Ferret's Stock to Watch: ADSTEAM MARINE LIMITED 09:07, Monday, 15 May 2006
AUSTRALIA'S TUG BOAT FLEET STRETCHING ACROSS THE GLOBE
Sydney - Monday - May 15: (RWE Aust Business News) **************************************************
OVERVIEW ********
If you climb aboard an Adsteam Marine (ASX:ADZ) tugboat you will finish up on the other side of the world.
A market signal to have a closer look at Adsteam was the announcement on Friday that Peter Dexter has been appointed as a non-executive director of the company.
Now Mr Dexter is no ordinary business director, he is also chairman of Wallenius Wilhelmsen Oceania and Wilh. Wilhelmsen Investments Pty Ltd and the Honorary Consul General (NSW) for Norway.
His worth is measured by remarks from Adsteam Marine chairman Bruce Corlett, who said: "Peter has a long history within the shipping and maritime industry and brings a wealth of knowledge with him to assist Adsteam Marine.
"His career, initially with ANL, and then Wallenius Wilhelmsen and its subsidiary companies, is first rate and my fellow directors and I expect him to make a substantial contribution to the strategic direction and governance of the company," Mr Corlett declared, who is no slouch in business acumen himself.
Mr Dexter's appointment is immediate.
Mr Dexter said, he was excited about joining the board of Adsteam Marine and his experience within the shipping and logistics industry provided a good fit with Adsteam Marine's business.
"Adsteam has a long history in towage and Australian shipping and is highly regarded within the shipping world. I look forward to this opportunity," he said.
Mr Dexter is also a director of a number of other companies associated with the Wilhelmsen Group in Oceania and serves as a director of The Australian National Maritime Foundation.
SHARE PRICE MOVEMENTS *********************
Shares of Adsteam Marine on Friday slipped 2c to $2. Rolling high for the year has been $2.27 and low $1.63. Dividend is 5.8 per cent to yield 2.9 per cent. Earnings per share is 11.9c and price/earnings ratio 16.81. The company has 272.7 million shares on issue with a market cap of $551 million.
Net profit for the six months ended December 31 was $21.2 million, up a modest 5 per cent on the previous comparable period.
Managing director John Moller the result reflected the improved fitness in the Australian business and the significant progress in workplace reform.
"The result is slightly up on last year and includes some of the further improvements made within the business that will begin to flow in the second half, particularly in the UK," he said.
Highlights of the interim result include:
* Fully franked interim dividend of 3.9c per share, up from 2.4 cents per share from the previous corresponding period;
* Revenue of $159 million and EBITDA $48.7 million;
* Improved Australasian earnings with EBITDA of $30.2 million (before one-off and non-core items), up 12 per cent on last year on a like-for-like basis;
* EBITDA for the UK (before one-off and non-core items) of $15.4 million, down $3.1 million on a like-for-like basis, and
* Net profit before tax of $23.4 million, up 14 per cent on last year.
During the period, Adsteam incurred significant items relating to redundancy and restructuring activities of $4.8 million after tax.
These costs were primarily incurred in the UK and will result in ongoing annualised cost savings of about $3.5 million per annum with a net saving of approximately $1 million expected to be realised in the second half of the 2006 financial year.
Mr Moller said, "Adsteam maintains its leading position in the Australian towage industry and has benefited from increased shipping activity during the period.
"As a result, we improved our tug utilisation and delivered 6 per cent growth in tug jobs in Australia," he added.
In March, Adsteam's Thames and Medway operation took delivery of two new state-of-the-art Damen 2411 tugs.
Adsteam Warden and Adsteam Harty were brought in to meet the demands of the growing LNG market on the Medway and is part of the company's ongoing upgrading of its UK fleet.
The tugs, which have been named after local villages near their operational base at Sheerness, have recently finished rigorous trials in Vietnam and Rotterdam before being sailed to the UK.
These are the second and the third 2411s to join the UK fleet in the last 12 months, with a further two new tugs scheduled for delivery this year.
"These two tugs will prove to be a great asset to our Thames and Medway operation, said Stephen Eastwood, CEO of Adsteam Europe.
"The expanding LNG market has provided us with the opportunity to invest in unrivalled technology, which will enhance the service to all our customers, not just LNG.
"Gas consumption has doubled in the UK over the last 10 years and given dwindling North Sea reserves, the importation of gas into the UK was inevitable," he said.
The Medway operation is the first of several LNG developments planned for the UK over the next few years and this investment in new, more powerful tugs will prove vital in maintaining Adsteam's position as first choice LNG towage provider on the Medway.
Adsteam UK is the country's leading supplier of towage services, with operations at seven key ports: Thames and Medway, Felixstowe, Hull, Immingham, Liverpool and Southampton.
One of the longest-established ship-assist specialists, the company has been operating on the Thames and Medway for over a century.
BACKGROUND **********
Principal operations are located in Australia and the United Kingdom and cover major container, bulk and general cargo ports in Australia, the South Pacific and the UK.
With activities including towage, line running/mooring, workboat and offshore services, vessel management, salvage, emergency response and ships' agency, Adsteam Marine is a leading international provider of maritime services.
The group serves a global customer base with a fleet of about 150 tug boats plus barges, workboats and launches.
The company continues to invest in new tugs in order to maintain its fleet at the highest level.
Adsteam Marine is a leading international provider of harbour towage and related marine services.
The company has a number of divisions: Adsteam Australasia, Adsteam UK, Adsteam Agency, United Salvage.
Adsteam's services comprise harbour towage Lines and moorings, bunkering operations, oil tanker berth assistance, oil terminal support services, port management, remote port management, pilotage, pilot boat services, workboat services, marine industry support, crew transfer operations, tug barging, offshore oil and gas industry support services, ships agency, salvage, emergency response, ocean towage, diving support and project management.
ENDS
ADZ Price at posting:
0.0¢ Sentiment: None Disclosure: Not Held