General Maritime Corporation Announces First Quarter 2010 Financial Results

NEW YORK, April 28 /PRNewswire-FirstCall/ -- General Maritime Corporation (NYSE: GMR) today reported its financial results for the three months ended March 31, 2010.

Financial Review:  2010 First Quarter

The Company recorded a net loss of $9.1 million or $0.16 basic and $0.16 diluted loss per share for the three months ended March 31, 2010 compared to net income of $18.9 million or $0.35 basic and $0.34 diluted earnings per share for the three months ended March 31, 2009.  The decrease in net income was primarily due to a 21% decrease in our fleet TCE compared to the prior year period, as well as increased direct vessel operating expenses relating to the $1.1 million write-offs of certain insurance claims not deemed to be collectible for the three months ended March 31, 2010.

John Tavlarios, President of General Maritime Corporation, commented, "During a challenging time for the tanker industry, General Maritime continued to achieve a level of stability in its results based on the Company's sizeable time charter coverage. In order to continue to best serve shareholders, we also took decisive steps to further increase our contracted revenue streams during the first quarter. As we progress through 2010, we will concentrate on meeting three important objectives. First, in an effort to maximize cash flows, we will seek to maintain an appropriate balance of time charter coverage and spot exposure through the implementation of our flexible fleet deployment strategy. Second, we will continue to strive to achieve the highest operational standards for leading oil majors and shipping companies. Finally, we will continue to seek to generate strong results for shareholders by implementing our long-term growth strategy and opportunistically redeploying General Maritime's cash flow."

Net voyage revenue, which is gross voyage revenues minus voyage expenses unique to a specific voyage (including port, canal and fuel costs), decreased 21% to $65.9 million for the three months ended March 31, 2010 compared to $82.9 million for the three months ended March 31, 2009. This was primarily due to an increase in voyage expenses from $9.4 million for the three months ending March 31, 2009, to $31.7 million for the three months ending March 31, 2010.  This increase in voyage expenses was due to higher bunker costs as well as an increase in percentage of spot market operating days for the first quarter 2010, compared to the prior year period.  EBITDA for the three months ended March 31, 2010 was $32.1 million compared to $48.7 million for the three months ended March 31, 2009 (please see below for a reconciliation of EBITDA to net income). Net cash provided by operating activities was $20.0 million for the three months ended March 31, 2010 compared to $25.7 million for the prior year period. As of March 31, 2010, the Company's net debt (calculated as total long term debt less cash) was $952.8 million.

The average daily time charter equivalent, or TCE, rates obtained by the Company's fleet decreased by 21% to $24,321 per day for the three months ended March 31, 2010 compared to $30,724 for the prior year period. The Company's average daily rates for vessels on spot charters decreased by 2% to $25,911 for the three months ended March 31, 2010 compared to $26,445 for the prior year period.

Total vessel operating expenses, which are direct vessel operating expenses and general and administrative expenses, decreased by 2% to $34.0 million for the three months ended March 31, 2010 from $34.7 million for the three months ended March 31, 2009. Total vessel operating expenses is a measurement of the Company's total expenses associated with operating its vessels.  Daily direct vessel operating expenses increased to $8,696 for the quarter ended March 31, 2010 compared to $8,238 for the prior year period primarily due to  the write-offs of certain insurance claims not deemed to be collectible, which amounted to $1.1 million and related primarily to the Company's Aframax vessels. Daily direct vessel operating expenses associated with the Company's Aframax vessels increased 7.8% to $9,531 for the three months ended March 31, 2010 compared to $8,841 for the prior year period, due primarily to the write-offs mentioned above. Daily direct vessel operating expenses associated with the Company's Panamax and Handymax vessels increased for the three months ended March 31, 2010 compared to the prior year period primarily due to technical management contractual fee increases, as well as certain vessels ending their fixed rate technical management contracts with Northern Marine, which were assumed by the Company as part of the Arlington acquisition, and incurring higher costs thereafter.  Daily direct vessel operating expenses on the VLCC and Suezmax vessels were flat from the prior year quarter.  

General and administrative costs decreased by 17% to $9.7 million for the quarter ended March 31, 2010 compared to $11.7 million for the prior year period. This decrease was primarily due to a decrease in corporate expenses associated with a reduction in personnel and the termination of the Company's aircraft lease. Offsetting this decrease were $0.9 million in fees incurred during the first quarter of 2009 in connection with legal proceedings involving the Genmar Defiance.  

Summary Consolidated Financial and Other Data

The following table summarizes General Maritime Corporation's selected consolidated financial and other data for the three months ended March 31, 2010 and 2009 as well as selected consolidated balance sheet data as of December 31, 2009.  Attached to this press release is an Appendix, which contains additional financial, operational and other data for the three months ended March 31, 2010 and 2009.

General Maritime Corporation's Fleet

General Maritime Corporation's fleet is comprised of 31 wholly owned tankers, consisting of 2 VLCC, 11 Suezmax, 12 Aframax 2 Panamax and 4 Products tankers, with a total carrying capacity of approximately 4 million deadweight tons, or dwt. The average age of the Company's fleet as of March 31, 2010 by dwt was 9.9 years compared to 8.9 years as of March 31, 2009.  

As of March 31, 2010, the Company had 2 VLCC, 5 Suezmax, 3 Aframax, 2 Panamax and 4 Handymax tankers under time charter contracts. These vessels represented 52% of the 31 vessels in the Company's fleet.

The table below outlines the employment of the Company's fleet with respect to vessels employed under time charter contracts having terms of more than six months.

Q1 2010 Dividend Announcement

On April 27, 2010 the Company's Board of Directors declared a Q1 2010 quarterly dividend of $0.125 per share payable on or about May 28, 2010 to shareholders of record as of May 14, 2010. Under the Company's dividend policy, the Company intends to declare quarterly dividends with a target amount of $0.125 per share.  The declaration of dividends and their amount, if any, will depend upon the results of the Company and the determination of the Board of Directors.

Jeff Pribor, Chief Financial Officer of General Maritime Corporation, commented, "Our intense focus on preserving the Company's long-term financial strength and flexibility positions General Maritime to take advantage of growth opportunities. During a time when the Company continues to distribute dividends to shareholders, we intend to actively pursue additional acquisition opportunities. In accomplishing this critical long-term goal, we intend to further our successful track record of consolidating the industry and will not waiver from our demonstrated approach of  pursuing acquisition opportunities that continue to meet strict return requirements."  

About General Maritime Corporation

General Maritime Corporation is a leading provider of international seaborne crude oil transportation services. General Maritime also provides transportation services for refined petroleum products. General Maritime's vessels operate principally within the Atlantic basin, which includes ports in the Caribbean, South and Central America, the United States, West Africa, the Mediterranean, Europe and the North Sea. General Maritime also currently operates tankers in other regions including the Black Sea and Far East. General Maritime owns a fully double-hull fleet of 31 tankers - two Very Large Crude Carriers, twelve Aframax, eleven Suezmax tankers, two Panamax and four Handymax product tankers - with a total carrying capacity of approximately 4.0 million dwt.

All per share amounts presented throughout this press release, unless otherwise noted, have been adjusted to reflect the exchange of 1.34 shares of the Company's common stock for each share of common stock held by shareholders of General Maritime Subsidiary Corporation (formerly known as General Maritime Corporation) in connection with the Arlington acquisition.

Conference Call Announcement

General Maritime Corporation announced that it will hold a conference call on Thursday, April 29, 2010 at 10:00 a.m. Eastern Daylight Savings Time to discuss its 2010 first quarter financial results. To access the conference call, dial (913) 312-0824 and enter the passcode 4692198. A replay of the conference call can also be accessed until May 13, 2010 by dialing (888) 203-1112 for U.S. callers and (719) 457-0820 for international callers, and entering the passcode 4692198. The conference call will also be simultaneously webcast and will be available on the Company's website, www.GeneralMaritimeCorp.com. The Company intends to place additional materials related to the earnings announcement, including a slide presentation, on its website prior to the conference call.

"Safe Harbor" Statement Under the Private Securities Litigation Reform Act of 1995

This press release contains forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are based on management's current expectations and observations. Included among the factors that, in the Company's view, could cause actual results to differ materially from the forward looking statements contained in this press release are the following: loss or reduction in business from the Company's significant customers; the failure of the Company's significant customers to perform their obligations owed to us; changes in demand; a material decline in rates in the tanker market; changes in production of or demand for oil and petroleum products, generally or in particular regions; greater than anticipated levels of tanker newbuilding orders or lower than anticipated rates of tanker scrapping; changes in rules and regulations applicable to the tanker industry, including, without limitation, legislation adopted by international organizations such as the International Maritime Organization and the European Union or by individual countries; actions taken by regulatory authorities; actions by the courts, the U.S. Coast Guard, the U.S. Department of Justice or other governmental authorities and the results of the legal proceedings to which the Company or any of its vessels may be subject; changes in trading patterns significantly impacting overall tanker tonnage requirements; changes in the typical seasonal variations in tanker charter rates; changes in the cost of other modes of oil transportation; changes in oil transportation technology; increases in costs including without limitation: crew wages, insurance, provisions, repairs and maintenance; changes in general domestic and international political conditions; changes in the condition of the Company's vessels or applicable maintenance or regulatory standards (which may affect, among other things, the company's anticipated drydocking or maintenance and repair costs); changes in the itineraries of the Company's vessels; adverse changes in foreign currency exchange rates affecting the Company's expenses; and other factors listed from time to time in the Company's filings with the Securities and Exchange Commission, including, without limitation, its Annual Report on Form 10-K for the year ended December 31, 2009 and its subsequent reports on Form 8-K.  The Company's ability to pay dividends in any period will depend upon factors including applicable provisions of Marshall Islands law, restrictions under the Company's existing Credit Facility and indenture governing the Company's Senior Notes and the final determination by the Board of Directors each quarter after its review of the Company's financial performance.  The timing and amount of dividends, if any, could also be affected by factors affecting cash flows, results of operations, required capital expenditures, or reserves.  As a result, the amount of dividends actually paid may vary.

SOURCE General Maritime Corporation