Rickmers Maritime posts net loss for FY2015

HIT by non-cash impairments, Rickmers Maritime reported a US$129.6 million net loss for the fourth quarter ended Dec 31, from a net profit of US$11.2 million in a year-ago period.

The business trust incurred US$126.3 million of impairment of vessel, and US$2.1 million of goodwill impairment. Its revenue also slumped 24 per cent to US$24 million.

The business trust is not making a distribution for the fourth quarter ended Dec 31. It had distributed 0.6 US cents per unit in the year-ago period.

"The trustee-manager has taken the prudent step to suspend distributions in November 2015 to conserve cash, with the aim to resume when it is in a position to do so sustainably," Rickmers Maritime said on Friday.

For the full year, Rickmers Maritime's net loss deepened to US$129.2 million from US$16 million in fiscal 2014. The results were again impacted by the non-cash impairment charge on vessel and goodwill of US$148 million for FY2015, up from US$63 million for FY2014.

Excluding the impact of impairment loss, profit for the year would have been US$18.8 million in 2015 compared with US$47 million in 2014.

PricewaterhouseCoopers, auditors of Rickmers Maritime, flagged material uncertainties related to the going concern of the business trust in an "emphasis of matter". These uncertainties stemmed mainly from some US$179.7 million of loans from a syndicate of banks consisting HSH Nordbank AG and DBS Bank Ltd (HSH Lenders) and medium-term notes of US$70.6 million which are due for repayment on March 31, 2017 and May 15, 2017 respectively.

The trustee-manager is presently in discussion with its lending banks to extend the loan maturity of the US$179.7 million bank loan and is exploring alternative refinancing for the MTN.

"Should the negotiations with the HSH Lenders be unfavourable or alternative refinancing of the MTN be unsuccessful, the group and the trust may have insufficient cash to repay the bank loans and MTN on March 31, 2017 and May 15, 2017 respectively," PwC said.

But the trustee-manager stressed that it has been successful in resolving covenant issues in the past and "will take all necessary actions to resolve the matter in the event of a breach of covenants".