TTS Reports Improvement in 1Q

TTS Group reported an operating profit before depreciation of NOK 1.2 million, compared to a loss of NOK 27.5 for the same period last year. – Two of our three divisions showed solid operations and good results. As expected, it will take some time to increase turnover and improve results in the Energy division, says Johannes D. Neteland, President and CEO.

Meanwhile, at the start of the second quarter, the Energy division received a letter of award from PetroVietnam Marine Shipyard Company, regarding the delivery of a drilling equipment package for a jack up rig currently under construction at the shipyard. The contract, which is expected to be signed during the second quarter, is worth approximately NOK 130 million.

As of 2010, TTS has gathered its activities in three operative units; Marine, Port and Logistics and Energy. – Following a weak 2009, the operating profit before depreciation is overall positive. We view the coming months with a level-headed optimism, maintains Neteland.

The TTS group's total turnover in the first quarter was NOK 818 million, a decrease of 23 percent from the same period last year. The group reported a pre-tax loss of NOK 38.2 million, compared to a loss of NOK 152.9 million after the first three months of 2009. The net result was a loss of NOK 25.8 million, compared to a loss of NOK 136.4 million the year before. The order backlog for the quarter was NOK 454

Marine division

The Marine division supplies equipment for cargo handling and cargo access on vessels. Turnover for the first quarter was NOK 610 million, an increase of 12 percent compared to the first tree months of 2009. The division reported an operating profit
before depreciation of NOK 34.7 million, compared to NOK 32.8 million in the same period last year.

The Marine division's order backlog at the end of March was NOK 3 337 million, a decrease of NOK 461 million since the start of the year. These figures include 50 percent of the order backlog in the joint ventures TTS Hua Hai Ships Equipment, TTS Bohai Machinery and TTS Keyon in China.

- We see an increase in contracting of new vessels within some segments, and accordingly, we expect an increased demand for cranes and other cargo handling equipment for vessels. TTS is well positioned in China, whose shipbuilding industry has a highly competitive edge.

Port and Logistics division

The Port and Logistics division supplies production lines and systems for cargo handling in shipyards and other industries, and loading and handling systems for ports. Turnover in the first quarter was NOK 76 million, an increase of 16 percent compared to the same period last year. The division’s operating profit before depreciation was NOK 5.6 million, compared to NOK 4.6 million after the first three moths last year. A higher level of activity in the service marked and sale of several new linkspan projects are the leading causes of this growth in turnover and results. The Port and Logistics division's order backlog at the end of March was NOK 208
million, a decrease of NOK 34 million since the start of the year.

Energy division

The Energy division supplies offshore cranes and winches, drilling equipment for offshore rigs and complete drilling rigs for land-based drilling. Turnover for the first three months of 2010 was NOK 133 million, a decrease of 71 percent compared to the same period in 2009. The division noted an operating loss of NOK 38.6 million, compared to NOK 65.3 million after the first quarter of 2009.

At the end of the first quarter, the order backlog was NOK 407 million, a decrease of NOK 63 million since the beginning of the year. At the start of the second quarter, a letter of award was received from PetroVietnam Marine Shipyard Company, regarding the delivery of a drilling equipment package for a jack up rig currently under construction at the shipyard. The contract, which is expected to be signed during the second quarter, is worth approximately NOK 130 million. Due to a low order backlog and a weak market, 2010 is expected to be demanding year for the Energy division.

Capital situation

TTS is purposefully focusing on reducing the balance sheet of the group, e.g. by the sale of canceled products. The group is in negotiation with its main banking partners for the adjustment of its current credit limit, and an agreement is expected to be
entered into during the second quarter.

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