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NCL board recommends
acceptance of Star/Carnival bid
Earlier today, Arrasas Ltd today acquired 11,540,147 shares
in NCL Holding ASA, representing another 4.3% of the stock, at
a price of NOK 35. Arrasas is the vehicle created for Star Cruises'
take-over of NCL. Carnival Corporation and Star announced earlier
this week that Carnival would take a 40% holding in Arrasas.
This latest stock acquisition took the
Star/Carnival stake in NCL to 143,969,321 million shares or 53.8%
of the the total fully diluted number of shares and the Board
of NCL Holdings is now recommending acceptance of the Star/Carnival
offer.
Stolt-Nielsen
sees end to parcel tanker glut
"With the demand for transportation services now starting
to improve, we expect to see a reduction in the oversupply of
parcel tankers," says Jacob Stolt-Nielsen, chairman and
CEO of Stolt-Nielsen S.A.
The company today reported results for
the fourth quarter and the year ended November 30, 1999. Net
income for the latest quarter was $15.4 million, or $0.28 per
Common and Class B share, on net operating revenue of $446.2
million, compared with net income of $13.7 million, or $0.25
per share, on net operating revenue of $502.2 million for the
fourth quarter in 1998. Adjusted for a non-recurring gain of
$11.0 million for the recognition of a tax net operating loss
carryforward in Stolt Sea Farm in Norway, net income for the
fourth quarter of 1999 was $4.4 million.
Net income for the year ended November
30, 1999 was $46.9 million, or $0.86 per Common and Class B share,
on net operating revenue of $1,780.9 million, compared with net
income of $96.3 million, or $1.76 per share, on net operating
revenue of $1,796.6 million for the same period in 1998. Adjusted
for non-recurring items, net income was $35.3 million compared
with $78.6 million or $1.44 per Common and Class B share, for
the same period of 1998
Commenting on the results, Jacob Stolt-Nielsen
called 1999 "a difficult year in our transportation business
due to an over supply of capacity." In thesubsea services
business "demand fell because of significantly reduced oil
field development in some parts of the world." In contrast,
continuingimprovement by the seafood business was "very
gratifying. "
Stolt-Nielsen said his prediction last
year that SNTG would lose money in
1999 had proven too pessimistic. "We earned a modest income
from operations of $60.2 million, down from $98.4 million in
1998. During the year there was some recovery in demand for our
services. Unfortunately, the surplus of parcel tankers continued
to depress rates as ships, which had been ordered before the
Asia Pacific crisis in 1997/98, entered the market. "
Improvement was evident in the fourth quarter
"as we saw signs of firming in contract and spot markets
for tankers and strong recovery in demand for our tank containers."
Profits in the Stolthaven Terminal division
increased, helped by a higher contribution from the expanded
terminal in Santos, Brazil and fanew joint venture companies
in Asia Pacific.
"In 1999," said Stolt-Nielsen,
"we continued to implement our strategy of building a global
network. Our Stolt Parcel Tanker division has entered into a
joint venture in the U.S. flag chemical market with Marine Transportation
Corporation Inc. Our Stolt Tank Container division formed a network
alliance with TransAmerica Leasing Inc., bringing together the
largest tank container operator and the largest tank container
lessor in the world. We continue to expand our Asia Pacific terminal
network, through our minority interest in Dovechem Terminal Holdings
Ltd., with terminals in China, Malaysia and Indonesia, and through
the acquisition of a 50% interest in Jeong II Tank Terminal (JTT)
in South Korea."
In fiscal 1999, the company took delivery
of five newbuildings, totaling 124,100 dwt. An additional six
newbuildings are scheduled for 2000. These deliveries will bring
to an end a23-ship, $1.2 billion newbuilding program,
Commenting on Stolt Comex Seaway (SCS),
Stolt-Nielsen said that low oil prices in the second half of
1998 and first quarter of 1999 led to substantial reductions
in oil company expenditure on field development and maintenance
throughout 1999. This was further exacerbated by the wave of
oil company mergers that meant other work was delayed while the
merging companies sorted out their future priorities.
"This has resulted in a substantial
decrease in SCS's profit for 1999 to $16.2 million from $57.3
million in 1998."
"In 1998 we set a strategy of expanding
SCS's capabilities with the goal of becoming the global leader
in the offshore construction market. The acquisition of ETPM
in December 1999, together with the acquisition of a 49% stake
in NKT Flexibles I/S, added to last year's purchase of Ceanic,
has accomplished this goal. These acquisitions bring skilled
people and a strong presence in the fast growing deepwater markets
of West Africa, Brazil and the U.S. Gulf. Reflecting these significant
changes, at the Annual General Meeting in April 2000, SCS will
be renamed "Stolt Offshore S.A."
In the fiscal 2000 first quarter ended
February 29, 2000, SNSA will realize a non-recurring, non-operating
gain of approximately $35 million from the dilution of its interest
in SCS as a result of the SCS Class A shares issued as
consideration to GTM (the former owner of ETPM) and NKT Holdings
A/S (our joint venture partner in NKT Flexibles I/S). Later this
month, SNSA will convert $100 million of debt owed by SCS to
SNSA into SCS Class A Shares. As a result of the above, SNSA
will increase its interest in SCS from 45% to 48%.
In 1999 Stolt Sea Farm (SSF) had income
from operations of $27.9 million almost doubling the $14.2 million
achieved in 1998.
Outlook:
"With the demand for transportation services now starting
to improve, we expect to see a reduction in the oversupply of
parcel tankers. Nonetheless, given the lag between improved demand
and improved freight rates, the delay before higher rates are
reflected in contract renewals, and an increase in interest cost
of about $18 million resulting from the newbuilding program,
we are not expecting any significant improvement in SNTG's results
in 2000. For SCS, the main challenge will be a rapid integration
of ETPM. During 2000, the significant synergies we forecast will
be offset by one-off charges so that SCS will also produce a
modest result unless field development activity recovers quicker
than we anticipate. SSF should continue to make steady progress
in its existing operations and we will search for further acquisitions.
"
NNS
reports increased earnings
Newport News Shipbuilding ( today reported net earnings of $24
million, or $0.69 per diluted share, for the fourth quarter of
1999. Earnings before interest and taxes (EBIT) for the quarter
were $55 million, up ten percent over last year's fourth quarter.
For the full year, diluted earnings per
share were $2.31 after adjusting for gains associated with merger
break-up fees and insurance settlements. This represents a 25
percent increase over the prior year's EPS of $1.85. Excluding
the non-recurring
events, EBIT advanced to $193 million on revenues of $1.86 billion
versus EBIT of $175 million for 1998 on comparable revenues.
Adding the positive one-time events that benefited 1999, EPS
totaled $2.72 and EBIT was $218 million.
Newport News posted fourth quarter revenues
of $538 million, which is consistent with the volume reported
in 1998. Fleet Services revenues increased $29 million from last
year's fourth quarter, reflecting a planned shift of resources
from the Construction segment. The volume in Fleet Services was
driven by activity on the aircraft carrier Nimitz and maintenance
work on the aircraft carrier Enterprise. The growth in EBIT for
the quarter to $55 million was attributable to the higher volume
in Fleet Services and improved margins in the Construction segment.
For the year, revenues were $1.86 billion,
consistent with the level reported in 1998. EBIT improved from
$175 million in 1998 to $193 million after adjusting for the
non-recurring items in 1999. Including the one-time events, 1999
EBIT increased to $218 million. Again, the volume gains in Fleet
Services and the strengthened margins in Construction contributed
to the EBIT increase.
Newport News says it experienced robust
activity in each of its segments during 1999.
In the Construction segment, work
accelerated on the aircraft carrier Ronald Reagan and the Virginia-class
submarine program. Reagan, the ninth in a planned class of ten
Nimitz-class carriers, is nearly 60 percent complete and will
be delivered to the Navy in early 2003.
Construction on Virginia and Texas, the
first two ships in the planned class of 30 submarines, continued
to progress well under an innovative teaming arrangement. Virginia,
the first ship in the class, is scheduled for delivery in 2004.
Fleet Services had
an active year with the $1.2 billion refueling and overhaul of
the aircraft carrier Nimitz representing the most significant
program in the segment. In the fourth quarter, Newport News completed
the refueling phase
of this project. Nimitz is scheduled for re-delivery to the Navy
in the second quarter of 2001. Also in the quarter, the final
major phase of the inactivation of the submarine USS Narwhal
was completed on schedule. Other notable Fleet Services work
accomplished during the year included the $50 million contract
for post delivery work on the carrier Harry S. Truman and the
$88 million overhaul of Enterprise.
The Engineering segment has begun
significant design workon the new propulsion plant for CVN(X),
the next class of carriers. Newport News is also supporting design
activities for emerging technologies on the Virginia-class submarine
program, and
continues to provide engineering services for existing classes
of attack submarines.
Newport News says that CVN 77, the transition
ship to the next class of carriers, is expected to be fully funded
in the Fiscal Year 2001 Defense Budget. Newport News will use
this contract to expand its role as a total ship integrator by
leading the integrated warfare systems acquisition plan for CVN
77, a role previously performed by the Navy.
The outlook in Fleet Services is characterized
by steady carrier refueling business. Newport News is working
under a $405 million planning contract for the refueling and
overhaul of the carrier Dwight D. Eisenhower. Eisenhower is scheduled
to arrive at Newport News in 2001 and will remain at the shipyard
for approximately three years.
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