EXM Excel Maritime Carriers Ltd.

Excel Maritime Carriers Ltd. (EXM) declared mixed financial results for the second quarter of 2012. GAAP net loss in the reported quarter was $33.4 million or a loss of 37 cents per share compared with a net loss of $16 million or 19 cent per share in the year-ago quarter. However, quarterly adjusted (excluding special-items) earnings per share of a loss of 41 cents were wider than the Zacks Consensus Estimate of a loss of 38 cents.

Quarterly total revenue was $64.1 million compared with $92.8 million in the prior-year quarter. This massive decline was primarily attributable to an extremely volatile freight environment of the global drybulk shipping industry. Nevertheless, quarterly Voyage revenue of approximately $63.1 million strides ahead of the Zacks Consensus Estimate of $56 million. In the reported quarter, Time Charter Equivalent (TCE) per day was $12,871 compared with $18,932 in the prior-year quarter.

Quarterly total operating expenses were nearly $82.5 million, down 13.3% year over year. Operating loss in the reported quarter was $18.4 million compared with $2.4 million in the year-ago quarter. Quarterly adjusted EBITDA was $17.7 million, down by a substantial 59.7% year over year. An average of 47 Excel Maritime vessels were operated during the second quarter of 2012 compared with 48 in the year-ago quarter. Management announced that the company secured under time charter employment of 83% for its entire fleet and 100% for capsize vessels for fiscal 2012.

During the first half of 2012, Excel Maritime generated $4.2 million of cash from operations in stark contrast to $71.4 million in the year-ago quarter. Free cash flow in the reported period was $4.1 million compared with $51.4 million in the prior-year period.

At the end of the second quarter of 2012, Excel Maritime had a little over $27.2 million of cash & cash equivalents compared with $53.8 million at the end of 2011. Total debt, at the end of the previous quarter, was $1,031.4 million compared with $1,154 million at the end of 2011. At the end of the reported quarter, debt-to-capitalization ratio was 0.39 compared with 0.37 at the end of 2011.

Recommendation

Excel Maritime operates under highly competitive drybulk shipping industry. The company’s main competitors are Diana Shipping Inc. (DSX), Genco Shipping & Trading Ltd. (GNK), and DryShips Inc. (DRYS). We maintain our long-term Neutral recommendation on Excel Maritime. Currently, the company holds a short-term Zacks #3 Rank (Hold) on the stock.

 
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