For the year, the I.M. Skaugen Group (IMS) reported a net result of USD16.7 million (USD10.6 million in 2006). The result on an EBITDA basis was USD40.2 million (USD34.6 million in 2006). The Group’s gross revenues totalled USD236.1 million (USD206.6 million in 2006).
The profit for the year includes gain from disposal of vessels of USD4.3 million and a profit from sale of Mei Wen Ti, the first Summergas vessel constructed by SMC, of USD5.3 million.
The Group’s tax cost for the year amounted to USD4.2 million compared to USD0.3 million in 2006. Only USD0.7 of the tax cost is payable and USD3.5 million of the tax cost is changes in recognition of deferred tax assets.
Net cash flow from the operations in 2007 is negative with USD25.3 million compared with a positive net cash flow from the operations in 2006 of USD20.3 million. The newbuilding activities with the Summergas and Wintergas vessels (classified as projects under construction in current assets) are the main reasons for the negative cash flow from the operations. These vessels will be delivered in 2008/2009 and thus improve the cash flow from the operations. As of 31 December the group had USD63 million tied up in working capital for the Summergas and Wintergas vessels. For the Multigas vessels under constructions the Group had tied up USD27.7 million in prepayments to various vendors.
Total assets were USD456 million. Shareholders` equity amounted to USD124.2 million or USD4.55/NOK24.77 per share. Shareholders` equity represents about 27 per cent of the total assets. The net debt at the end of 2007 was USD52 million and the net interest-bearing debt totalled USD170 million. The ratio between current assets and current liabilities is 444 per cent.
Total liquidity as of the end of 2007 was USD110 million, which is regarded as sufficient for the company’s ongoing business activities. The working capital requirements will in the future be higher than in the past due to our newbuilding (SMC) activities. Interest coverage ratio (EBITDA / Net interest cost) was 3.7 for the year 2007, as against 3.5 for 2006.
Financing
I.M. Skaugen SE completed a Bond Issue (IMSK04) managed by First Securities / Swedbank Markets. The first tranche in the bond issue will be an amount of NOK600 million. The maximum amount in the loan is NOK1,000 million.
The new bond is a 5 year, unsecured bond. The currency exposure has been swapped to USD through a currency and interest swap with an interest rate of 3-month NIBOR + 2.50 per cent point p.a. Use of the proceeds is for general purposes, a partial refinancing through the re-purchasing of a portion of the current bond program and financing of additional growth within the company.
Thus IMS now has three bond programmes in USD outstanding.
Dividend
At the Annual General meeting on 3 March 2008, the Board will recommend a dividend payment of NOK1.75 per share (NOK1.75 in 2007 and NOK2.50 in 2006). This dividend represents approximately 3 per cent direct yield on the share price of NOK 56.00 at year-end.
Parent Company
On the 20 December 2006 I.M. Skaugen ASA was transformed from a Norwegian Joint Stock Public Company (ASA) to a European Joint Stock Public Company (Societas Europea, "SE-Company"). The new name is I.M. Skaugen SE. The rational for the transformation to an SE company was to achieve flexibility with regards to further internationalization of the Company in the future.
I.M. Skaugen SE showed a result of NOK54 million. The company has NOK91 million in free equity available for dividend payment.
The Board proposes the following allocations (NOK million):
- dividend distribution: NOK48 million
- transfer to other equity: NOK 6 million
The total equity for the company after allocations is NOK481 million, of which NOK43 million is free equity available for dividend payment.
The Board finds that the assumptions for future and continued operations have not been changed as the basis for approving the 2007 accounts and as a consequence these annual accounts are based on the going-concern assumptions in accordance with §3-3 of the Norwegian Accounting Act.