FORM 6-K
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
Report of Foreign Private Issuer
Pursuant to Rule 13a-16 or 15d-16 of
the Securities Exchange Act of 1934
For the month of June 2000
CENARGO INTERNATIONAL PLC
(Translation of registrant's name into English)
Puttenham Priory
Puttenham
Surrey GU3 1AR
United Kingdom
(Address of principal executive offices)
Indicate by check mark whether the registrant files or will
file annual reports under cover Form 20-F or Form 40-F.
Form 20-F X Form 40-F
Indicate by check mark whether the registrant by furnishing
the information contained in this Form is also thereby furnishing
the information to the commission pursuant to Rule 12g3-2(b)
under the Securities Exchange Act of 1934.
Yes No X
INFORMATION CONTAINED IN THIS FORM 6-K REPORT
Enclosed is the earnings report of Cenargo International plc for
its second fiscal quarter of 2000, ended March 31, 2000.
2
CENARGO INTERNATIONAL PLC
QUARTERLY REPORT
MARCH 31, 2000
3
MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
GENERAL
Cenargo International Plc (the "Company or "Cenargo", an English
company, is a diversified international transportation group
specialising in European freight and passenger ferry services,
international ship owning and chartering, the movement of surface
and airfreight and the management of freight logistics.
RESULTS OF OPERATIONS
Three months ended March 31, 2000 compared to three months ended
March 31, 1999.
Operating Revenues
Operating Revenues increased in the second quarter ended
March 31, 2000 (the "2000 quarter") by $12.8 million to $38.8
million compared to $26.0 million in the second quarter ended
March 31, 1999 (the "1999 quarter"). Increase comprises a $2.9
million decrease charter hire revenues, a $15.6 million increase
in ferry service revenues and a $0.1 million increase in
logistics and other revenues. The increase in ferry service
revenues was mainly due to the inclusion of Merchant Ferries new
Liverpool - Dublin Ropax service which commenced operation in
late February 1999, and the inclusion of revenues from Norse
Irish Ferries Limited ("NIF") acquired on October 1, 1999,
liquidated damages of $0.7 million received from the builders of
Brave Merchant as compensation for late delivery of the vessel
and $2.0 million receivable as partial settlement of the Companys
court case against the Spanish Government, in the 2000 quarter.
Decrease in charter hire revenue represents a loss of charter
hire previously generated by the Companys deep-sea vessels.
Operating Expenses
Vessel and other operating costs increased in the 2000 quarter by
$10.0 million to $29.4 million compared to $19.4 million in the
1999 quarter, primarily as a result of the inclusion of NIF and
Freightwatch results, operating costs of the Liverpool - Dublin
Ropax service and Northern Merchant operating costs in the 2000
quarter offset by decreased deep sea operating costs as a result
of the vessels sold.
Depreciation for the 2000 quarter has increased by $0.4 million
to $2.5 million compared to $2.1 million in the 1999 quarter,
which represents depreciation on the ferry Mistral purchase by
the Company in July 1999 together with depreciation on the assets
and equipment of NIF in the 2000 quarter offset by the reduction
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of depreciation on deep-sea vessels sold. Amortisation of dry
docking and special survey costs for the 2000 quarter increased
by $0.1 million to $0.4 million compared to $0.3 million in the
1999 quarter. Goodwill amortisation increased in the 2000 quarter
by $0.4 million to $0.4 million as a result of amortisation of
goodwill on the acquisition of NIF acquired October 1, 1999.
General administrative expenses for the 2000 quarter increased by
$0.6 million to $3.9 million compared to $3.3 million in the 1999
quarter primarily due to the inclusion of Freightwatch and NIF
costs in the 2000 quarter.
The foreign exchange gain for the 2000 quarter was $0.9 million
compared to a loss of $0.3 million for the 1999 quarter. The
majority of the gain/loss represents unrealised non cash
differences on re-translation of monetary sterling based assets
and liabilities within the US Dollar reporting subsidiary
companies.
Primarily as a result of these developments, total operating
expenses increased by $10.3 million to $35.8 million for the 2000
quarter compared to $25.5 million for the 1999 quarter.
Net Operating Income
As a result of the foregoing factors net operating income
increased by $2.5 million to $3.0 million for the 2000 quarter
compared to income of $0.5 million for the 1999 quarter.
Other Income/ Expenses
Interest income decreased by $0.7 million to $0.2 million for the
2000 quarter compared to $0.9 million for the 1999 quarter. In
the 1999 quarter the majority of interest income was attributable
to cash deposits from the proceeds of sale of vessels, which were
disbursed in July and October 1999 on the purchase of vessels and
on the acquisition of NIF and Eaglescliffe.
Interest expense was $4.8 million for both the 1999 and 2000
quarters.
Net Loss
As a result of the foregoing net loss decreased by $1.3 million
to $0.9 million for the 2000 quarter compared to $2.2 million for
the 1999 quarter. EBITDA generated was $6.3 million for the 2000
quarter compared to $3.0 million for the 1999 quarter.
Six months ended March 31, 2000 compared to six months ended
March 31, 1999.
5
Operating Revenues
Operating revenues increased in the six months ended March 31,
2000 (the 2000 period) by $28.4 million to $78.8 million compared
to $52.4 million in the six months ended March 31, 1999 (the 1999
period). The increase comprises a $5.6 million decrease in
charter hire revenues, a $32.1 million increase in ferry service
revenues and a $1.9 million increase in logistics and other
revenues. The increase in ferry service revenues was mainly due
to the inclusion of Merchant Ferries new Liverpool - Dublin RoPax
service which commenced operation in late February 1999, and the
inclusion of revenues from NIF acquired on October 1, 1999, $0.7
million received from the builders of the Brave Merchant as
compensation for late delivery of the vessel and $6.5 million
receivable as partial settlement of the Company's court case
against the Spanish Government. Decrease in charter hire revenue
represents the loss of charter hire previously generated by the
Company's deepsea vessels. The increase in logistics and other
revenue was due to the inclusion of revenue from Freightwatch
Limited (Freightwatch) acquired on March 2, 1999.
Operating Expenses
Vessel and other operating costs increased in the 2000 period by
$20.1 million to $58.6 million compared to $38.5 million in the
1999 period, primarily as the result of the inclusion of NIF and
Freightwatch results and the operating costs of the Liverpool -
Dublin RoPax service in the 2000 period offset by decreased
deepsea operating costs as a result of the vessels sold.
Depreciation for the 2000 period has increased by $1.3 million to
$5.3 million compared to $4.0 million in the 1999 period, which
represents depreciation on the two RoPax vessels delivered to the
Company in September 1998 and January 1999, the ferry Mistral
purchased by the Company in July 1999 together with depreciation
on the assets and equipment of NIF in the 2000 period offset by
the reduction of depreciation on deep sea vessels sold.
Amortisation of dry-docking and special survey costs for the 2000
period increased by $0.3 million to $1.0 million compared to $0.7
million in the 1999 period due to increased amortisation of dry-
docking on the vessels acquired offset by reduced amortisation of
deep sea vessels sold. Goodwill amortisation increased in the
2000 period by $0.8 million to $0.9 million as a result of
amortisation of goodwill on the acquisition of NIF acquired
October 1, 1999.
General administrative expenses for the 2000 period increased by
$1.0 million to $7.7 million compared to $6.7 million in the 1999
period primarily due to the inclusion of Freightwatch and NIF
costs in the 2000 period.
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Foreign exchange loss for the 2000 period has decreased by $0.4
million to $0.1 million compared to $0.5 million in the 1999
period. The majority of the loss represents unrealised non-cash
losses on re-translation of monetary sterling based assets and
liabilities within the US Dollar reporting subsidiary companies.
Primarily as a result of these developments the total operating
expenses increased by $23.2 million to $73.6 million for the 2000
period compared to $50.4 million for the 1999 period.
Net Operating Income
As a result of the foregoing factors, net operating income
increased by $5.2 million to $7.2 million for the 2000 period
compared to $2.0 million for the 1999 period.
Other Income/Expenses
Interest income decreased by $1.8 million to $0.4 million for the
2000 period compared to $2.2 million for the 1999 period. In the
1999 period the majority of interest income was attributable to
cash deposits from the proceeds of the sale of vessels which were
largely disbursed in July and October 1999 on the purchase of
vessels and on the acquisition of NIF and Eaglescliffe.
Interest expense increased by $0.1 million to $9.9 million for
the 2000 period compared to $9.8 million for the 1999 period. The
breakage costs on termination of capital leases in the 2000
period relates to the termination of capital leases for the
vessels River Lune and Saga Moon which were purchased by the
Company in October 1999 from escrowed funds.
Net Loss
As a result of the foregoing net loss decreased by $0.2 million
to a net loss of $2.2 million for the 2000 period compared to
$2.4 million for the 1999 period. EBITDA generated was $14.4
million for the 2000 period compared to $8.7 million for the 1999
period.
LIQUIDITY AND CAPITAL RESOURCES
Total shareholders' equity at March 31, 2000 was $41.4 million
compared to $50.8 million at March 31, 1999. The decrease of $9.4
million is represented by a net loss for the twelve months of
$8.2 million and a cumulative translation adjustment of $1.2
million on translation of sterling based subsidiary companies.
Long term debt at March 31, 2000 consists of $172.8 million of
9-3/4% First Priority Ship Mortgage Notes and $34.1 million
currently drawn down from a $42.5 million facility to finance the
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building contract for a RoPax vessel newbuilding, together with
other secured debt and obligations under capital leases.
The Company has reduced its long term debt by $42.75 million on
completion of the sale and operating lease back of its Ropax
vessel Northern Merchant in March 2000.
At March 31, 2000 the Company had cash and cash equivalents of
$12.0 million compared with $87.2 million at March 31, 1999. Cash
and cash equivalents decreased by $75.2 million primarily as a
result of the acquisition of NIF, the vessels Mistral, Saga Moon
and River Lune, the purchase of Eaglescliffe, and funding an
increase in trade accounts receivable primarily as a result of
the Company's new Liverpool - Dublin RoPax ferry service. The
Company had free cash at March 31, 2000 of US$8.7 million.
Taxation
The UK Treasury published the Finance Bill in April 2000,
including the proposed UK tonnage tax regime. The bill will
become law in late summer 2000.
The tonnage tax regime will allow UK shipping companies to elect
to pay corporate tax based on a nominal profit derived from the
net tonnage of its ships. Non shipping activities will be ring
fenced and taxed as before, based on taxable net income. The
regime is intended to promote the UK shipping industry and its
competitive position.
Cenargo intends to elect to enter the tonnage tax regime from
October 1, 2000 or 2001. This will allow Cenargo to operate its
ferry and shipping business virtually tax-free. Transitional
rules of the regime mean that the majority of the Company's
deferred tax liability ($12.3 million at March 31, 2000) will be
extinguished over a seven year period at approximately 15% per
annum.
SEGMENT ANALYSIS
Irish Sea
The quarter's results were adversely affected by winter weather
(as in previous years) and by the slow start up following the
millennium celebrations. Monthly ETUs (equivalent trailer units)
carried during the quarter were as follows:
8
Belfast Dublin Dublin Belfast
Heysham Heysham Liverpool Liverpool
January 8,850 4,173 7,232 10,207
February 10,645 4,606 8,147 11,337
March 11,355 5,294 9,797 11,959
The services continue to be adversely affected by the weakness of
the Euro compared to Sterling. It is estimated that the reduction
in revenues compared to Budget, attributable to the weakness of
the Euro, has been over $1 million in the six months to 31 March
2000. No significant strengthening of the Euro against Sterling
or the US Dollar is foreseen in the near future.
Fuel costs have also been much higher than budgeted. It is
estimated that the extra cost of fuel over the six months to 31
March 2000 has been $1.1 million. Fuel costs appear to have
peaked and are now falling.
The new berth in Dublin has been delayed. All the constituent
components are, however, now in place and we have a firm promise
from the port that the new berth will be operational on 12th
June 2000. This will enable us to compete much more aggressively
on the Dublin-Heysham service and rebuild both volumes and rates
on that service.
P & O have recently introduced an additional vessel on the
Liverpool Dublin service. This has inevitably introduced a
significant increase in competition on the route with the
consequent impact particularly on rates.
The Company is continuing to concentrate on rationalising costs
following its acquisition of NIF. A great deal of progress has
been made in relation to the acquisition of the two modern Ropax
vessels chartered in by NIF. The Company is confident that an
operating lease structure relating to these two vessels will be
in place within the next two months, leading to substantial cost
benefits.
Logistics
The Company's logistics businesses continue to improve. Further
new contracts have been won which should contribute significant
EBITDA in Quarters 3 and 4. The Company is particularly
concentrating on E-commerce logistics' support.
Ferrimaroc
Ferrimaroc has had an expected quiet second quarter. Increased
competition continues to impact on Ferrimarocs market share which
averaged 37% for passenger and 40% for cars during the Quarter.
9
Discussions continue as to a possible pooling with the other
shipping lines that have entered the trade.
New Vessels
The third new Ropax was delivered 8th March 2000 and went on time
charter to Norfolk Line (Maersk) for eighteen months with a
further two options of nine months.
The fourth new Ropax vessel is expected to be delivered at the
end of August 2000. The Company is confident that the vessel will
be time chartered to Maersk to run alongside Northern Merchant on
the Dover - Dunkirk service.
YEAR 2000 COMPUTER PROBLEM
The Company announced prior to December 31, 1999 that the tasks
identified in its Year 2000 program had been completed and that,
as a result, all reasonable steps have been taken to achieve Year
2000 readiness. No significant disruption to the Company's
business occurred on the date change roll over to January 1,
2000.
The overall objective of the Company's Year 2000 program is to
minimise the chance of disruption to the services we provide to
its customers up to, during and after the turn of the millennium.
For the Company systems, equipment and services obtained from
third parties it has sought and received details of Year 2000
compliance from those parties and where appropriate obtained
details of testing and work done. Risks that we deemed
particularly crucial to business processes resulted in our own
testing of the relevant systems and equipment. We intend to take
appropriate further action including re-testing of our systems
and re checking of our contingency plans during of 2000.
The completion of its program helped the Company to confirm that
it believed that an acceptable state of readiness had been
reached for the turn of the millennium. But, given the complexity
of the problem it is not possible for any organisation to
guarantee that no Year 2000 problem will remain because some
level of failure may still occur.
EUROPEAN MONETARY UNION - EURO
On January 1 1999, eleven member countries of the European Union
established fixed conversion rates between their existing
sovereign currencies, and adopted the Euro as their new common
currency. The Euro is currently trading on currency exchanges
and the legacy currencies will remain legal tender in
participating countries for a transition period between January
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1, 1999 and January 1, 2002. During the transition period, non-
cash payments can be made in the Euro and parties elect to pay
for goods and services and transact business using either Euro or
a legacy currency. Between January 1, 2002 and July 1, 2002 the
participating countries will introduce Euro notes and coins and
will withdraw all legacy currencies so that they will no longer
be available.
Although the United Kingdom is currently not participating in the
Euro the Company's businesses trade extensively within the Euro
Zone. The Company will continue to evaluate all pricing,
currency risk, accounting, tax, governmental, legal and
regulatory issues as guidance becomes available. Based on
current information the Company does not expect that Euro
conversion will have a material adverse affect on its business or
financial condition.
FORWARD LOOKING STATEMENTS
This release contains forward looking statements (as defined in
Section 21E of the Securities Act 1934, as amended) which reflect
managements current views with respect to certain future events
and performance, including statements relating to multi purpose
vessel charters and Irish sea freight ferry volumes and rates,
logistics and cash. The following factors are among those that
could cause actual results to differ materially from the forward
looking statements, which involve risks and uncertainties, and
that should be considered in evaluating any such statements:
changes in the political environment in Northern Ireland and
Eire, Spain and Morocco, changes in the level of competition in
the Irish Sea and Mediterranean, changes in the ability to
provide a regular scheduled service on the Irish sea and the
companys Mediterranean service.
11
Unaudited Consolidated Statements of Income
Three Months Ended March 31, 2000, 1999
(Expressed in US $000)
2000 1999
Operating revenues
Charterhire income - 2,951
Ferry service income (3b) 33,605 18,103
Logistics and other income 5,185 5,070
Brokers commission - (112)
____________ ____________
38,790 26,012
____________ ____________
Operating expenses
Vessel and other operating costs 29,385 19,359
Depreciation 2,552 2,147
Amortisation of drydocking 435 331
Goodwill amortisation 455 30
General and administrative exps 3,862 3,293
Foreign exchange (gain) loss (854) 304
____________ ____________
35,835 25,464
____________ ____________
Operating income 2,955 548
Other income (expense)
Interest income 161 916
Interest expense (4,818) (4,804)
Loss on disposal of assets (45) (12)
____________ ____________
(4,702) (3,900)
____________ ____________
Loss before income taxes (1,747) (3,352)
Income taxes 835 1,130
Minority Interests (33) (20)
____________ ____________
Net Loss (945) (2,242)
____________ ____________
Additional financial information
EBITDA (note 4) 6,352 3,044
12
EBITDA to interest expense, net 1.4x 0.8x
See accompanying notes to unaudited consolidated financial
statements
13
Unaudited Consolidated Statements of Income
Six Months Ended March 31, 2000, 1999
(Expressed in US $000)
2000 1999
Operating revenues
Charterhire income - 5,896
Ferry service income (3b) 69,349 37,227
Logistics and other income 11,427 9,521
Brokers commission - (245)
____________ ____________
80,776 52,399
____________ ____________
Operating expenses
Vessel and other operating costs 58,636 38,504
Depreciation 5,305 3,969
Amortisation of drydocking 992 651
Goodwill amortisation 907 53
General and administrative exps 7,664 6,692
Foreign exchange loss 115 499
____________ ____________
73,619 50,368
____________ ____________
Operating income 7,157 2,031
Other income (expense)
Interest income 427 2,176
Interest expense (9,898) (9,835)
Breakage costs on termination
of capital leases (1,236) -
Gain on disposal of assets 88 1,992
____________ ____________
(10,619) (5,667)
____________ ____________
Loss before income taxes (3,462) (3,636)
Income taxes 1,285 1,325
Minority Interests (53) (59)
Net Loss (2,230) (2,370)
____________ ____________
Additional financial information
EBITDA (note 4) 11,449 8,696
14
EBITDA to interest expense, net
(excluding capital lease
breakage costs) 1.5x 1.1x
See accompanying notes to unaudited consolidated financial
statements
15
Unaudited Consolidated Balance Sheets
As of March 31, 2000, 1999
(Expressed in US$000)
2000 1999
Assets
Current assets
Cash and cash equivalents 8,668 32,317
Cash held in escrow and blocked deposits 3,335 54,972
Trade accounts receivable 28,446 20,189
Other receivables 1,708 3,330
Due from joint ventures - 122
Inventories 1,980 1,137
Prepaid expenses and accrued income 5,645 1,938
____________ ____________
49,782 114,005
Land and buildings 18,910 14,245
Vessels and equipment 141,149 138,621
Vessels under construction 35,776 53,440
Loans to joint ventures 3,962 4,083
Other investments 560 567
Goodwill, net 30,610 2,102
Deferred charges, net 9,252 7,625
Pension fund debtor 5,384 4,960
____________ ____________
Total assets 295,385 339,648
____________ ____________
Liabilities and shareholders equity
Current liabilities
Current maturities of long-term debt 1,471 1,685
Capital lease obligations 550 3,303
Trade accounts payable 9,457 12,927
Accrued expenses 5,883 3,521
Accrued interest - ship mortgage notes 5,001 4,977
Due from joint ventures 76 -
Other creditors 2,753 2,370
____________ ____________
25,191 28,783
____________ ____________
Long-term liabilities
Long-term debt 39,058 57,325
Ship mortgage notes 172,754 172,483
Capital lease obligations 2,715 14,168
Other creditors 1,977 1,833
Deferred taxation 12,266 14,250
____________ ____________
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Total liabilities
253,961 288,842
____________ ____________
Shareholders' equity
Share capital 21 21
Accumulated other comprehensive income:
cumulative translation adjustment (1,097) 223
Retained earnings 42,500 50,562
____________ ____________
Total shareholders' equity 41,424 50,806
____________ ____________
Total liabilities and shareholders'
equity 295,385 339,648
____________ ____________
See accompanying notes to unaudited consolidated financial
statements
17
Unaudited Consolidated Statements of Cash Flows
Six Months Ended March 31, 2000, 1999
(Expressed in US$000)
2000 1999
Operating Activities
Net income (loss) (2,230) (2,370)
Amortisation of drydocking and
deferred charges 992 788
Amortisation of ship mortgage
notes discount 135 137
Depreciation 5,305 3,969
(Gain) loss on disposition of
fixed assets (87) (1,992)
Foreign exchange adjustment (1,506) (383)
Goodwill amortisation 907 53
(Increase) decrease in pension debtor (108) (10)
(Increase) decrease in trade debtors 1,670 (2,942)
(Increase) decrease in other debtors 3,920 2,562
(Increase) decrease in stock (184) 667
(Increase) decrease in prepayments
and accrued income (4,785) 1,964
Increase (decrease) in trade creditors (138) 1,772
Increase (decrease) in other creditors (2,242) (9,536)
Increase (decrease) in accrued expenses (1,952) (3,551)
Increase (decrease) in deferred
tax liability (906) (1,325)
Net cash (used) in operating activities (1,209) ( 10,197)
____________ ____________
Investing activities
Additions to vessels and equipment (1,535) (2,744)
Additions to vessels under construction (18,731) (26,204)
Additions to land and buildings (6,000) -
Purchase of subsidiary companies,
net of cash acquired (34,885) (1,035)
Proceeds from sale of capital assets 44,088 66,550
____________ ____________
(17,063) 36,567
____________ ____________
Financing activities
Proceeds from long-term debt 17,100 8,550
Repayment of long-term debt (43,529) (1,056)
Due to joint ventures 782 1,876
Repayments of capital leases (13,339) (1,925)
Proceeds from capital leases - 1,305
Deferred charges paid (66) (770)
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____________ ____________
(39,052) 7,980
____________ ____________
Net increase (decrease) in cash
and cash equivalents (57,324) 34,350
Cash and cash equivalents at
beginning of period 69,327 52,939
____________ ____________
Cash and cash equivalents at
end of period 12,003 87,289
____________ ____________
See accompanying notes to unaudited consolidated financial
statements
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Notes to Unaudited Consolidated Financial Statements
March 31, 2000, 1999
1. Interim accounting policy
In the opinion of management of Cenargo International Plc
(the "Company") the accompanying unaudited consolidated
financial statements include all adjustments, consisting only
of normal recurring adjustments, necessary to present fairly
in accordance with accounting principles generally accepted
in the U.S. the financial position of the Company and the
results of operations and cash flows for the six months ended
March 31, 2000 and 1999. Although the Company believes that
the disclosure in these financial statements is adequate to
make the information presented not misleading, certain
information and footnote information normally included in
interim financial statements prepared in accordance with
generally accepted accounting principles has been condensed
or omitted pursuant to the rules and regulations of the
Securities and Exchange Commission. Results of operations
for the six months ended March 31, 2000 and 1999 are not
necessarily indicative of what operating results may be for
the full year.
2. Changes in shareholders' equity
Cumulative Ordinary
translation share Retained
adjustment capital earnings
Balance at September 30, 1998 $ 384 $ 21 $ 52,933
Net income (loss) (162) - (2,370)
_________ ________ ________
Balance at March 31, 1999 $ 222 $ 21 $ 50,563
========= ======== ========
Balance at September 30, 1998 $ 428 $ 21 $ 44,730
Net income (loss) (1,525) - (2,230)
_________ ________ ________
Balance at March 31, 2000 $ (1,097) $ 21 $ 42,500
========= ======== ========
3. Contingent liabilities and assets
(a) The Company insures the legal liability risks for its
shipping activities with the Steamship Mutual, UK Mutual
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and North of England mutual protection and indemnity
associations. As a member of mutual associations, the
Company is subject to calls payable to the associations
based on the companys claims record in addition to the
claims record of all other members of the associations.
A contingent liability exists to the extent that the
claims records of the members of the associations in the
aggregate show significant deterioration which result in
additional calls on the members.
21
Notes to Unaudited Consolidated Financial Statements
March 31, 2000, 1999
(b) The Company has entered a claim for damaged in the
amount of Spanish Pesetas 3,800,000 ($21.5 million)
against Ministeria de Comunicaciones, Transportes y
Medio Ambiente now Ministreria De Fomento relating to
the company being prevented from operating a ferry
service between Spain and Morocco. The Company is
actively pursuing the case. The Company has an agreement
with the Spanish government that one billion pesetas
will be paid on each of the deliveries of RoPax three
and four as partial settlement of this claim. This is
approximately $11.5 million of which $8.0 million has
been recorded as ferry service income in the Statement
of Income to date, $1.5 million in the year ended
September 30, 1999 and $6.5 million in the six months
ended March 31, 2000.
4. Segment Information
The Company has adopted FASB Statement No. 131, Disclosures
about Segments of Business Enterprise and Related
Information. The Company is managed in three operating
segments: Irish Sea Ferries, Ferrimaroc and Logistics and
Other Activities. Corporate includes certain central overhead
costs, central financing costs and other general corporate
income and expenditure.
The Company utilises EBITDA as a measure of segmental
performance. The Company defines EBITDA as net income (loss)
before taxes, interest expense, interest income,
depreciation, provision for impairment in value of vessels,
amortisation of dry-docking and special survey costs,
amortisation of goodwill, gain or loss from joint ventures
and minority interest.
Certain financial information is presented below: amounts are
in thousands of US Dollars.
Irish Sea Logistics
Ferries Ferrimaroc and Other Corporate Total
Three Months to
March 31, 2000
Revenue 31,796 1,809 5,185 - 38,790
EBITDA 6,498 (539) 85 308 6,352
Tangible assets 157,897 16,359 9,691 11,888 195,835
Capital expenditure 10,181 - 1,125 - 11,306
22
Three months to
March 31, 1999
Revenue 15,736 2,368 5,069 2,839 26,012
EBITDA 3,464 (848) 74 354 3,044
Tangible assets 183,232 2,912 2,076 18,086 206,306
Capital expenditure 18,954 - 1,444 - 20,398
Six months to
March 31, 2000
Revenue 65,605 3,744 11,427 - 80,776
EBITDA 16,273 (1,082) 372 (1,114) 14,449
Capital expenditure 18,731 - 7,535 - 26,266
Six months to
March 31, 1999
Revenue 32,848 4,379 9,521 5,651 52,399
EBITDA 9,185 (2,087) (137) 1,735 8,696
Capital expenditure 27,504 - 1,444 - 28,948
23
Notes to Unaudited Consolidated Financial Statements
March 31, 2000, 1999
4. Segment Information (continued)
EBITDA for all reportable segments differs from consolidated
income (loss) before income taxes reported in the
consolidated statements of income as follows: amounts are in
thousands of US Dollars:
Three months Six months
Ended March 31 Ended March 31
2000 1999 2000 1999
EBITDA 6,352 3,044 14,449 8,696
Reconciling items:
Depreciation (2,552) (2,147) (5,305) (3,969)
Amortisation of goodwill (455) (30) (907) (53)
Amortisation of drydocking (435) (331) (992) (651)
Net interest expense (4,657) (3,888) (10,707) (7,659)
_____________________________________
Loss income before
income taxes (1,747) (3,352) (3,462) (3,636)
_____________________________________
24
FLEET LIST AT MARCH 31, 2000
Year
Vessel Name Vessel Type Capacity Built Flag
MERCHANT BRAVERY C RoRo 40 cars 1978 Bahamas
100 trailer units
MERCHANT BRILLIANT C RoRo 40 cars 1979 Bahamas
100 trailer units
MERCHANT VENTURE C RoRo 55 trailer units 1979 British (Isle of
Man)
RIVER LUNE C RoRo 49 cars 1983 Bahamas
93 trailer units
SAGA MOON C RoRo 50 cars 1984 British (Gibraltar)
72 trailer units
SPHEROID RoRo 53 trailer units 1971 British (Isle of
Man)
MISTRAL C Passenger 2,386 passengers 1981 Bahamas
/Car Ferry 700 cars
SCIROCCO C Passenger 1,315 passengers 1974 Bahamas
/Car Ferry 296 cars
30 trailer units
DAWN MERCHANT C RoPax 250 passengers 1998 British (Isle of
136 trailer units Man)
BRAVE MERCHANT C RoPax 250 passengers 1999 British (Isle of
136 trailer units Man)
NORTHERN MERCHANT* RoPax 250 passengers 2000 British
136 trailer units
HULL 290 RoPax 250 passengers expected British
136 trailer units 2000
LAGAN VIKING** RoPax 330 passengers 1997 Italian
180 trailer units
MERSEY VIKING** RoPax 330 passengers 1997 Italian
180 trailer units
C Collateral vessel securing 9-3/4% Ship Mortgage Notes
25
* Operated under an operating lease.
** Operated under time charters expiring in September 2001 and January 2002
26
SIGNATURES
Pursuant to the requirements of the Securities Exchange
Act of 1934, the registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly
authorized.
CENARGO INTERNATIONAL PLC
(registrant)
Dated: June 12, 2000 By: /s/ Michael Hendry
___________________
Michael Hendry
Chairman
27
02442003.AA6