The following tables set forth financial and operating data relating to the Group for the periods indicated.
The selected financial information presented in this section has been derived from our audited combined financial statements as of 31 December 2004, 2005 and 2006 prepared in accordance with IFRS. The selected financial information in the tables below should be read together with “Risk Factors”, “Selected Combined Financial Data”, “Management’s Discussion and Analysis of Results of Operations and Financial Condition” and our historical audited combined financial statements, including the notes thereto contained elsewhere in this Prospectus. For more information on our combined financial statements and the preparation thereof, see, “Presenta- tion of Financial and Other Information”.
IFRS differ in certain respects from U.S. GAAP. For a description of certain differences between IFRS and U.S. GAAP, see “Annex A—Summary of Certain Significant Differences Between IFRS and U.S. GAAP”.
Combined Income Statement Data 2004 2005 2006
Year ended 31 December ($ in millions)
Revenue . . . 153.9 253.4 299.6 Voyage costs . . . (13.9) (31.7) (56.3)
Time charter equivalent earnings . . . . 140.0 221.8 243.3
Other direct operating costs . . . (94.7) (111.6) (133.5)
Gross Profit . . . . 45.3 110.2 109.8
Profit on disposal of vessels . . . — — 30.0 Depreciation . . . (10.0) (21.3) (22.1) Reversal of impairment . . . — — 0.1 Administrative expenses . . . (4.0) (6.0) (5.9)
Operating Profit . . . . 31.2 82.8 111.9 Net financing costs . . . (7.5) (16.9) (17.6)
Profit on Ordinary Activities Before Taxation . . . . 23.7 65.9 94.3
Taxation charge . . . (5.5) (7.5) (8.9)
Net Profit . . . . 18.2 58.4 85.4
Combined Balance Sheet Data 2004 2005 2006
As of 31 December ($ in millions)
Fixed assets . . . 206.8 317.9 365.5 Current assets . . . 46.1 44.0 58.3
of which
Cash and cash equivalent . . . 7.7 10.5 13.9
Total assets . . . . 252.9 361.9 423.8
Current liabilities . . . 131.7 141.0 84.0 of which
Short-term financial debt . . . 115.2 126.0 53.0 Non-current liabilities . . . 114.6 167.3 197.9
of which
Long-term financial debt . . . 111.7 161.5 187.7
Total liabilities . . . . 246.3 308.3 281.9 Capital and reserves . . . . 6.6 53.6 141.9
The following table provides certain information relating to our fleet which we consider in assessing our operating performance. The following operating data are not measurements of performance under IFRS or U.S. GAAP, and you should not consider any of them as an
alternative to (a) the financial information included in this Prospectus (as determined in
accordance with generally accepted accounting principles), or (b) any other measures of perfor- mance under generally accepted accounting principles. We believe that the following measure- ments are measures commonly reported and widely used by investors in evaluating the
performance of companies operating in the shipping industry, which can vary significantly depending upon accounting methods or non-operating factors. Accordingly, the following measurements have been disclosed in this Prospectus to permit a more complete and compre- hensive analysis of our operating performance. Because companies do not calculate such measurements identically, our presentation of them may not be comparable to similarly titled measures used by other companies. Accordingly, undue reliance should not be placed on the following operating data.
Other operating data 2004 2005 2006
Year ended 31 December
Total
TC equivalent earnings per employment day (net of
commissions)($)(1). . . 18,776 20,458 20,885 TC equivalent earnings per employment day excluding B-Types(2)
(net of commissions)($) . . . 19,681 21,070 21,071 Daily OPEX($)(3) . . . 5,539 5,486 5,707 TC days/available vessel days(%)(4) . . . 49.8% 51.3% 45.7% Off-hire days/available vessel days(%)(5). . . 4.3% 2.0% 2.2% Off-hire excluding dry-dock and exceptional events/available vessel
days(%)(6). . . 0.3% 0.6% 0.3%
MR
TC equivalent earnings per employment day (net of
commissions)($)(1). . . 19,421 21,197 21,088 Daily OPEX($)(3) . . . 5,727 5,490 5,731 TC days/available vessel days(%)(4) . . . 61.5% 56.3% 47.3%
Handysize
TC equivalent earnings (net of commissions)($)(1) . . . 18,143 19,010 20,264 TC equivalent earnings per employment day excluding B-Types(2)
(net of commissions)($) . . . 20,125 20,657 21,011 Daily OPEX($)(3) . . . 5,351 5,480 5,642 TC days/available vessel days(%)(4) . . . 38.8% 42.7% 42.1%
(1) TC equivalent earnings per employment day net of commissions. This figure represents time charter (“TC”) equivalent earnings for vessels employed on the spot market and time charter contracts, divided by the number of on-hire days, less commissions charged by commercial managers and external brokers. Calculations for handysize vessels also exclude chartered vessels in which we have a partial interest, since distributions paid by the pool on these vessels are net of charter expenses, and would therefore require pro-forma adjust- ments to make it comparable to the remaining vessels. We believe that excluding vessels in which we have a partial interest from our calculation does not significantly alter the average daily TC equivalent earnings of our handysize fleet, which we employ through the Handytankers Pool. In particular, vessel earnings for the Handytankers Pool depend primarily on pool points and the average pool points of the vessels excluded from our calculation was 103.1, compared to the average pool points of vessels included in our calculation, which was 103.9. TC equivalent earnings per employment day is a measure of how well we
manage our fleet strategically, by choosing the right timing to fix vessels on term contracts and commercially, by finding the most attractive employment opportunities for vessels on the spot market.
(2) TC equivalent earnings per employment day excluding B-Types. This figure represents TC equivalent earnings, divided by the number of on-hire days, for all handysize vessels except B-Type vessels. B-Type vessels were substantially smaller and of an older age than the remainder of our fleet, and were sold in 2006. Excluding them from the calculations allows us to see how vessels similar to those we currently operate, performed.
(3) Daily OPEX. This represents the cost of operating owned and bareboat chartered vessels. It includes technical expenses, the cost of lube oils, crewing, insurance, technical management and other sundry operating expenses directly incurred in relation to the ownership of the vessel. This figure excludes the cost and depreciation of dry-docks. Since expenses arising from equipping a ship for delivery are capitalised, reducing a vessel’s technical expenses in the year of delivery, we have excluded ships during their first year of operations from our average daily costs.
(4) TC days/available vessel days (coverage ratio). This figure represents how many vessel days were employed on time charter contracts, inclusive of off-hire days, divided by the number of available vessel days, defined as the number of days between delivery and redelivery for all of our vessels, for the fiscal year being considered. To calculate TC days for vessels employed within the High Pool, we first had to calculate the ratio of TC days/available vessel days (the pool coverage ratio) for all vessels employed within the pool, from each of our vessels’ pool entry dates. The number of TC days for a vessel was then determined as the product of the pool’s coverage ratio since that vessel’s pool entry and the number of days that vessel was operated within the pool. For vessels employed within Glenda Interna- tional Management, the results from vessels are not pooled; we therefore used contractual commitments of each individual vessel to determine its coverage ratio. For vessels employed within the Handytankers Pool, we are not responsible for administrative functions and therefore have access to less detailed operating data, compared to the High Pool. TC days for these vessels was therefore determined using the average pool coverage ratio for the fiscal year being considered, rather than the ratio from the entry date of each of our vessels.
(5) Off-hire days/available vessel days. This figure is equal to the ratio of the total off-hire days—inclusive of dry-docks and off-hires due to exceptional events such as a collision or a ship’s seizure—and the total number of available vessel days, which is defined as the number of vessel days between delivery and redelivery for the fiscal year being considered. (6) Off-hire excluding dry-dock and exceptional events/available vessel days. This figure is
equal to the ratio of the off-hire days—exclusive of dry-docks and exceptional events such as a collision or the seizure of a ship and the total number of vessel days, which is defined as the number of vessel days between delivery and redelivery for the fiscal year being considered. This figure serves as an indicator of the quality of the technical management service provided by d’Amico Società di Navigazione S.p.A. and of our management’s ability to select vessels from first class operators.