking costs on these vessels than had been incurred on previous dry dockings. The combined effect of this strong customer demand, the increase in number of dry dockings and costs associated with these dry dockings was an increase in M&C expenses of $5 million compared with the first quarter, as well as a loss of revenue during such dry dockings. Second quarter M&C expenses are anticipated to include over half of the North Sea class vessels that were scheduled for dry-docking in 2007.
In addition, the Company incurred expenses related to its recently completed successful proxy contest and the pursuit of an acquisition opportunity that has not led to a completed transaction. As a result, total G&A expenses of approximately $10 million to $11 million during the second quarter will be higher than the first quarter 2007.