Rickmers Maritime Trust, the Singapore-based container ship owner, reported on Monday second-quarter profit plunged 88 percent to $610,000 from $5.22 million in the same period of 2009 as one-time restructuring charges ate into its cash flow.

The trust’s charter revenue from its 16 container ships on long-term hire in the quarter dropped by 3 percent to $36.4 million from $37.55 million a year earlier, due to what it called a smaller contribution from a 5,060-TEU vessel, the Kaethe C. Rickmers.

Rickmers Trust CEO Thomas Preben Hansen said the company generated strong revenue and cash flow and that the recovery in the global container industry is reducing the risk to the trust’s operating results, but he cautioned that the outlook remains uncertain.

Rickmers said the steep decline in profit was primarily due to a one-time loan restructuring fee of $5.36 million as well as legal and professional fees amounting to $1.86 million for the loan restructuring and cancellation of the trust’s committed capital expenditure.

The trust also recorded an unrealized loss of $1.41 million on four of its interest rate swaps that were rendered ineffective as cash flow hedges, which further impacted its net profit.

On June 9, the trust announced it had entered into binding agreements with its lending banks and Polaris Shipmanagement Company Limited (“Polaris”), a wholly-owned subsidiary of the Rickmers Group, to resolve the trust’s financing issues.

The first agreement with its lending banks was for a five-year extension of the $130 million top up loan facility which matured on April 30 and a waiver of its value-to-loan covenants for up to three years.

The second agreement, with Polaris, discharges Rickmers Maritime from its obligations to purchase seven container ships with a total contracted value of $918.7 million.

 “The agreements we have concluded with our lenders and Polaris remove all financing uncertainties and with the deleveraging that will follow, the trust will be on a firmer financial footing,” said Rickmers CFO Quah Ban Huat.

Source: JOC