May 12, 2003
Profitable quarter for Seabulk
"Lower interest costs, together with strong performances from our tanker and towing businesses, enabled us to post a profit for the quarter," commented Chairman, President and Chief Executive Officer Gerhard E. Kurz. "The lower interest costs are a direct result of our recapitalization last September. The tanker and towing businesses benefited from higher charter rates and increased traffic in certain ports. The offshore business, however, continued to suffer and posted an operating loss for the period, due entirely to poor results in the depressed Gulf of Mexico market. In response, we sold off a number of smaller vessels, redeployed others to more active markets, and further reduced overhead and operating costs in our domestic offshore business. Nonetheless, we continue to anticipate -- as do most industry experts -- that strong underlying supply/demand fundamentals will trigger an eventual recovery later in the year in the Gulf of Mexico. In the meantime, we are expanding our international presence -- particularly in West Africa, Mexico and Brazil, where we see significant long-term potential."
Results of Operations
Revenues from Seabulk Offshore, the company's largest business with a fleet of 125 offshore energy support vessels, fell to $37.8 million from $43.3 million in the year-earlier period and accounted for 49% of total company revenues. Seabulk's offshore revenues are currently split approximately 75%/25% between its international and domestic segments. Seabulk Offshore had an operating loss of $0.8 million in the quarter compared with operating income of $5.1 million in the year-earlier period. In the immediately preceding quarter, ended December 31, 2002, Seabulk Offshore had an operating loss of $1.8 million.
Day rates and utilization in the Gulf of Mexico, where Seabulk Offshore has the industry's third-largest fleet, were essentially unchanged from the immediately preceding quarter but were down sharply from the year-earlier period as the contracted rig count remained stuck at its lowest levels in four years.
In West Africa, where Seabulk Offshore has the industry's second largest fleet, day rates and utilization remained strong and in line with the immediately preceding and year-ago quarters. In the Middle East and Southeast Asia, which together account for about 25% of offshore revenues, results were improved from the year-earlier period.
Revenues from Seabulk Tankers, the company's Jones Act chemical/product tanker business, totaled $30.2 million or 39% of total Company revenues compared with $31.9 million in the first quarter of 2002. Operating income rose to $11.1 million from $8.2 million in the year-earlier period as the Company benefited from higher charter rates and had no drydockings. With a fleet of 10 vessels, including five double-hulls, Seabulk Tankers is the largest independent owner of U.S.-flag, Jones Act product tankers.
Seabulk Towing, which operates a fleet of 28 tugs in seven southeastern ports and the offshore Gulf of Mexico, had revenues of $9.3 million, representing 12% of total company revenues for the quarter, compared with $8.1 million a year ago. Operating income increased to $2.7 million from $1.7 million as vessel traffic increased in certain of the company's ports.