May 2, 2006
Maritrans to build two tugs at Bender
Maritrans Inc. (NYSE:TUG) has entered into a letter of intent and is close to finalizing an agreement with Bender Shipbuilding & Repair Co., Inc. to build two new 8,000-horsepower tugboats.
The two new tugboats are expected to be delivered in the fourth quarter of 2008 and the first quarter of 2009. The total cost for the two tugboats is expected to be $32 million. Once delivered, one of the tugboats will replace the tugboat VALOUR. The company has entered into a charter to lease a substitute tugboat for the VALOUR until the new tugboat is delivered. The company plans to pair the second newbuild tugboat with the M215, the last of the single-hulled barges it has slated for rebuilding.
CEO Janathan Whitworth commented, "By adding two 8,000-horsepower tug boats that have the latest version of the Intercon connection system, we should further enhance the speed of our fleet in a manner that adheres to our strict safety and environmental policies. Building these two boats supports our view that articulated tug barge units (ATB's) best serve the company and its customers and is consistent with our previous decision to build three state of the art tug/barge units as well as our successful barge rebuilding program that has been in place since 1998. We believe the combination of the attractive price of the three newbuildings and the two tugboats announced today as well as the cost effective nature of our rebuilding program positions Maritrans to earn a strong return on its investment while satisfying customer needs at a lower cost than competitors. Going forward, we remain committed to build upon our past success and seek opportunities to further expand our leadership in the U.S. Jones Act trade."
Whitworth announced the tugboat decision after Maritrans reported net income for the quarter ended March 31, 2006 of $5.8 million, or $0.48 diluted earnings per share, on revenues of $47.4 million. This compares with net income of $3.7 million, or $0.43 diluted earnings per share, on revenues of $43.5 million for the quarter ended March 31, 2005.
The company said that during the quarter it continued to earn strong average daily rates on its vessels deployed in the clean product spot market despite lower fleet utilization due to higher than expected refinery maintenance turnarounds in the Gulf of Mexico, the slow ramping up of production of a number of Gulf refineries still out of service as a result of the 2005 hurricane season, and Gulf refineries shut down for retooling to prepare for the new ultra low sulfur diesel specifications. Demand by the Company's Delaware River refinery customers for the Company's crude-oil lightering services was affected in the first quarter by three refineries undergoing scheduled maintenance for a portion of the quarter. Barrels delivered to crude-oil lightering customers during the first quarter of 2006 were down approximately 2% from the volumes delivered during the fourth quarter of 2005.