Baltic Trading Limited yesterday reported its financial results for the three months ended March 31, 2012.
The Company recorded a net loss for the first quarter of 2012 of $4.5 million, or $0.20 basic and diluted loss per share. Comparatively, for the three months ended March 31, 2011, the Company recorded a net loss of $1.7 million, or $0.08 basic and diluted loss per share.EBITDA was $0.3 million for the three months ended March 31, 2012 versus $3.0 million for the three months ended March 31, 2011.
John C. Wobensmith, President and Chief Financial Officer, commented, "During the first quarter, we continued to implement our fleet deployment strategy that provides the ability to generate significant operating leverage when the freight rate environment improves. While market conditions remain challenging, we continue to benefit from a strong balance sheet with low debt and cost-effective operations. For the first quarter, we declared a dividend of $0.05 per share, representing our eighth consecutive dividend since going public in March 2010. Going forward, we will maintain our focus on maximizing the utilization of our modern, high-quality fleet and seeking to distribute a substantial portion of our cash flows to shareholders."
Baltic Trading Limited's revenues decreased to $6.3 million for the three months ended March 31, 2012 compared to $9.5 million for the three months ended March 31, 2011 due to lower spot market rates achieved by our vessels during the first quarter of 2012.
The average daily time charter equivalent, or TCE, rates obtained by the Company's fleet was $7,521 per day for the three months ended March 31, 2012 as compared to $11,530 per day for the three months ended March 31, 2011. The decrease was due to lower spot rates achieved by the vessels in our fleet during the first quarter of 2012 versus the first quarter of 2011. The reduction of iron ore cargoes due to the celebration of the Chinese New Year combined with increased deliveries of newbuilding vessels through March of this year contributed to a weakened freight rate environment for the first quarter of 2012.
Total operating expenses were $9.7 million for the three months ended March 31, 2012 compared to $10.1 million for the three months ended March 31, 2011. Vessel operating expenses were $3.9 million for the three months ended March 31, 2012 and 2011. General, administrative and technical management fees decreased to $1.3 million in 2012 from $1.8 million during the comparative period in 2011 primarily due to lower non-cash compensation. Depreciation and amortization expenses for the first quarter of 2012 increased to $3.7 million from $3.6 million during the first quarter of 2011.
Daily vessel operating expenses, or DVOE, marginally decreased to $4,788 per vessel per day for the first quarter of 2012 from $4,848 per vessel per day for the same period the prior year. We believe daily vessel operating expenses are best measured for comparative purposes over a 12 month period in order to take into account all of the expenses that each vessel in our fleet will incur over a full year of operation. Based on estimates provided by our technical managers and management's expectations, we expect DVOE for 2012 to be $5,300 per vessel per day on a weighted average basis.
Liquidity and Capital Resources
Cash Flow
Net cash used in operating activities for the three months ended March 31, 2012 was $0.2 million as compared to net cash provided by operating activities of $1.7 million for the three months ended March 31, 2011. The decrease in cash provided by operating activities was primarily a result of a recorded net loss of $4.5 million as compared to a net loss of $1.7 million for the quarter ending March 31, 2011. Lower net income was primarily due to lower charter rates achieved in the 2012 period versus the prior year for the vessels in our fleet.
No cash was used in investing activities during the three months ended March 31, 2012 as our entire fleet was delivered to us by the end of 2011. For the three months ended March 31, 2011, cash used in investing activities was $1.0 million which was for purchases of vessel related equipment.
Net cash used in financing activities for the quarter ended March 31, 2012 was $3.0 million and consisted of cash dividends paid during the quarter. For the three months ended March 31, 2011, cash used in financing activities was $3.9 million and primarily consisted of $3.8 million of cash dividends paid.
Capital Expenditures
We make capital expenditures from time to time in connection with vessel acquisitions. Our fleet consists of two Capesize, four Supramax, and three Handysize vessels with an aggregate capacity of approximately 672,000 dwt.
In addition to acquisitions that we may undertake in future periods, we will incur additional capital expenditures due to special surveys and drydockings for our fleet. None of our vessels were drydocked in the first quarter of 2012, and we do not currently expect any of our vessels to be drydocked during the remainder of 2012 and 2013.
Dividend Announcement and Policy
The Company's Board of Directors declared a dividend for the first quarter of 2012 of $0.05 per share payable on or about May 17, 2012 to all shareholders of record as of May 10, 2012. Our dividend policy is to pay a variable quarterly dividend equal to our Cash Available for Distribution, during the previous quarter, subject to any reserves our board of directors may from time to time determine are required. The application of the formula in our policy would not have resulted in a dividend for the first quarter of 2012. However, our Board of Directors nonetheless determined to declare a $0.05 per share dividend after taking into account our cash flow and our liquidity and capital resources. Dividends will be paid equally on a per-share basis between our common stock and our Class B stock. Cash Available for Distribution represents our net income less cash expenditures for capital items related to our fleet, such as drydocking or special surveys, other than vessel acquisitions and related expenses, plus non-cash compensation. For purposes of calculating Cash Available for Distribution, we may disregard non-cash adjustments to our net income, such as those that would result from acquiring a vessel subject to a charter that was above or below market rates. We intend to pay dividends on a quarterly basis.
The declaration and payment of any dividend will be subject to the discretion of our board of directors. The timing and amount of dividend payments will depend on our earnings, financial condition, cash requirements and availability, fleet renewal and expansion, restrictions in our loan agreements, the provisions of Marshall Islands law affecting the payment of distributions to shareholders and other factors. Our board of directors may review and amend our dividend policy from time to time in light of our plans for future growth and other factors.
Source: Baltic Trading Ltd.