Pre-close trading update
July 23 2009 - 2:00AM
UK Regulatory
TIDMTGE
RNS Number : 1246W
TGE Marine AG
23 July 2009
TGE Marine AG
("TGE", "the Company" or "the Group")
Pre-Close Trading Update
TGE Marine AG (AIM: TGE), a world leader in engineering services for the design
and construction of gas carriers and offshore units, provides the following
pre-close trading update ahead of announcing its preliminary results for the
year ended 30 June 2009 on 23 September 2009.
As announced in its trading update of November 2008, since the second half of
2008 the Company has experienced challenging conditions in its core LPG and
Ethylene carrier markets. The continued instability in the global macro-economic
environment, together with the dramatic tightening of credit markets, has to the
Company's knowledge, resulted in no major contracts for small / medium
semi-refrigerated gas carriers being placed during the 12 months ending June
2009.
Nevertheless, given the continued need to replace aging ships, the Group is now
seeing increased levels of new build enquiries from clients and expects the
market to start to recover during the forthcoming year. The increase in new
build interest, combined with the Group's leading position in these core markets
and its strong cash reserves, leads the Board to believe that the company is
well placed to benefit from a market recovery.
Operational highlights
* The Group's preliminary results for the year ended 30 June 2009 are anticipated
to be in line with expectations.
* TGE is currently working on 21 contracts for smaller and middle-sized ethylene
and LPG ships, which are expected to be completed in FY 2010 and 2011.
* As announced in the Group's interim results for the 6 months ended 31 December
2008, with the reduction in TGE's order book, the Company has successfully
implemented a programme of cost cutting measures, including the short labor
scheme funded by the German Government.
* These cost cutting measures managed to offset the lower than expected levels of
interest received (due to weaker interest rates) during FY 2009. The Company
expects that such initiatives to reduce the Group's cost base will lead to
overhead reductions of more than 20% for FY 2010 vs. FY 2009.
* Management is pleased to announce that on 15 May 2009, TGE delivered the world's
first combined small LNG / Ethylene / LPG Carrier.
* The Group continues to be well capitalized with substantial free cash reserves
and no debt.
Outlook
* The economic turmoil of recent months interrupted orders for new build gas
carriers, however the renewal process will have to restart and indeed make up
for the period of inactivity. With TGE's leading market position, the Board
expects to benefit from significant new orders when the market returns.
* The strategic drivers for investment in TGE's new markets of small scale LNG and
CO2 storage and transportation remain valid in the current economic climate.
While projects may be delayed, TGE's diversification into these markets is
expected to provide strong new growth opportunities for TGE's longer term
business.
* The combination of reduced costs, a well capitalized balance sheet, revitalized
core markets and diversification into new products gives the Board confidence in
the future prospects for the Group.
Results presentation
* Following the announcement of the results, an analyst briefing will be held at
09.30 BST on 23 September at the offices of Caledonia Investments, 30 Buckingham
Gate, London SW1E 6NN.
Manfred Küver, Chief Executive of TGE, commented:
"The Company remains in robust financial health, despite the effects of the
economic environment. The Group has taken timely action to reduce its cost base
and is ready to take advantage of the expected up turn in its core markets. We
are currently seeing good evidence of improvement in sentiment amongst ship
builders and owners".
Enquiries:
+------------------------------------+----------------------+-----------------------+
| TGE Marine AG | | +49 (0)228 604 480 |
+------------------------------------+----------------------+-----------------------+
| Dr Manfred Küver | Chief Executive | |
| | Officer | |
+------------------------------------+----------------------+-----------------------+
| Steffen Schober | Chief Financial | |
| | Officer | |
| | | |
+------------------------------------+----------------------+-----------------------+
| Singer Capital Markets Limited | +44 (0)20 3205 7500 |
+-----------------------------------------------------------+-----------------------+
| Jos Trusted | | |
+------------------------------------+----------------------+-----------------------+
| Richard Savage | | |
+------------------------------------+----------------------+-----------------------+
| | | |
+------------------------------------+----------------------+-----------------------+
| Pelham Public Relations | | +44(0)20 7337 1500 |
+------------------------------------+----------------------+-----------------------+
| Mark Antelme | | |
| Henry Lerwill | | |
| | | |
+------------------------------------+----------------------+-----------------------+
This information is provided by RNS
The company news service from the London Stock Exchange
END
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