The I.M. Skaugen Group (IMSK) today reported satisfactory first quarter results.
The pre-tax profit was USD 6.8 million for the 1Q06, up from a pre-tax profit of USD 4.0 million in the 4Q05 (USD8.4 million in the 1Q05). The result of the 1Q06 on an EBITDA basis was USD11.1 million and USD10.5 million in 4Q05 (USD13.9 million in 1Q05).
I.M. Skaugen is engaged in two business segments - Norgas and Skaugen PetroTrans (SPT). Norgas comprises the group's gas transportation vessels and the activities in China. SPT is involved in ship-to-ship transfer of crude oil in the Gulf of Mexico.
Continuation of the peak cycle in the petrochemicals markets provided for the positive market conditions to remain into 2006 within our gas transportation sector. The gas carrier rates led to a satisfactory Norgas result in the first quarter. We expect a similar market to continue through 2006. SPT, on the other hand, experienced a difficult operating environment with bad weather conditions in the Gulf of Mexico. To fulfill contractual obligations towards its customers, additional vessels had to be chartered in a very high spot market causing extra costs. SPT expect positive margins again in the next quarter.
The company believes a continued focus on being a low cost and high service provider, with rigors safety standards, gives them a competitive edge in the marketplace.
Overall market conditions appear encouraging for IMS' operations and with a focus on retaining a tight hold on costs across the company, the next 12 months should see a continuation of last year performance with EBITDA result as well as net profit at similar levels at 2005.
At the Annual General Assembly held on March 1st, it was decided to split the IMS share. One old share would yield four new shares, with a face value of NOK 15 per share. This was done in order to increase the liquidity of the share.