SeaMetric Posts Third Quarter Financial Results
SeaMetric has reported a net loss in Q3 2008 of NOK 23.5 million (NOK 6.2 million in Q3 2007), consisting of a combination of an operating loss of NOK 6.8 million (an operating profit of NOK 1.2 million) and a loss on financial items of NOK 16.8 million (NOK 7.4 million).
SeaMetric's operating loss in Q3 2008 reflects the administration costs for the SeaMetric organization. Some, but not all, of the operating expenses are capitalized on the TML project. In Q3 2007, operating expenses for the first nine months of that year were capitalized, resulting in an operating profit for the quarter viewed in isolation.
SeaMetric has financial income in Q3 2008 of NOK 2.4 million (NOK 1.1 million), consisting of interest income from the company's cash balances. The Q3 2008 financial expenses of NOK 19.2 million (NOK 8.5 million) consist of the interest expenses on the US $60 million bond issue which are not capitalized on the TML project, as well as a net currency loss on the USD denominated debt due to the quarter’s rise in the NOK/USD exchange rate.
For the first nine months of 2008, SeaMetric has a net loss of NOK 31.3 million (NOK 10.3 million for the first nine months of 2007). The operating loss so far this year is NOK 16.2 million (NOK 9.0 million), while the loss on financial items is NOK 15.1 million (NOK 1.3 million).
SeaMetric's cash and bank deposits at September 30, 2008 total NOK 226 million (corresponding to US $39 million), of which NOK 93 million (US $16 million) is in an escrow account controlled by Norsk Tillitsmann ASA, the trustee for SeaMetric's bond issue. The escrow amount is to be released when needed for the shipbuilding project.
SeaMetric has considerable flexibility in the timing of the payments for the various types of equipment to be installed on the two vessels. SeaMetric's cash level during Q3 2008 decreased by NOK 6 million, reflecting the quarter’s investments in the TML vessels. The fall in the NOK cash level was mitigated by the rise in the NOK/USD exchange rate, as a major part of SeaMetric's cash balances are held in USD.
SeaMetric's book equity ratio is 39.5%, a Q3 2008 decline from 45.0%.
The Stavanger District Court has ruled in favor of SeaMetric regarding the claim from the shipbroker firm Lorentzen & Stemoco of payment of broker's fee in connection with entering into a construction contract for the two TML vessels. In addition, Lorentzen & Stemoco have to cover SeaMetric's legal costs of approximately NOK 0.5 million. Lorentzen & Stemoco has appealed against the verdict.
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