Recently,Excel Maritime Carriers Ltd. (EXM), a global dry bulk carrier, declared its better-than-expected financial results for the fourth quarter of 2011. GAAP net loss in the fourth quarter of 2011 was $167.8 million or $1.95 per share compared with a net income of $63.6 million or 76 cents per share in the year-ago quarter. However, quarterly adjusted (excluding special-items) EPS of a loss of 24 cents beats the Zacks Consensus Estimate by a penny.
Quarterly total revenue was $82.8 million compared with $158 million in the prior-year quarter. This huge reduction was primarily attributable to extremely volatile freight environment of the global drybulk shipping industry. Nevertheless, quarterly Voyage revenue of approximately $81.9 million was well above the Zacks Consensus Estimate of $73 million. In the reported quarter, Time Charter Equivalent (TCE) per day was $16,474 compared with $22,440 in the prior-year quarter.
Quarterly total operating expenses were nearly $92.9 million, up 1.7% year over year. Operating loss in the reported quarter was $10.1 million compared with an operating income of $66.6 million in the year-ago quarter. Quarterly adjusted EBITDA was $34.6 million, down 44.1% year over year. An average of 47 Excel Maritime vessels were operated during the fourth quarter of 2011 compared with 48 in the year-ago quarter. Management announced that the company secured under time charter employment of 61% for its entire fleet and 100% for capsize vessels for the fiscal year ending December 31, 2012.
In 2011, Excel Maritime generated $104.4 million of cash from operations compared with $158.5 million in 2010. Free cash flow (cash flow from operations less capital expenditure) in 2011 was $65.8 million compared with $77.2 million in 2010. At the end of 2011, Excel Maritime had $53.8 million of cash & cash equivalents compared with $65.9 million at the end of 2010. Total debt, at the end of 2011, was $1,154 million compared with $1,154 million at the end of 2010. At the end of 2011, debt-to-capitalization ratio was 0.37, remaining same year over year.
Recommendation
Excel Maritime operates under highly competitive drybulk shipping industry. Its main competitors are Diana Shipping Inc. (DSX), Genco Shipping & Trading Ltd. (GNK), and DryShips Inc. (DRYS). We maintain our long-term Underperform recommendation on Excel Maritime. This was primarily attributable to the stiff reduction of drybulk spot freight rate in the recent past. Currently, the company holds a short-term Zacks #5 Rank (Strong Sell) on the stock.
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