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Davie Yards Inc. releases its second quarter results for 2009

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  Published in House and Home on Friday, August 14th 2009 at 15:37 GMT, Last Modified on 2009-08-14 15:37:13 by Market Wire
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 LEVIS, QC, Aug. 14 /CNW/ - Davie Yards Inc. ("Davie" or the "Corporation") (TSX: DAV) today released its financial and operating results for the six-month period ended June 30, 2009. Davie has been focused in the second quarter on resuming operations at the shipyard following the temporary shut-down period and on negotiating the major remaining part of the financial restructuring of the Corporation. Financial Highlights: Revenue for the six-month period ended June 30, 2009 was US$44.5 million and net loss was US$9.5 million compared to revenue of US$22.7 million and net loss of US$54.8 million in the corresponding period of 2008. This difference between the six-month period ended June 30, 2009 and the corresponding period of 2008 results mainly from a decrease in the Corporation's negative margin, general and administrative expenses and derivative instruments fair value adjustment. The loss was mainly caused by the shutdown of the Corporation's operations during the first quarter, delays in the ramp-up of yard operations in the second quarter, a foreign currency loss and delays relating to one of the Corporation's clients obtaining financing from Export Development Canada. Future Outlook: "Commercial shipbuilding markets continue to be affected by the ongoing financial crisis, but the long-term outlook for complex offshore construction vessels remains promising. We have 1,250 employees, and relations with the unions are good. We have reached new agreements with major suppliers for the Cecon vessels and we are now negotiating supplies for the Ocean Hotels vessels. Price increases for the vessels were accepted by our clients, and a private placement has been successfully concluded. Support by the Government of Québec and Investissement Québec as well as the Government of Canada and Export Development Canada have been given through various loan agreements. Good relations, confidence and support from major stakeholders are necessary to achieve future success" stated Mr. Steinar Kulen, Davie's Chief Executive Officer. Going Concern: The Corporation's cash and cash equivalents and committed sources of cash may not be presently sufficient to fund expected cash requirements throughout the next 12 months. The ability of the Corporation to continue as a going concern is dependent upon raising additional financing and completing its financial restructuring plan, which includes one of the Corporation's clients obtaining financing from Export Development Canada to meet its contractual obligations towards the Corporation and pay the instalments due under its construction contracts. The Corporation began working on its financial restructuring plan during second half of 2008. As part of this plan, the Corporation reached agreements with its clients for price increases of US$95 million on their existing contracts and raised US$20 million of equity through a private placement. In July 2009, it further entered into an interim loan agreement of US$40 million with Export Development Canada and loan agreements in an aggregate amount of CDN$53.5 million with Investissement Québec. Completion of the financial restructuring also requires the funding of a $100 million loan facility to Ocean Hotels plc., which is currently being negotiated with Export Development Canada. The outcome of these matters is dependent on a number of items outside the Corporation's control. As a result, there is uncertainty as to whether the Corporation will have the ability to continue as a going concern. About Davie Yards Inc. Davie Yards Inc. owns and operates the Davie yard in Quebec. With over 180 years of operating experience and approximately 1,250 employees, the shipyard is the largest in Canada and among the largest and most sophisticated in North America. The Corporation has a focus on building large and complex offshore service vessels and rigs, and other sophisticated vessels for commercial and governmental use. Its shares are traded on the Toronto Stock Exchange (DAV). News and information are available at [ www.davie.ca ]. Forward-Looking Statements This news release contains forward-looking information within the meaning of applicable Canadian securities legislation. These statements include those relating to statements that are not historical facts, and reflect the current intentions, plans, expectations and beliefs of Davie's management ("Management"). Such forward-looking statements reflect Management's current beliefs and are based on information currently available to Management. Forward-looking statements involve known and unknown risks, uncertainties and other factors outside Management's control. A number of factors could cause actual results of Davie to differ materially from the results predicted in the forward-looking statements, including, but not limited to, risks associated with the Corporation's fiscal results, completion of its financial restructuring plan, working capital, foreign exchange and interest rate risk management, late delivery of vessels, fixed-price contracts, refund guarantees, high fixed costs, the employment guarantee, the satisfaction of the conditions under the Investissement Québec settlement and other factors referenced in Davie's continuous disclosure filings. Although the forward-looking statements contained herein are based upon what Management believes to be reasonable assumptions, Management cannot assure investors that actual results will be consistent with these forward-looking statements. Certain assumptions underlying the forward-looking statements contained in this news release include Management's assumptions regarding market outlook for the construction of complex offshore vessels as well as the assumptions that new vessels will be delivered on schedule and that the Corporation will attract and retain key personnel in key positions. These forward-looking statements are made as of the date of this release, and Management assumes no obligation to update or revise them to reflect new events or circumstances, except as required pursuant to applicable securities laws. Readers are cautioned not to place undue reliance on these forward-looking statements. For additional information with respect to certain of these and other assumptions and risks, please refer to the Corporation's Management's Discussion and Analysis for quarter ended June 30, 2009 and the year ended December 31, 2008 as well as the Financial Statements for the quarter ended June 30, 2009 and the year ended December 31, 2008, and the Corporation's Annual Information Form dated March 29, 2009.

For further information: Davie Yards Inc., Steinar Kulen, CEO, (418) 837-5841 Ext. 2101, + 47 901 05 698, [ steinar.kulen@davie.no ]