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August 31, 2012 5:45 pm
Goldenport has cut its interim dividend and put its full-year payout under review following six months that “turned out to be one of the most challenging periods for the shipping industry”.
The London-listed, Athens-based group had maintained a dividend even through 2008 and 2009, when the global recession badly hit shipping companies flush with vessels but low on business.
John Dragnis, chief executive, said the board’s focus on liquidity meant it would not pay the half-year dividend. “We will keep our dividend policy under close review and will take a decision in respect of the final dividend for 2012 in the first quarter of 2013,” he said
Shares fell almost 10 per cent in London on Friday, to close at 48p – 80 per cent below the company’s flotation price in 2006 and less than a 10th of late 2007 highs of about 512p.
Amrit Singh, an equity analyst with Clarkson Capital Markets, blamed Friday’s fall on the dividend move as well as the group – which provides customers with both container and dry-bulk ships – missing the market’s expectations for half-year earnings.
Goldenport reported revenues of $43m in the six months to the end of June, down from $52m a year earlier, dragged by economic uncertainty and low growth in Europe and the US and slowing growth in Asia.
The sales slump helped push the company into the red – the pre-tax loss for the period of $51m compared with a small $3.4m gain a year earlier. The loss per share was $0.56, from a profit of $0.04. Last year’s full-year dividend amounted to 6p a share, 2p of which came at the half year.
But Mr Singh said that by cutting the dividend, the company put itself in a good position to take advantage of deals on new ships. “They’re trying to keep their firepower intact,” he said. “Over the long term, this could be a good opportunity.”
He estimated the company got a good price on the one ship it bought in the half-year, the Conti Seattle for $5.2m. Meanwhile it scrapped three vessels, taking advantage of high steel rates, accruing gains of $1.9m in total.
The fleet renewal programme has helped Goldenport reduce operating expenses. Costs fell 11 per cent year on year to $4,157 a day, according to Mr Dragnis.
The company is also shrinking its fleet. But the industry as a whole continues to suffer from oversupply, particularly in the dry bulk market, a problem set to continue as orders placed before the credit crisis and recession are filled.
But Goldenport said on Friday: “As long as there is no repeat of the large number of new building orders [which should be constrained by the limited availability of bank finance] we are confident that the market will recover and generate good returns in the future.”
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