Intl Shiphldg has a market cap of $149.1 million; its shares were traded at around $20.66 with a P/E ratio of 4.6 and P/S ratio of 0.6. The dividend yield of Intl Shiphldg stocks is 7.3%.
Highlight of Business Operations:Certain foreign operations are exempt from foreign income taxation under existing provisions of the laws of those jurisdictions. Pursuant to existing U.S. tax laws, earnings from certain foreign operations will be subject to U.S. income tax when those earnings are repatriated. Our intention has been and remains to indefinitely re-invest $24,391,000, $12,583,000 and $3,051,000 of our 2011, 2010 and 2009 respective foreign earnings (losses excluded) in our foreign subsidiaries, and accordingly, have not provided deferred taxes against those earnings. The principal reasons for this position are as follows: maintenance of International Flag fleet, future expansion of International Flag fleet and U.S. Flag fleet s operating cash flow needs are adequately met by its operations.
In November of 2011, the Company acquired a 2000-built multi-purpose ice strengthened vessel to service a recently awarded MSC contract. This contract is for a firm one year period after which MSC will have three one-year options and one 11-month option to extend the contract. The fixed time charter is expected to generate gross revenues of approximately $10 million for the firm initial one-year period and approximately $50 million if all of the options are exercised. The Company also added to its fleet ownership by acquiring two PCTC vessels which were previously under operating leases and fixed under long-term contracts to a charterer and one Capesize Bulk Carrier vessel operating in a revenue sharing agreement. Our three newly built International Flag Double Hull Handysize Bulk Carriers were completed and delivered to us in January 2011, operating under a revenue sharing agreement with European partners. In addition, the Company also completed a 25% investment position in ten mini-bulkers, making final equity payments of $1.6 million in January 2011. All ten mini-bulkers operate under short-term charters. Finally, the Company divested itself of its 50% interest in a partnership which owned warehouse space previously used to support the Rail Ferry service when it operated out of a New Orleans terminal.
For the full year 2011, net income was $31.5 million, an increase of $16.2 million as compared to full year 2010. Reflected in the 2011 results is an $18.8 million gain from the acquisition of the remaining 50% interest in Dry Bulk Cape Holding, Ltd (“Dry Bulk”), while the 2010 results included an impairment charge of $25.4 million on the write-down of our Rail-Ferry vessels. Excluding the aforementioned gain on the Dry Bulk acquisition in 2011 and the 2010 impairment charge, net income decreased from $40.7 million in 2010 to $12.7 million in 2011. Total revenues decreased from $290.0 million to $263.2 million for the comparable years driven primarily by lower supplemental cargoes and less operating days on our three U.S. Flag RO/RO vessels under time charter to the MSC. The lower revenues were partially offset by the Rail-Ferry service results which continues to show improvements in its overall cargo carried and revenues from our three new Handysize vessels which began operating in January 2011. Gross voyage profit was $45.7 million in 2011 as compared to $37.3 million for 2010. Excluding the previously mentioned 2010 impairment charge, gross voyage profit decreased by approximately $17.0 million or 27% from prior year results. This decrease was a factor of lower results from our supplemental cargoes, fewer operating days and higher depreciation expenses, partially offset by improvements from our Rail-Ferry service and three new Handysize vessels. Our administrative and general expenses were comparable from year to year. Interest expense increased from $7.2 million to $10.4 million year on year, reflecting higher debt balances from the financing of our three new Handysize vessels as well as the recent purchases and financing of two PCTC vessels which were previously operated through operating leases. We recorded a foreign exchange loss of $3.1 million in 2011 as compared to an $8.2 million loss in 2010 as a result of the strengthening of the U.S. dollar against the Japanese Yen. Net loss/income from unconsolidated entities decreased from a profit of $9.3 million in 2010 to a loss of $410,000 for the full year 2011. This decrease was the result of operating results from Dry Bulk reflected in our revenues and expenses as opposed to being recorded on the one line item “net loss/income from unconsolidated entities” due to the acquisition as well as a decrease in results from our 25% interest in Oslo Bulk.
Time Charter Contracts-U.S. Flag: Overall revenues decreased by 23% or $46.2 million when comparing 2011 to 2010. The decrease was driven primarily by a drop in the carriage of supplemental cargoes on our U.S. Flag Pure Car Truck Carriers, as volumes continue to settle at more historic levels. The segment s gross voyage profit decreased from $48.3 million in 2010 to $25.6 million in 2011 primarily as a result of the decrease in supplemental cargoes as well as an additional commercial voyage in 2010 and lower time charter rates in 2011 on our U.S. Flag Coal Carrier. Partially offsetting these decreases was a reduction in lease expense from exercising the early buy out option of a previously leased vessel. Our fixed contract revenues of $111.7 million and $117.1 million in 2011 and 2010, respectively, represent revenues derived from our fixed time charter contracts, and our variable revenues of $39.4 million and $80.2 million for the same periods in 2011 and 2010, respectively, represent revenues derived from our supplemental cargoes.
Rail-Ferry Service: Revenues for this segment increased from $26.7 million in 2010 to $36.4 million in 2011 due to the beneficial effects of our Northbound service being used as an alternative source of transportation resulting from outages on Mexico s cross border rail service. Gross voyage profit was $2.1 million in 2011, compared to a gross voyage loss of $26.6 million in 2010. Adjusted gross voyage loss in 2010 was $1.2 million, excluding a $25.4 million impairment loss taken on the segment s two Roll-on/Roll-off Special Purpose double deck vessels in the third quarter of 2010.
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