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Bermuda Container Line Ltd Release Earnings Report
Hamilton Bermuda – 20 January, 2010 – In a filing to the Bermuda Stock Exchange (BSX) Bermuda Container Line Ltd (the “Company”; Ticker: BCL BH) released the earnings report for the nine months ended 30 September, 2009.
BCL’s net earnings for the nine months ended 30th September 2009 at $2,769,000 were $53,000 or 1.9% below the earnings for the comparable period in 2008. But earnings from shipping operations were down 25% with the difference being made up by a one-off gain from an insurance claim settlement and an improvement in investment income from a small loss in 2008 to a small gain in 2009. Though investment income was positive the investment return is still poor due to the low interest rates.
Earnings from shipping operations were down mainly due to reduced cargo volumes though the Company had to also cope with increased costs in certain areas. For the total Bermuda market eastbound container volume was down 11% compared to the same period in 2008. Ro/Ro and non-containerized volume was up for the period but all this growth was in the first six months of 2009 with the third quarter turning negative for Ro/Ro cargo which continued into the fourth quarter. This recent decline in Ro/Ro cargo volume is a clear signal of the fall-off in the construction industry in Bermuda and expected to continue throughout 2010.
Dividend– first quarter 2010
The Directors of BCL have declared a dividend of 14¢ per share for the first quarter of 2010 payable on 17th February 2010 to shareholders of record as at 10th February 2010.
Proposed corporate reorganization
At the regular quarterly Directors’ meeting held on 19th January 2010 the Board agreed to submit a proposal to the Shareholders of Bermuda Container Line Ltd. for a group reorganization of BCL by way of a Scheme of Arrangement under section 99 of the Companies’ Act 1981.
The reason for this proposed reorganization is that BCL is both an operating and a holding company. Since BCL commenced its operations over 30 years ago, the company has grown significantly in the value of its assets, the complexity of its corporate structure and the diversity of its operations. The Board does not consider the present corporate structure to be in the best interests of shareholders and it believes the operation of the New York to Bermuda freight service should be separated from the holding company function.
It is expected that the formal process will commence at the beginning of March 2010 and complete details and scheme documents will be sent to all shareholders in early March.
Life extension of the M.V. Oleander
The Directors have approved a life extension project for the M.V. Oleander to extend her life in the BCL service for at least another 10 years. One important aim of this project is that it should allow Class surveyors to issue a certificate notation to the effect that the hull of the Oleander is equivalent to a 5-year old ship.
It is expected that the physical work on the Oleander will be undertaken in the latter half of 2010 and the ship itself will be out of service for up to three months as she will be sent to Europe to have the shipyard work performed. During the period the Oleander is out of service a replacement ship will be chartered in to maintain the weekly BCL service.
The Board has approved a budget of up to $7,250,000 for this life extension project.
Contact:
Geoffrey Frith at 294-1411.