MCX MC Shipping

MONACO, Nov. 14 /PRNewswire-FirstCall/ -- MC Shipping Inc. (AMEX:MCX) (the "Company"), an international liquefied petroleum gas (LPG) maritime carrier, today reported its financial and operating results for the third quarter and for the nine months ended September 30, 2006. Third Quarter Results For the quarter ended on September 30, 2006, gross revenues (excluding interest income) were $14.1 million, a 43.4% increase from $9.8 million for the quarter ended September 30, 2005. Net income for the third quarter 2006 was $1.3 million or $0.14 per share, compared to net income of $2,9 million or $0.31 per share for the same period in 2005 (see Appendix 1 for the three months financial summary). The Company's net earnings, before certain non-recurring items, such as costs related to excess dry-dock off-hire, change of managers, loss on debt extinguishment and lost income related to late delivery of two vessels, were $3.8 million or $0.40 per share in the third quarter 2006. This figure is 28.9% higher than the similar non-GAAP measure of $2.9 million for the third quarter of 2005 (see below for discussion of these items and reconciliation of net earnings before non-recurring items to net income). The Company believes that such supplementary non-GAAP disclosure of earnings is useful for comparability to the prior year's earnings under normal operating conditions. The Company's earnings before interest, taxes, depreciation and amortization (EBITDA) were approximately $8.2 million and the ratio of EBITDA to interest expense was approximately 3.8 for the quarter ended on September 30, 2006. In the corresponding quarter of 2005, EBITDA was approximately $ 6.8 million and the ratio of EBITDA to interest expense was approximately 5.4. Vessel operating expenses (inclusive of dry-dock amortization) were $5.8 million in the third quarter 2006 compared to $3.8 million in the third quarter 2005. As a percentage of revenue, vessel operating expenses plus amortization of dry-docking costs increased from 39.2% in the third quarter of 2005 to 41.3% in the third quarter of 2006. Tony Crawford, President and CEO of MC Shipping commented on the third quarter results, "This quarter has been very busy for MC Shipping. The Company acquired three mid-size LPG carriers with time charters attached, completed major dry-docks on two vessels, and changed technical managers." Crawford continued, "The acquisitions serve to build an increased presence in the LPG industry with strong partners. The revenue contribution of these three vessels has been significant at about $1.7 million per month. The 24-day delivery delay by the sellers of Tycho Brahe and Immanuel Kant resulted in the receipt of compensation of $613,455, which was recorded as a reduction in purchase price. Had such delivery occurred as planned, net income would have been approximately $450,000 higher. Financing of the acquisition also triggered a write-off of approximately $220,000 in debt issuance costs in relation to old/refinanced debts." "The unusually long and extended drydockings of the La Forge and Galileo, presented some obstacles as they continued much further into the third quarter than originally expected, leading to excess off-hire. The cost of the dry- docks also far exceeded the budgeted amounts. The technical managers responsible have been changed and the vessels are now back in full operation," Crawford added. During the third quarter, the Company transferred the technical management of all its gas vessels to unrelated parties. The change of managers resulted in a concentration of exceptional non-recurring expenses in the third quarter that was estimated to be approximately $688,000. Sale of small LPG tankers The Company also announced that its board and the board of the buyers have approved the sale of six small LPG tankers to a special purpose German KG company to be formed by the German finance house MPC Capital for a total sale price of $52 million. Five vessels will be delivered before year end and the sixth vessel in 2007. The Company will charter back the vessels for a minimum period of four years and reinvest between $5 and $5.75 million in the KG company for 25% of the equity. The total book value of the vessels to be sold was $32.8 million as of September 30, 2006. Upon the sale of the vessels, the Company will prepay the corresponding portion of the New Fortis Loan, which amounted to approximately $22.2 million as of November 14, 2006. After repayment of the debt and reinvestment in the KG company, the net proceeds of the transaction will be approximately $24 million to MC Shipping. The transaction is subject to both parties agreement on remaining contract documentation. "We remain committed to these ships and the industry sector," stated Crawford. "The manager, Hanseatic, will remain unchanged and delivery will be co-coordinated with our long-standing customers such as Statoil, Total and Petredec." "After the investment of over $170 million in new assets in the last 18 months, this envisaged transaction will provide the Company with additional liquidity and an opportunity to capitalize on the increased value of our assets," continued Crawford. "Going forward, we will seek to unlock more of the value, reinvesting in new projects in the same or related sectors." "It has been a quarter of exceptional events. Having finished it with an outline agreement covering this interesting transaction to sell, but retain control of our small LPG fleet, allows us to leave behind the last two quarters, which have been difficult technically. This latest deal would magnify the strength of our asset value and provide the cash to move to the next level," concluded Crawford. Dividend MC Shipping also announced today that its Board of Directors has declared a quarterly cash dividend of $0.0625 per share of common stock payable on February 2, 2007 to shareholders of record as of January 19, 2007. ABOUT MC SHIPPING INC. MC Shipping Inc. is an international shipping company focused on maritime transportation of the liquefied petroleum gas (LPG), with headquarters in Monaco and an office in London. MC Shipping fully or partially owns and operates a fleet of 19 vessels that serve the world's major oil, gas, shipping and trading companies. FORWARD-LOOKING STATEMENTS Except for the historical information contained herein, the matters discussed in this press release could contain forward-looking statements that involve risks and uncertainties that could cause actual results to differ materially from those predicted by such forward-looking statements. MC Shipping Inc. undertakes no obligation to publicly update any forward-looking statement, whether as a result of new information, future events, or otherwise. CONTACTS: MC Shipping Inc. Alexander Gorchakov, +377 97 97 49 90 Thomas J. Rozycki, Jr., Investor Relations Cubitt Jacobs & Prosek Communications 212-279-3115 x208 Appendix 1 Three months financial summary for the period ended September 30th, 2006 and 2005 (US$): 3 months ended 3 months ended 30-Sep-2006 30-Sep-2005 Charterhire and Other Income $14,054,515 $9,796,898 Commission on Charterhire (100,008) (121,415) Vessel Operating Expenses (5,275,131) (3,659,226) Costs related to change of Managers (687,530) - Depreciation and dry-dock amortization (4,520,471) (2,649,480) General and Administrative Expenses (611,120) (469,745) Recognized deferred gain on sale of vessels 1,200,622 1 ,189,597 Net gain on sale of vessels 749 - Equity in losses of associated companies (514,618) (21,478) Operating Income 3,547,008 4,065,151 Interest Expense (2,126,106) (1,255,384) Interest Income 100,446 111,852 Loss on debt extinguishment (220,210) - Net Income $1,301,138 $2,921,619 Net Income per share (basic) $0.14 $0.31 Average Number of shares outstanding 9,508,141 9,366,687 Shareholders equity $46,732,160 $37,856,608 Reconciliation of EBITDA to Net Income Net Income $1,301,138 $2,921,619 Plus: interest expense 2,126,106 1,255,384 Plus: write-off of debt issuance costs 220,210 - Plus: depreciation and amortization 4,520,471 2,649,480 EBITDA $8,167,925 $6,826,483 Reconciliation of net earnings before non-recurring items to Net Income Net Income $1,301,138 $2,921,619 Per share $0.14 $0.31 Plus: Excess dry-dock off-hire 1,106,727 - Plus: Costs related to change of managers 687,530 - Plus: write-off of debt issuance costs 220,210 - Plus: Lost income related to late delivery of two vessels acquired in July 2006 450,000 - Net earnings before non-recurring items $3,765,605 $2,921,619 Per share $0.40 $0.31 Appendix 2 Nine months financial summary for the period ended September 30th, 2006 and 2005 (US$): 9 months ended 9 months ended 30-Sep-2006 30-Sep-2005 Charterhire and Other Income $34,102,754 $25,664,119 Net Income $7,035,902 $7,830,373 Net Income per share $0.74 $0.75 Reconciliation of net earnings before non-recurring items to Net Income Net Income $7,035,902 $7,830,373 Per share $0.74 $0.75 Plus: Excess dry-dock off-hire 1,790,886 - Plus: Costs related to change of managers 687,530 - Plus: write-off of debt issuance costs 220,210 - Plus: Lost income related to late delivery of two vessels acquired in July 2006 450,000 - Net earnings before non-recurring items $10,184,528 $7,830,373 Per share $1.08 $0.75 DATASOURCE: MC Shipping Inc. CONTACT: Alexander Gorchakov of MC Shipping Inc., +377 97 97 49 90, ; or Thomas J. Rozycki, Jr., Investor Relations of Cubitt Jacobs & Prosek Communications, +1-212-279-3115 x208,

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