"We expect the dry bulk shipping market to remain challenging throughout 2013. Stronger growth in the demand for dry bulk commodities in the Far East implies that a potential recovery is not too far away from materializing, once the supply situation returns to balance. While the current rate environment continued to weigh on our financial results, we believe that our modern fleet bodes well for Globus to continue to provide customers with the service they require and maintain a high fleet utilization.
Management Discussion and Analysis of the Results of Operations
Fourth Quarter 2012 and 2011 Results
Total comprehensive loss for the fourth quarter 2012 amounted to $81.2 million or $8.00 basic loss per share based on 10,166,377 weighted average number of shares. If adjusted for the impairment loss of $80.2 million total adjusted comprehensive loss for the period becomes $1.0 million or $0.11 basic loss per share. Total comprehensive income of the fourth quarter of 2011 was $2.3 million or $0.23 basic earnings per share based on 10,059,497 weighted average number of shares.
For the three month periods ended December 31, 2012 and 2011 our Revenues were approximately $7.7 million and $10.1 million respectively. The decrease was due to lower average time charter rates achieved by our vessels during the fourth quarter of 2012 compared to the average time charter rates archived during the same period in 2011. Average TCE rate decreased by 31%, from $14,987 per day for the three month period ended December 31, 2011 to $10,344 per day for the three month period ended December 31, 2012.
Vessel operating expenses
Vessel operating expenses, which include crew costs, provisions, deck and engine stores, lubricating oils, insurance, maintenance, and repairs, increased by $0.7 million to $2.9 million during the three month period ended December 31, 2012 compared to $2.2 million during the three month period ended December 31, 2011 corresponding to a 32% increase mainly due unexpected repairs performed during the fourth quarter of 2012.
Average daily operating expenses during the three month periods ended December 31, 2012 and 2011 were $5,321 per day and $4,031 per day respectively.
Depreciation decreased by $0.3 million to $2.6 million during the three month period ended December 31, 2012 from $2.9 million during the respective period in 2011. The decrease in depreciation expenses is primarily due to the fact that on December 4th, 2012, the Company decided that the vessel Tiara Globe met the criteria to be classified as non-current asset held for sale, it was measured at the lower of its carrying amount and its fair value less cost to sell and stopped being depreciated.
During the year ended December 31, 2012, we recognized an impairment loss of $80.2 million. The Company tests for impairment of its long lived assets whenever events or changes in circumstances indicate that the carrying amount of the assets may not be recoverable. Due to the sustained decline in charter rates and vessel values during the last four years and because market expectations for future rates are low and are unlikely to increase to the high levels of 2008 and 2007 in the foreseeable future, the Company performed an impairment analysis for all the vessels in its fleet by comparing projected discounted cash flows to the carrying values of vessels. As a result of this analysis we recorded an impairment loss of $55.8 million to the book value of our six out of seven vessels. In addition, on December 4th, 2012, the Company decided that the vessel Tiara Globe met the criteria to be classified as non-current asset held for sale and was subsequently measured at the lower of its carrying amount and its fair value less cost to sell. In this respect the company recognized an impairment loss of $24.4 million.
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