28th Aug 2015 17:54
LONDON (Alliance News) - Goldenport Holdings Inc Friday said it has failed to reach terms with an unnamed bidder that made a takeover approach for the company as it tries to navigate its way through a difficult downturn in the market after reporting a significantly wider loss in the first half of the year.
The international shipping company said its independent directors held discussions with the bidder, which offered a price of GBP1.20 per share that valued Goldenport at GBP11.2 million back in June, but "failed to reach agreement".
On top of the collapse of that deal, the company said the market is facing its biggest downturn in decades and said there is a "glimmer of hope" that the market will improve in 2017.
"We are navigating through what is arguably the worst dry bulk market of the last 30 years and the long-awaited, sustainable recovery is unlikely to materialize in the near term," said the company.
Goldenport reported a net loss of USD14.7 million in the first six months of 2015, significantly wider than the USD1.4 million net loss a year earlier as revenue fell by a quarter to USD18.5 million from USD24.7 million.
Earnings before interest, tax, depreciation and amortisation came in at USD4.4 million, over a 40% fall from USD7.6 million.
Revenue fell after the company reduced its fleet of trucks and container vessels. It only had 13 container vessels in the first half compared to 15 a year ago as older ships were decommissioned. The company said it does not plan to decommission any more ships in the coming months.
"However, the reduction in fleet size that has strengthened the liquidity position of the company, has also taken its toll on its cash flow generation capacity, and we will continue to face challenges in the event that dry cargo charter rates do not improve," it said.
The wider net loss, however, was mainly attributable to impairments of three old container ships of USD3.3 million and a USD7.7 million impairment against the M/V Ermis and M/V Alpine Trader vessels, which are currently up for sale.
"The market outlook remains fairly muted and volatile due to uncertainties over Brazilian exports and Chinese demand, as well as the overhang from a large number of newbuilding vessels that are due to be delivered until the end of 2016," it said in a statement.
"There is a glimmer of hope for 2017, provided that owners continue to resist tempting approaches from loss-making shipyards and, hence, new-building ordering activity remains subdued," it added.
Goldenport also warned that that the recent collapse in scrap prices by more than 25% to less than USD300 per tonne has brought scrapping activity to "an abrupt halt after having reached record levels" in the first half of 2015, suggesting scrapping activity will be almost non-existent in the second half of the year.
"We have taken all steps available to us to position the company to weather the current storm, including proceeding with the sale of several older and less efficient vessels, restructuring our bank facilities to reflect the current trading environment and de-levering our balance sheet, while maintaining a competitive operating cost base," said Goldenport.
Goldenport shares closed down 1.7% to 128.83 pence per share on Friday.
By Joshua Warner; [email protected]; @JoshAlliance
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