2012 Interim Results

H1 2012 Financial Results

Press Release 6 September 2012

HELLENIC CARRIERS REPORTS 2012 INTERIM UNAUDITED RESULTS

Hellenic Carriers Limited, ("Hellenic" or the "Company") (AIM: HCL), an international provider of marine transportation services, which owns and operates through its wholly owned subsidiaries a fleet of three dry bulk vessels that transport iron ore, grain, steel products and minor bulk cargoes, reports today its Interim Unaudited Results for the six months ended 30 June 2012.

The Company's management team will be holding a conference call and webcast today, at 2pm (London), 4pm (Athens) and 9am (New York) to discuss the results.

H1 2012 FINANCIAL AND OPERATIONAL HIGHLIGHTS

Þ Revenue US$8.9 million (H1 2011: US$20.8 million)

Þ EBITDA1 US$0.5 million (H1 2011: US$12.2 million)

Þ Operating Loss US$4.8 million before non-cash items (H1 2011: US$5.5 million Operating Profit before non-cash items)

Þ Net Loss US$7.3 million excluding non-cash items (H1 2011: US$3.1 million Net Income excluding non-cash items)

Þ Non-cash impairment charge US$4.1 million (H1 2011: US$ nil)

Þ Non-cash gain on sale of vessel US$2.3 million (H1 2011: US$ nil)

Þ Gearing ratio2 at 28.6% as of 30 June 2012 (30.2% as of 31 December 2011)

Þ Total cash, including restricted cash of US$50.9 million as of 30 June 2012 (US$48.0 million, as of 31 December 2011)

Þ Reduction of Gross debt to US$84.9 million on 30 June 2012 (US$88.2 million on 31 December 2011) resulting in a net debt position of US$33.9 million as of 30 June 2012 (US$40.1 million as of 31 December 2011)

Þ Time Charter Equivalent rate of US$8,338 (H1 2011: US$21,397) in line with market average earnings for the period

Þ Operation of a fleet of 4.8 vessels on average compared to 5.0 vessels in H1 2011

Management Commentary

During H1 2012, a particularly challenging period for the dry bulk shipping market, management took certain steps to set the foundations for the Company's future development. In particular, we sold the two older vessels of the fleet, namely the M/V Hellenic Sky and the M/V Hellenic Sea, for a total consideration of US$15.4 million. Furthermore, we secured from our lenders the option to use such sale proceeds within 2013 as debt financing towards the acquisition of modern second hand bulk carriers. Last, but not least, we extended the term of the current loan facilities thereby significantly lightening the principal installments due henceforth.

The results of the strategy adopted are twofold. On the one hand we facilitate cash preservation amidst an environment of depressed returns and limited liquidity. On the other hand, we secure financing for the acquisition of second hand ships within an extended time frame, at levels which are approaching the last decade's lows and during times when bank debt is either unavailable or offered on the basis of very unfavorable terms. We believe that the expansion of the fleet through the acquisition of attractively priced ships prepares the Company for the next cycle and enhances its future profit generation capacity.

We decided to act in the pre-emptive manner described above, since in our opinion the dry bulk market will continue to be challenging in the medium term. The current market levels are justified when the constant inflow of new buildings against a softening global economy is taken into account. Both of these factors are not expected to subside in the near future. It will take some time before the new tonnage is absorbed, while scrapping of the older fleet continues. And although demand for dry bulk commodities from the developing countries remains solid, the prospects of the mature economies are uncertain and may temporarily affect the growth potential of the emerging economies.

However, we should not lose sight of the positive signs for the future of our market. The developing economies still have a long way to go until they meet their targets in order to improve the living conditions of their populations. This means continued need for imports of raw materials. The dry bulk fleet, although expanded and renewed during the last 4 years, still encompasses a significant percentage of over aged ships, which are bound to be scrapped. At the same time, limited and expensive credit has a dampening effect on new orders for dry bulk vessels.

In this environment our Company has taken steps towards the right direction. We are well positioned not only to endure the challenging market conditions, but also to take advantage of the real opportunities which will arise in order to expand our fleet and enhance shareholder value.

Fleet Developments

On 16 May 2012, Thasos Shipping Co. Ltd. ("Thasos"), the ship owning company of the M/V Hellenic Sky completed the sale of the 68,591 dwt Panamax vessel built in 1994 at Sasebo Heavy Industries in Japan. The M/V Hellenic Sky was sold to an unaffiliated third party at a price of US$10.1 million.

The vessel was acquired in July 2003 at a price of US$13.2 million. During the past nine years of its operation, the vessel contributed approximately US$19.4 million to the Company's net profit. Taking into account the net book value of the vessel and the sale related expenses, the Company realised a net book gain of approximately US$2.3 million on this sale.

Subsequent to the period ended 30 June 2012, the 65,434 dwt Panamax dry bulk carrier, M/V Hellenic Sea, built in 1991 at Jiangnan Shipyard in China, was sold to an unaffiliated third party for a total cash consideration of US$5.3 million. The vessel was delivered to the buyers on 23 August 2012.

The vessel was acquired in March 2002 at a price of US$9.6 million. During the past ten years of its operation, the vessel contributed approximately US$40.6 million to the Company's net profit. Taking into account the vessel's net book value and expenses related to the sale, the Company expects to realise a net book loss of approximately US$0.2 million on this sale.

The Company's intention is to use the proceeds from the sale of the two vessels towards future acquisition opportunities in the dry bulk sector. In particular, the lenders of M/V Hellenic Sky and M/V Hellenic Sea have agreed to transfer the proceeds from the sale as bank financing towards the acquisition of modern second hand bulk carriers, within a period of 18 months and 12 months from the vessels' delivery to the buyers respectively.

Further to the above mentioned sale, as at the date of this release, the Company owns and operates through its subsidiaries a fleet of three dry bulk carriers comprising one Panamax, one Supramax and one Handymax with an aggregate carrying capacity of 169,116 dwt and a weighted average age of 15.2 years.

Current fleet details:

In addition, there are two Kamsarmax vessels on order at Zhejiang Ouhua Shipbuilding Co. Ltd., in China with contractual delivery dates January and March 2013. The two ships have an aggregate carrying capacity of about 164,000 dwt.

Loan facility agreements securing financing of up to 65% of each vessel's market value upon delivery or maximum US$22.1 million per vessel have been signed. Such amounts shall be drawn down upon delivery of each new building vessel from the shipyard. The Company has no further financial commitments to the shipyard until delivery of the vessels in 2013.

Details of vessels on order:

Following the delivery of the two Kamsarmax vessels, the Company will own and operate through its subsidiaries a diversified fleet of five dry bulk carriers comprising two Kamsarmaxes, one Panamax, one Supramax and one Handymax with an aggregate carrying capacity of about 333,116 dwt and a weighted average age of 9.5 years (as of 31 March 2013).

Fleet Deployment

During H1 2012, the Company opted to employ the vessels in the spot market for the performance of either single or consecutive laden legs or under short term time charter agreements. In some cases repositioning of the vessels was conducted in order to achieve more attractive time charter rates. The fleet utilisation during the period was reported at 90.8%.

The current Fleet Deployment is summarized below:

H1 2012 Results

For the six months ended 30 June 2012, Hellenic reported total revenues of US$8.9 million compared to US$20.8 million for the same period of 2011. The decrease in revenues is mainly attributed to the reduction in the number of vessels operated during the period following the sale of the M/V Hellenic Sky in May 2012 and the prolonged depression of the dry bulk freight rates. We note that during the period under review the Baltic Dry Index (BDI) averaged at 943 points compared to 1,372 points in 2011 marking a decrease of 31.3.%.

Operating loss amounted to US$6.6 million for the period ended 30 June 2012 compared to an operating profit of US$5.5 million for the same period of 2011. The operating loss figure for the six months ended 30 June 2012 included a non-cash impairment charge of US$4.1 million and a non-cash book gain resulting from the sale of the M/V Hellenic Sky amounting to US$2.3 million.

Selected Financial Data:

 (1) EBITDA has been calculated as follows: Operating profit + Depreciation + Depreciation of dry-docking costs + Impairment

charge - Gain on sale of vessel

As a result of the significant drop in asset values an impairment indication was identified and the relevant tests were performed in order to determine the vessels' recoverable amounts. As a conclusion the book values of three vessels were adjusted to their recoverable amounts and an impairment charge of US$4.1 million was recorded. The non-cash items recorded in the respective period of 2011 amounted to US$ nil.

Excluding the above mentioned non-cash items, Hellenic reported for the six months ended 30 June 2012 an operating loss of US$4.8 million compared to US$5.5 million operating profit reported for the six months ended 30 June 2011.

The net loss for the period ended 30 June 2012 amounted to US$9.2 million representing a loss per share of US$0.20 calculated on 45,616,851 weighted average number of shares, whereas, the net profit for the period ended 30 June 2011 amounted to US$3.1 million representing a profit per share of US$0.07 calculated on 45,616,851 weighted average number of shares.

Fleet Operating Data:

(1) Ownership days are the cumulative days in a period during which each vessel is owned by the respective vessel owning company.

(2) Available days are ownership days less the days that the vessels are at scheduled off-hire for maintenance or vessel repositioning.

(3) Operating days are the available days less all unforeseen off-hires.

(4) Fleet utilisation is measured by dividing the vessels' operating days by the vessels' available days.

(5) TCE is defined as vessels' total revenues less voyage expenses divided by the number of the available days for the period.

(6) Average daily vessel operating expenses is defined as vessel operating expenses divided by ownership days.

During the six months ended 2012 the Company, through its subsidiaries, operated 4.8 vessels which earned on average US$8,338 per day compared to 5.0 vessels and average earnings of US$21,397 per day in H1 2011.

Earnings before Tax, Interest, Depreciation and Amortisation (EBITDA) was reported at US$0.5 million for the six months ended 30 June 2012 compared to US$12.2 million for the same period of 2011.

The Company's general and administrative expenses for the six months ended 30 June 2012 dropped by 30% to approximately US$0.7 million compared to US$1.0 million for the same period of 2011.

As a result of the decrease in ownership days, vessel operating expenses dropped by US$0.2 million to a total of US$4.7 million. However, daily operating expenses increased marginally to US$5,397 from US$5,370. This increase is partly attributed to higher insurance costs, crew costs and lubricants.

Debt / Financing Activities & Capitalisation

Debt as of 30 June 2012 amounted to US$84.9 million compared to US$88.2 million as of 31 December 2011.

In view of the prolonged market downturn affecting the fleet's cash generation from operating activities, the Company and its subsidiaries came into an agreement with their lenders to restructure the debt obligation and lighten up the repayments falling due in the forthcoming two years.

In relation to the first loan facility agreement the lender has agreed to restructure the loan repayment schedule effective from 1 January 2012. The term of the loan was extended for 3 years, the new maturity date being May 2018. In addition, we were provided the option to transfer the proceeds from the sale of the M/V Hellenic Sky towards the acquisition of a modern second hand bulk carrier, within a period of 18 months from the vessel's delivery to its buyers.

Subsequently to the reporting date, the second lender provided the option to transfer the proceeds from the sale of the M/V Hellenic Sea as bank financing towards the acquisition of a modern second hand bulk carrier, to be acquired within a period of 12 months. Further to this agreement, if a new vessel is acquired during the 12 month period, the tenor of the loan shall be extended for 4 years with the new maturity being May 2020.

The principal debt repayment for the years 2012 and 2013 amounts to US$5.7 and US$4.6, respectively and in case the options are not exercised a prepayment equal to the proceeds from the sale of the two vessels is due to be made to the Banks in late 2013.

An earnings recapture clause has been agreed under both loan facilities based on which part of any excess earnings generated by the vessels will be paid to the lending banks commencing from financial year 2012.

Restricted cash reported at 30 June 2012 amounted to US$13.8 million. This amount consists of i) US$10.1 million being the proceeds from the sale of M/V Hellenic Sky which are held in a pledge account for the purpose described above, ii) US$0.3 million being funds held in retention account for the repayment of the next installment due under one of the existing loan agreements, and iii) US$3.4 million retained against issuance of a bank guarantee of US$3.1 million. This bank guarantee was provided as security to Setsea SpA, the former charterers of the vessel M/V Hellenic Sea, pending the outcome of arbitration proceedings already commenced in London between the owners and charterers on the occasion of the vessel's grounding in the Amazon River in July 2010. Input from legal advisors is supportive to the owners' position therefore, as at today, the Company has not recorded a provision in the interim financial statements.

As of 30 June 2012, debt (debt, net of deferred financing fees) to total capitalisation (debt and stockholders' equity) amounted to 50.1% compared to 48.7% as of 31 December 2011. Net debt (debt less cash and cash equivalents) to total capitalisation amounted to 28.6% on 30 June 2012 compared to 30.2% on 31 December 2011.

Total cash, including restricted cash amounted to US$50.9 million as of 30 June 2012 and US$48.0 million as of 31 December 2011.

Post balance sheet events

On 23 August 2012, the M/V Hellenic Sea was sold and delivered to her new owners as per details outlined above.

Dividend

In order to reinforce the Company's liquidity and optimize the use of cash as market opportunities arise, the Directors of the Company did not recommend an interim dividend payment.

Conference Call details

Participants should dial into the call 10 minutes prior to the scheduled time using the following numbers: 0800-953-0329 (UK Toll Free Dial-in), 00800-4413-1378 (Greece Toll Free Dial-in), 1-866-819-7111 (U.S. Toll Free Dial-in), or +44 (0)1452-542-301 (Standard International Dial-in). Please quote "Hellenic Carriers".

A telephonic replay of the conference call will be available until 13 September 2012 by dialling 0800-953-1533 (UK Toll Free Dial-in), 1-866-247-4222 (US Toll Free Dial-in), or +44 (0)1452-550-000 (Standard International Dial-in). Access Code: 36347958#

Slides and audio webcast:

There will also be a live and then archived webcast of the conference call, accessible through the Hellenic Carriers website (www.hellenic-carriers.com). Participants to the live webcast should register on the website approximately 10 minutes prior to the start of the webcast.

For further information please contact:

Hellenic Carriers Limited

Fotini Karamanli, Chief Executive Officer

Elpida Kyriakopoulou, Chief Financial Officer

E-mail: [email protected] +30 210 455 8900

Panmure Gordon (UK) Limited

Andrew Godber +44 (0) 20 7459 3600

Capital Link 

Nicolas Bornozis +1 212 661 7566 (New York)

Eleni Theodoropoulou +44 (0) 20 3206 1320 (London)

E-mail: [email protected] 

Further Information - Notes to Editors

About Hellenic Carriers Limited

Hellenic Carriers Limited manages through Hellenic Shipmanagement Corp. a fleet of dry bulk vessels that transport iron ore, coal, grain, steel products, cement, alumina, and other dry bulk cargoes worldwide. The fleet consists of three vessels, comprising one Panamax, one Supramax and one Handymax with an aggregate carrying capacity of 169,116 dwt and a weighted average age of 15.2 years plus two new building vessels currently on order, both Kamsarmaxes with an aggregate carrying capacity of about 164,000 dwt.

Hellenic Carriers is listed on the AIM of the London Stock Exchange under ticker HCL.

INTERIM CONSOLIDATED INCOME STATEMENT

For the six months ended 30 June 2012

(Amounts expressed in thousands of U.S. Dollars, except share and per share data)

INTERIM CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOMEFor the six months ended 30 June 2012

(Amounts expressed in thousands of U.S. Dollars)

INTERIM CONSOLIDATED STATEMENT OF FINANCIAL POSITION

As at 30 June 2012

(Amounts expressed in thousands of U.S. Dollars)

INTERIM CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

For the six months ended 30 June 2012

(Amounts expressed in thousands of U.S. Dollars, except share and per share data)

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INTERIM CONSOLIDATED STATEMENT OF CASH FLOWS

For the six months ended 30 June 2012

 (Amounts expressed in thousands of U.S. Dollars)