OMI Announces 1Q Results
OMI Corporation for its first quarter ended March 31, 2002 reported net income of $377,000 for the first quarter 2002 compared to net income of $28,378,000 for the first quarter 2001 "We are pleased to record a profit for the first quarter in view of the weakest rate environment for larger crude carriers since the mid - 1980's," said Craig H. Stevenson, Jr., Chairman and CEO.
"While we expected a weak first quarter, substantially warmer than normal weather in the northern hemisphere as well as low natural gas prices, and thus lack of natural gas for oil substitution, resulted in an additional reduction of about 0.9 million bpd in oil demand compared to the same period a year ago." Scrapping activity has recently picked up and is presently at a 30,000,000 dwt annualized rate. While the Suezmax and product markets have modestly improved to start the second quarter, we are uncertain whether the improvement will remain throughout the quarter During the first quarter, OMI entered into the following transactions to improve its financial position and strengthen its balance sheet: • In March 2002, the company entered into a $78 million reducing revolving liquidity facility secured by first mortgages on two vessels, an investment and second mortgages of vessels in its $310 million facility. During March 2002, the company drew down $65 million on this facility.
• In March 2002, OMI's term loan agreement in the original amount of $310 million was amended to reduce the three remaining 2002 quarterly payments from $10 million to $6,250,000 and increased the balloon payment by $11,250,000.
• In April 2002, the 15 remaining quarterly payments (including the three in 2002) were reduced to $6,051,000 as a result of the sale of a vessel. The balloon payment due at maturity in October 2005 is $91,683,000.
• In March 2002, the company exercised its option to reacquire the Columbia by June 30, 2002. OMI agreed to simultaneously sell the vessel, after it is reacquired in June, to an unrelated party and time charter it back for a period of eight years.
• In February 2002, OMI contracted to sell a 1988 built product carrier. The vessel was delivered April 4, 2002.
• In January and March 2002, OMI took delivery of three 2002 built product carriers (two 47,000 dwt and one 37,000 dwt). Each vessel began a three year time charter upon delivery.
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