Ultrapetrol (Bahamas) Limited (ULTR)

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Ultrapetrol (Bahamas) (ULTR)

Q1 2013 Earnings Call

May 09, 2013 8:30 am ET


Cecilia Yad - Chief Financial Officer

Felipe Menendez Ross - Chief Executive Officer, President, Director, Chief Executive Officer of UABL Limited, President of UABL Limited, President of Ultrapetrol S A, Director of UABL Limited and Director of Ultrapetrol S A


Benjamin Nolan

Jamie Nicholson

Stephen Sylvester

Arieh Coll



Thank you for standing by. [Operator Instructions] Today's call is being recorded. If you have any objections, you may disconnect at this time. And I'd now like to introduce your Chief Financial Officer, Cecilia Yad. You may begin.

Cecilia Yad

Thank you. Good morning, everyone. Thank you for joining us for the call today. Welcome to the Ultrapetrol Limited conference call to discuss the company's first quarter 2013 outlook. I would like to remind everyone that this conference call is now being webcast at the company's website www.ultrapetrol.net. There are also additional materials related to our earnings announcement on our website, including the slide presentation which forms a part of this conference call. You should be aware that in today's conference call, we will be making certain forward-looking statements to discuss future events and performance. These statements are subject to risks and uncertainties that could cause actual results to differ from the forward-looking statements.

For a discussion of factors that could cause results to differ, please see the company's 6-K on press release that we have filed yesterday and the company's filings with the Securities and Exchange Commission, including without limitation, the company's annual report on Form 20-F for the year ending December 31, 2012 and March 14, 2013, as well as Page 2 of slide presentation that that shortly follows. With me today is Felipe Menendez, Ultrapetrol's President and Chief Executive Officer. Felipe will review Ultrapetrol's business segment, as well as discuss our industry and future growth opportunities. I will take you through the financials and after our remarks, we will be happy to take your questions, and now I will hand the proceedings to Felipe.

Felipe Menendez Ross

Thank you, Cecilia. Good morning, everyone, and thank you for joining us on the call today. In order to make the best use of the materials that we have filed together with our press release, as we go along, we will reference the slide number that corresponds to the information that we are discussing.

Let's turn to Slide 3. Before we start analyzing the figures for the first quarter 2013, let me take this opportunity to welcome Cecilia Yad, our new CFO, whom you heard at the beginning of the call. We are very glad that we did convince Cecilia to join us, and we are sure she will make a very positive contribution to our development. We will undoubtedly benefit from the combination of Cecilia's expertise and analytical capabilities, as well as Leonard Hoskinson's knowledge and experience from a long career in maritime international finance, which will be the main focus of his activity with the company the future.

In Slide 3, you will find the summary of our first quarter results for 2013 compared to the equivalent period of 2012. The adjusted EBITDA for the period is $19.3 million, which compares with $7.3 million in the same period of 2012, while our adjusted net loss and adjusted EPS are 0.2 negative median and $0.00, which compares to net loss of $13.1 million and $0.44 in the same period of 2012. As usual, we adjust the net income and EPS to reflect the increase in the provision for exchange variance in our Brazilian subsidiary, which is the noncash effect produced solely by the reevaluation of our Brazilian currency against the U.S. dollar. In this quarter, we have also adjusted our results to reflect 2 other events. As we have discussed in previous quarters, under our agreement with Touax, we've built and sold 10 barges in the first quarter of 2013, and then leased this equipment from them for a period of 10 years. Since the actual cash profit element in the sale part of this transaction is only recognized in our reported net income over the 10-year period of the lease, we make an adjustment of $1.8 million to reflect the cash margin that we have actually obtained in our net income this quarter. Finally, you will note an adjustment of $3.6 million corresponding to the one-time charge of the expenses related to our $18 million Convertible Senior Notes, which we fully repaid, extinguishing the debt in the month of January 2013. At the end of the third quarter, we confirmed the sale of another set of 14 barges, 7 dry and 7 tank units from our Punta Alvear barge building facility. These units will be delivered within this year.

Let's turn to Slide 4. In the table at the top of the slide, you will find the comparison between the first quarter 2013 EBITDA per segment and those obtained in each business segment in the equivalent period of last year. It is clearly noticeable from this table that our River business results were substantially better than those obtained in 2012, which as we have discussed in the past, was severely affected by the conjunction of a severe drought that cut the crops in half and very low water levels, which affected the navigation and the overall efficiency of transportation. As you can see, our Offshore Supply business results also improved significantly, mostly as a result of our larger fleet in operation. Our Ocean business EBITDA was almost identical to what we obtained in the first quarter of 2012. In the next few slides, we will go over the individual performance of each segment and what can be expected as the plans that we are executing evolve in the future.

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