Record results now 'history' for TBS

Joseph E. Royce, chairman, chief executive officer and president, stated: "Our record 2008 financial results have quickly become history. Since the last quarter of 2008 we have been experiencing a dramatic decline in the global economy, and we now operate in a completely different financial and economic environment, without clear visibility as to when the turmoil will end.

"The near term effects of this dramatic decline have been devastating on the dry cargo shipping industry. The freezing of the credit markets and the virtual elimination of letters of credit which are the traditional financing mechanism of global trade have caused a significant decrease in the volume of cargo transported thereby affecting freight rates, vessel utilization and asset values."

The NASDAQ-listed operator of tweendeckers and bulkers has reported net income of USD34.6 million for last year's fourth quarter versus USD35.2 million for the same period in 2007. For the full year 2008, net income increased to USD191.8 million, from USD98.2 million in 2007. 

In the past several months, TBS says that it has taken a series of proactive and defensive initiatives to address these challenging times, including:

• Suspending the purchase of additional second-hand vessels.
• Proceeding with plans to construct six Roymar Class 34,000 dwt multipurpose (MPP) tweendeckers that were contracted in February 2007, with delivery of the first vessel (the M.V. Rockaway Belle) expected in June 2009.
• Cancelling contingent arrangements to build 12 additional Roymar Class 34,000 dwt MPP tweendeckers in order to conserve cash resources and limit new debt. These cancellations were effected without cost or penalties to TBS.
• Completing the multi-year accelerated vessel upgrade and drydock programme.
• Cancelling year-end bonuses accrued by the Company, aggregating USD15 million.
• Freezing salaries for our officers and office staff at 2008 levels.
• Concluding agreements with our lenders to obtain covenant waivers applicable to all of our outstanding loans for the calendar year 2009.

In December last year, TBS took delivery of the Zia Belle, previously known as the CEC Cardigan. This vessel is a 1997 built, 8,492 dwt heavy lift multipurpose tweendecker with two 150 tons cranes, combinable to 300 tons.

TBS' current fleet comprises 47 vessels, with an aggregate of 1,398,965 dwt, consisting of 24 multipurpose tweendeckers and a combination of 23 handysize and handymax bulk carriers.