Losses on ship sales may put Soeharto-linked firm into red
Losses on ship sales may put Soeharto-linked firm into red
SINGAPORE (Reuters): Energy transportation group Osprey
Maritime Ltd, partly owned by former president Soeharto's family,
will see weaker earnings for 1998, possibly slipping into the
red, due to huge losses from the sale of two vessels, analysts
said on Monday.
"For 1998, they would have shown a profit if not for the loss
from the sale of their two vessels, but it will still be a
deterioration because overall rates have come down," ABN AMRO
Asia Securities' analyst Elizabeth Cheng told Reuters.
Osprey, which is more than 50 percent owned by Indonesian
investors including the Soeharto family, said last October the
sale of its two very large crude carriers (VLCCs) would result in
an exceptional loss of US$27.8 million.
Analysts Reuters spoke to were expecting losses ranging from
US$18 million to $33 million compared to a net profit of US$18.22
million for 1997.
The oil and gas carrier would see an earnings recovery for
1999 but this would be insignificant due to expectations of flat
freight rates, analysts said.
"I think earnings will remain low because the crude and
product tanker rates are very bad. The VLCC rates may see some
improvement but still not too exciting on the whole," said an
analyst with a local brokerage.
Most analysts had a reduced call on the stock, seen more as a
speculative play than a fundamental one.
"Osprey is a speculative play. The group is surrounded by many
rumors, including its Indonesian partners selling their stake and
a potential target for a reverse takeover by the Gotaas-Larsen
group," said the analyst with a U.S house.
Osprey acquired gas shipping group Gotaas-Larsen in 1997.
"The chances are the Indonesians will sell out. But a lot of
investors have lost their confidence in the company. That is why
the share price is hovering next to nothing. In event there is a
sell-out, there will be a strong upside for the stock," added
another analyst.
Osprey shares have fallen to Singapore $0.605 as of Monday
from their heydays of more than S$2 in June 1997.