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International Shipholding Corp. Reports Operating Results (10-Q)

August 07, 2009 | About:

International Shipholding Corp. (ISH) filed Quarterly Report for the period ended 2009-08-07.

INTL SHIPHOLDING CORP. through its subsidiaries operates a diversified fleet of U.S. and international flag vessels that provide international and domestic maritime transportation services to commercial customers and agencies of the United States government primarily under medium- to long- term charters or contracts. International Shipholding Corp. has a market cap of $208.1 million; its shares were traded at around $28.27 with a P/E ratio of 5.5 and P/S ratio of 0.9. The dividend yield of International Shipholding Corp. stocks is 7.2%.

Highlight of Business Operations:

Gross voyage profit increased from $13.7 million in the first six months of 2008 to $29.7 million in the first six months of 2009. Revenues increased from $124.9 million in the first six months of 2008 to $197.9 million in the first six months of 2009. Voyage expenses increased from $101.0 million in the first six months of 2008 to $154.9 million in the first six months of 2009. The changes of revenue and expenses associated with each of our segments are discussed within the following analysis below.

Time Charter Contracts: The increase in this segment s gross voyage profit from $11.4 million in the first six months of 2008 to $30.3 million in the first six months of 2009 was primarily due to an increase in the carriage of supplemental cargoes on our U.S. flag Pure Car Truck Carriers, which caused revenues to increase for this segment from $94.0 million in the first six months of 2008 to $172.6 million in the first six months of 2009. Offsetting this increase in gross voyage profit is an impairment charge of $2.9 million taken on one of our International flag container vessels. This impairment loss was determined after the early termination on one of our International flag container vessel. The Company and the Charterer agreed to the early termination in exchange for an increase in charter hire on the remaining International flag container vessel. While we have recognized this impairment, we will continue to pursue various options with respect to this vessel, including other potential commercial uses for the vessel and the possibility of selling or disposing of the vessel.

Rail-Ferry Service: Gross voyage profit decreased from $221,000 in the first six months of 2008 to a loss of $1.3 million in the first six months of 2009 due to a decrease in volume and rates. Revenues for this segment decreased from $19.1 million in the first six months of 2008 to $14.5 million in the first six months of 2009 also due to a drop in volume and rates due to the current economic conditions.

We recorded a benefit for income taxes of $1.9 million on our $15.5 million of income from continuing operations before income from unconsolidated entities in the first six months of 2009, reflecting tax losses on operations taxed at the U.S. corporate statutory rate. For the first six months of 2008, our benefit was $1.8 million on our $858,000 loss from continuing operations before income from unconsolidated entities. For further information on certain tax laws and elections, see our annual report on Form 10-K for the year ended December 31, 2008, including Note G to the financial statements. Our qualifying U.S. flag operations continue to be taxed under the “tonnage tax” laws.

Equity in net income of unconsolidated entities, net of taxes, decreased from $17.8 million in the first six months of 2008 to $2.8 million in the same period of 2009. The results were driven by our 50% investment in Dry Bulk, a company which owns and operates two Cape-Size Bulk Carriers and one Panamax Bulk Carrier and which has two Handymax Bulk Carrier Newbuildings on order for delivery in 2012. For the second quarters of 2009 and 2008, our portion of the earnings on this investment was $1.6 million and $17.6 million, respectively. Excluding the gain of $15.1 million on the sale of one of the Panamax Bulk Carriers in the second quarter of 2008, Dry Bulk recorded a slight improvement year on year for the six months ending June 30 2009.

Gross voyage profit increased from $7.2 million in the second quarter of 2008 to $14.8 million in the second quarter of 2009. Revenues increased from $61.1 million in the second quarter of 2008 to $99.8 million in the second quarter of 2009. Voyage expenses increased from $48.9 million in the second quarter of 2008 to $76.9 million in the second quarter of 2009. The changes of revenue and expenses associated with each of our segments are discussed within the following analysis below.

Read the The complete Report

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