Annual Report and Financial Statements. 102 nd financial year

Transcription

1 annual report 2009

2 Year ended 31st december 2009 Annual Report and Financial Statements 102 nd financial year Premuda This report is based on Premuda's Annual Report For the year ended 31 December The Premuda Financial Statements were audited by Deloitte & Touche S.p.A. and are available in Italian. 000

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4 table of contents Board of Directors Group's Structure Group s Fleet Financial Highlights Premuda S.p.A.: Management Report Financial Statements Premuda Group: Management Report Financial Statements Notes

5 Navigare by Raimondo Sirotti painting realized for the 100 th Anniversary of the Company. 4

6 Board of directors Board of directors chairman deputy chairman managing director directors general managers Alcide Rosina Giacomo Costa Stefano Rosina Raffaele Agrusti Amerigo Borrini Antonio Dinia Antonio Gozzi Anna Rosina Alessandro Zapponini StefanoZara Stefano Rosina Marco Tassara Board of statutory auditors chairman auditors alternate auditors Alberto Garibotto Giorgio Carbone Giuseppe Alessio Vernì Edoardo Lagomarsino Luigi Barberi Auditor Deloitte & Touche S.p.A. The mandate of the Board of Directors and of the Board of Statutory Auditors will expire once the Financial Statements as at 31st December 2010 have been approved. 5

7 Baltic Sea: the wake of Ice Class aframax Four Atlantica, sailing in icy waters. 6

8 Group s Structure Operative Companies as at 31 st December 2009 Premuda Spa 100% 50% Premuda International Sah Four Jolly Spa Luxembourg Genoa m/t. Four Wind m/t. Four Smile m/t. Four Island m/t. Four Bay m/t. Framura m/v. Four Springs m/t. Four Moon m/v. Doric Spirit * 100% Four Vanguard Serviços e Navegaçao Lda. Madeira FPSO Four Rainbow 100% Australian FPSO Management Pty. Ltd. Perth Australia 100% Moon Shipping Serviços e Navegaçao Lda. Madeira m/t. Four Atlantica ** m/t. Four Antarctica ** 90% Premuda (Monaco) Sam Monaco 100% Four Handy Ltd. United Kingdom m/v. Four Aida m/v. Four Earth m/v. Four Shinano* m/v. Four Kitakami * m/v. Four Mogami * TBN bulk 35,000 dwt (2010) TBN bulk 35,000 dwt (2010) 50% Premuda Chartering Navegaçao Lda. Madeira m/v. Four Sky 114,700 dwt (2010) m/v. Four Tide 114,700 dwt (2011) m/v. Four Sea 114,700 dwt (2012) 100% Brig Shipping Lda. Madeira TBN bulk 35,000 dwt (2011) TBN bulk 35,000 dwt (2011) TBN bulk 35,000 dwt (2011) TBN bulk 35,000 dwt (2011) TBN bulk 35,000 dwt (2012) 100% Cordier Navegaçao Lda. Madeira TBN bulk 34,000 dwt (2010) TBN bulk 34,000 dwt (2010) Holding Company ShipManagement Company Shipowning Company * : long term timecharter in ** : long term bareboat out 7

9 M/t. Four Wind, 115,700 ds dwt aframax product tanker, delivered July

10 Group s Structure Operative Companies as at 31 st March 2010 Premuda Spa 100% 50% Premuda International Sah Four Jolly Spa Luxembourg Genoa m/t. Four Wind m/t. Four Sky m/t. Four Smile m/t. Four Island m/t. Four Bay m/t. Framura m/v. Four Springs m/t. Four Moon m/v. Doric Spirit * 100% Four Vanguard Serviços e Navegaçao Lda. Madeira FPSO Four Rainbow 100% Australian FPSO Management Pty. Ltd. Perth Australia 100% Moon Shipping Serviços e Navegaçao Lda. Madeira m/t. Four Atlantica ** m/t. Four Antarctica ** 90% Premuda (Monaco) Sam Monaco 100% Four Handy Ltd. United Kingdom m/v. Four Aida m/v. Four Earth m/v. Four Shinano* m/v. Four Kitakami * m/v. Four Mogami * m/v. Four Nabucco (2010) m/v. Four Otello (2010) 50% Premuda Chartering Navegaçao Lda. Madeira m/v. Four Tide 114,700 dwt (2012) m/v. Four Sea 114,700 dwt (2013) 100% Brig Shipping Lda. Madeira TBN bulk 35,000 dwt (2011) TBN bulk 35,000 dwt (2011) TBN bulk 35,000 dwt (2011) TBN bulk 35,000 dwt (2011) TBN bulk 35,000 dwt (2012) 100% Cordier Navegaçao Lda. Madeira TBN bulk 34,000 dwt (2011) TBN bulk 34,000 dwt (2012) Holding Company ShipManagement Company Shipowning Company * : long term timecharter in ** : long term bareboat out 9

11 Group s Fleet st at 31 December 2009 As at 31 st December 2009 the Group's Fleet consists of the following: name type hull design year built dwt tankers Four Smile Four Wind (50%) Four Antarctica * Four Atlantica * Four Island Four Bay Framura Four Moon suezmax tanker aframax product aframax Ice Class aframax Ice Class aframax tanker aframax tanker aframax tanker panamax tanker DH DH DH DH DH DH DH DH / , , , ,900 94,200 94,200 94,200 64,000 total owned tankers in service 851,800 FPSO 9 Four Rainbow FPSO DH 1992/ ,900 total owned FPSO in service 80,900 bulk carriers Four Springs Four Earth Four Aida minicape bulk panamax bulk handy bulk DH DB DB 1992/ ,000 77,100 34,400 total owned bulk carriers in service 220,500 total owned Fleet in service 1,153,200 new buildings Four Sky (50%) Four Tide (50%) Four Sea (50%) TBN TBN TBN TBN TBN TBN TBN TBN TBN aframax product aframax product aframax product handy bulk handy bulk handy bulk handy bulk handy bulk handy bulk handy bulk handy bulk handy bulk DH DH DH DH DH DB DB DB DB DB DB DB , , ,700 34,000 34,000 35,000 35,000 35,000 35,000 35,000 35,000 35,000 total new buildings on order 657,100 chartered in Doric Spirit ** Four Shinano ** Four Kitakami ** Four Mogami ** handymax bulk handymax bulk handymax bulk handymax bulk DB DB DB DB ,400 56,700 55,500 55,500 total chartered in tonnage 220,100 total fleet as at 31 st December ,030,400 * : renamed Stena Antarctica and Stena Atlantica (longterm bareboat out) ** : longterm timecharter in 10

12 Group s Fleet st at 31 March 2010 As at 31 st March 2010 the Group's Fleet consists of the following: name type hull design year built dwt tankers Four Smile Four Wind (50%) Four Sky (50%) Four Antarctica * Four Atlantica * Four Island Four Bay Framura Four Moon suezmax tanker aframax product aframax product aframax Ice Class aframax Ice Class aframax tanker aframax tanker aframax tanker panamax tanker DH DH DH DH DH DH DH DH DH / , , , , ,900 94,200 94,200 94,200 64,000 total owned tankers in service 967,500 FPSO 10 Four Rainbow FPSO DH 1992/ ,900 total owned FPSO in service 80,900 bulk carriers Four Springs Four Earth Four Aida minicape bulk panamax bulk handy bulk DH DB DB 1992/ ,000 77,100 34,400 total owned bulk carriers in service 220,500 total owned Fleet in service 1,268,900 new buildings Four Tide (50%) Four Sea (50%) TBN TBN TBN TBN TBN TBN TBN TBN TBN aframax product aframax product handy bulk handy bulk handy bulk handy bulk handy bulk handy bulk handy bulk handy bulk handy bulk DH DH DH DH DB DB DB DB DB DB DB , ,700 34,000 34,000 35,000 35,000 35,000 35,000 35,000 35,000 35,000 total new buildings on order 542,400 chartered in Doric Spirit ** Four Shinano ** Four Kitakami ** Four Mogami ** handymax bulk handymax bulk handymax bulk handymax bulk DB DB DB DB ,400 56,700 55,500 55,500 total chartered in tonnage 220,100 total fleet as at 31 st March ,031,400 * : renamed Stena Antarctica and Stena Atlantica (longterm bareboat out) ** : longterm timecharter in 11

13 San Francisco Bay: a relaxing break on the rudder of m/v. Four Aida. 12

14 Financial highlights Fixed assets Liabilities net of current assets Net equity (1) ( /000) 430, , ,985 ( /000) 379, , ,103 ( /000) 347, , ,438 ( /000) 324, , ,208 ( /000) 285, , ,292 EBITDA Financial items (2) Depreciation/impairment Cashflow (3) Net result (1) Dividends (4) Extraordinary dividends (5) ( /000) 34,286 7,718 46,550 26,742 (19,803) 2,817 ( /000) 40,217 9,572 24,138 27,874 3,750 2,817 ( /000) 69,745 7,909 23,809 59,040 33,118 8,451 8,450 ( /000) 58,448 5,457 24,136 52,129 24,108 8,451 ( /000) 64,865 6,129 29,299 56,807 25,376 8,451 Net result per share (1) Dividend per ordinary share Dividend per saving share ( ) (0.14) ( ) ( ) ( ) ( ) Debt/equity Cashflow/financial charges Average cost of debt Return on investment (ROI) Return on equity (ROE) (1) Cashflow/net equity 2.4% 8.1% 11.3% 15.2% 5.4% 10.9% 1.9% 14.1% 5.5% 19.5% 16.0% 28.5% 4.8% 17.1% 13.0% 27.3% 4.0% 22.6% 15.2% 32.2% (1): Group's interest (2): exchange differences not included (3): net profit + depreciation + impairment (4): on profit for the year paid during the following year (5): paid in December 2007 to celebrate the Company's Centennial 13

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16 Premuda S.p.A. Management Report 15

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18 Dear Shareholders, First of all we wish to remind you that your Company's Board of Directors for the years 2008, 2009 and 2010 include Raffaele Agrusti, Amerigo Borrini, Antonio Dinia, Giacomo Costa, Antonio Gozzi, Alcide Rosina, Anna Rosina, Stefano Rosina, Alessandro Zapponini and Stefano Zara. The Chairman of the Board is Alcide Rosina, whose powers include, amongst others, legal representation towards third parties as well as ordinary and extraordinary administration, excluding certain acts reserved by law to the Board as well as acts having financial relevance in excess of certain limits, such as: purchase and sale of ships; contracts for the employment of vessels exceeding 60 months; acquisition and sale of subsidiaries; granting of medium/longterm loans to subsidiaries; provision of guarantees. The Managing Director is Stefano Rosina, legal representative towards third parties, in charge of running and coordinating the commercial activity and fleet operations, as well as the activity and administration of Group Companies. The Deputy Chairman is Giacomo Costa, Independent Director. The Board has established two Committees, one for Internal Control and one for Remuneration. The purpose of the Committee for Internal Control is to address issues related to the company's activities with proposals and consultancy functions. Its members are Giacomo Costa, Antonio Dinia and Stefano Zara. The meetings of this Committee are attended by the Chairman of the Board of Statutory Auditors. The members of the Committee for Remuneration are the Chairman Alcide Rosina, Raffaele Agrusti and Antonio Gozzi. The role of this Committee is to advise the Board of Directors on matters relating to the remuneration of the Chairman and the Managing Director and to set the remuneration criteria for the Senior Management of the Company and the Group. The meetings of this Committee are also attended by the Chairman of the Board of Statutory Auditors. In 2009, the Board of Directors convened on six occasions. The meetings were all attended by the Board of Statutory Auditors. The attendees received, pursuant to a wellestablished procedure, updated information on: market performance, commercial coverage and technical management of the Fleet, dynamics of costs and profit/loss, performance and activity of subsidiaries, financial position, as well as all other operations and events concerning management. During the Financial Year there were no unusual transactions in relation to the ordinary business management to report and there were no significant nonrecurrent transactions with related parties or otherwise generating a conflict of interest. 17

19 In 2009, as in the year before, the only intergroup transactions that took place concerned the Group's operational structure and were all concluded with or between subsidiaries or affiliated companies. These transactions mainly consisted of management activities, timecharters and financial support to which ordinary fees or remunerations were applied, always consistent with normal practice and carried out at market value. All transactions, whether intragroup or with related parties, are summarised in the appendix to the Notes. Subsidiaries or affiliates The activities carried out by our subsidiaries and affiliates during the Financial Year are detailed hereunder. Nonetheless, we refer you to the Notes for further information on each company. 1.0 Four Jolly S.p.A., Genoa, setup in June 2009 as a 50/50 joint venture with the Messina Group, is the owner from July 2009 of the new 115,700 dwt aframax product tanker Four Wind and from March 2010 of the sister vessel Four Sky. The company registered a loss of 225, Premuda International S.A.H., Luxembourg, a whollyowned subsidiary, is the holding company for the Group's foreign assets. Its Financial Statements for 2009 show a loss of 7,681,165 (a loss of 4,545,248 in 2008). Premuda International S.A.H. owns the following companies: Four Handy Ltd., United Kingdom, a whollyowned subsidiary, is the owner of the two bulk carriers Four Earth and Four Aida (delivered 1 st October 2009), managed under the UK tonnage tax scheme. The company substituted Brig Shipping Lda. in the shipbuilding contracts for two 35,000 dwt handy bulk carriers (sister vessels of Four Aida) to be delivered by the Korean shipyard SPP in The company also controls (under long term time charters with purchase options) three supramax vessels (Four Shinano, Four Kitakami and Four Mogami). The company, which closed its first year of activity (2008) with a loss of $ 1,436,136, registered a profit of $ 1,432,149 in Moon Shipping Serviços and Navegaçao Lda., Madeira, whollyowned, is the owner of two aframax IceClass tankers, delivered in May and November 2006 and chartered to the Stena Group under longterm bareboat agreements. The company closed the Financial Year with a profit of 1,443,899 after depreciation for /mln 9.3 (loss of 3,741,009 after depreciation for /mln 9.3 in 2008). 18

20 2.3 Four Vanguard Serviços and Navegaçao Lda., Madeira, whollyowned, owner of the FPSO Four Rainbow (ex Four Vanguard), deployed in Australia since 2003 for crude oil extraction. The unit ceased the production in May 2009 and moved to Singapore where underwent significant repairs and class renewal activity. Please refer to the consolidated Annual Report for further details. The company booked a loss of 2,791,635 (a loss of 6,998,110 in 2008). 2.4 Brig Shipping Lda., Madeira, whollyowned, has on order five 35,000 dwt bulk carriers from the Korean shipyard SPP for delivery 2011/2012. This Company booked a loss of 2,025,017 (profit of 1,307,384 in 2008), mainly attributable to the costs of cancelling (for shipbuilder's reasons) the contracts of two 34,000 dwt bulk carriers ordered to a Vietnamese shipyard Cordier Navegaçao Lda., Madeira, 100% owned by Brig Shipping Lda. has on order two 34,000 dwt bulk carriers from a Vietnamese shipyard with updated expected delivery 2011/2012. This company booked a profit of 40,485 (a loss of 369,172 in 2008). 2.5 Australian FPSO Management Pty Ltd., Australia, whollyowned, in charge of the technical and operational management of the FPSO Four Rainbow. The company booked a profit of AU$ 292,497 (approximately 183,000) after a profit of AU$ 291,320 in Premuda (Monaco) SAM, Monaco, 90%owned, in charge of the commercial and operational management of all of the Group's foreignflagged units, booked a loss of 46,705 (a loss of 143,710 in 2008). 2.7 Premuda Chartering Navegaçao Lda., Madeira, 50%owned. At the year start the company had on order four 114,700 dwt product carriers from Samsung shipyard. The first vessel was delivered in July 2009 and immediately transferred to Four Jolly S.p.A., as well as the second vessel, delivered in March As of today, the company has still on order the last two vessels, expected delivery 2011/2012, with a cumulative investment of approximately US$ 156 Mln, of which US$ 78 Mln are related to third parties. This Company booked a profit of 472,649 versus a loss of 39,805 in The fully controlled Premuda (Atlantic) Inc., Delaware, was basically dormant and will be liquidated as soon as practicable. The fully controlled JEP Naveaçao Lda., Madeira, merged with Premuda Bulk Navegaçao Lda., Madeira, Panamax Navegaçao Lda., Madeira, and Suezmax Navegaçao Lda., Madeira, closing the year almost at breakeven. Please refer to the Consolidated Financial Statements for a more detailed analysis of the markets in which the Company and its subsidiaries operate. 19

21 Miscellaneous data and information In accordance with current regulations in several EU countries, Italy introduced, with the tonnage tax, a flatrate income tax for shipping companies whereby income generated by ships listed in the International Register is taxed on tonnage. The adoption of this new tax regime is on a voluntary basis, however, once implemented it must remain in force for a minimum period of ten years and must cover all owned units. Premuda S.p.A. formally entered it on 1 st January During the year the average exchange rate Euro/dollar was ( in 2008). At the end of 2009 the Euro/dollar exchange rate was ( at the end of 2008), with a 3.4% yearonyear depreciation of the US currency (but with a 5.3% appreciation on the averages). We remind you that our revenues are predominantly dollardenominated and the fleet value is markedtomarket in the same currency, whereas only some of our costs are normally sustained in dollars. Consequently, a weak dollar generally has a negative effect, both on Balance Sheet and on Profit & Loss. Conversely, the effect of accounting for Dollardenominated loans in Euros at the yearend exchange rate is also to be taken into account. Premuda's common stock was regularly listed on the Stock Exchange. It is to be noted that 4,660,066 shares were exchanged in 2009 (31,033,663 in 2008). The total traded value through the Stock Exchange was /Mln 4.50 (about /Mln in 2008). According to data provided by Borsa Italiana S.p.A., our stock's performance for the year was 2.87% as opposed to % for the MICROCAP index. Based on the data available, as at the end of 2009 the Company had 2,024 shareholders, (3,977 in 2008). At the end of 2009, Investimenti Marittimi S.p.A. (60% Navigazione Italiana S.p.A., 30% Assicurazioni Generali S.p.A. and 10% Duferco Italia Holding S.p.A.) held n. 111,033,237 Premuda ordinary shares (78.88% of the voting rights). As of today, such a participation is unchanged. We point out that Navigazione Italiana S.p.A. is (through Investimenti Marittimi S.p.A.) the sole body in control of Premuda without, however, exercising management and coordination activities, pursuant to art of the Italian Civil Code. The official Italian version of this Annual Report has been audited by Deloitte rd & Touche S.p.A., appointed by shareholders resolution dated 23 April 2007 for the period Deloitte & Touche S.p.A. also issued the limited review of the official Italian version of the Semi Annual Report The mandate of Deloitte & Touche S.p.A. is now expired and a new auditor is to be appointed by Shareholders' resolution, upon proposal of the Board of Statutory Auditors. 20

22 We wish to express all our gratitude to Deloitte & Touche S.p.A. for the precious activity of the past nine years, in the interest of Premuda and their shareholders. In accordance with the provisions of art of the Italian Civil Code, we hereby inform you that: apart apart from a project of a new hull stress monitoring system named MOSES, started in 2008 and continuing in following years, the Company did not carry out any research and development activity; the Company does not own treasury shares; the Company does not own shares or quotas of parent companies; none of the subsidiaries own Company shares; the Company has implemented a hedging strategy through derivative financial instruments to cover risks arising from the variations in exchange rates and interest rates. Further details are available in the Notes to the Financial Statements. Pursuant to the aforesaid art of the Italian Civil Code, we further inform you that: our activity is subject to several laws and rules (local and/or international) on environmental protection, the noncompliance of which could heavily affect the Company's capability to conduct its business. These include, amongst others, air pollution requirements, garbage and/or water disposal, old tonnage recycling, etc. The Company is further exposed to other risks typical for shipping: piracy, war, climate, casualties, etc. Such risks are covered, when feasible, by insurance and limited by a certified quality management system. For further information, please refer to the relevant chapter of the 2009 Annual Report (italian version). As to financial risks, please refer to the Notes; Premuda complies with the Labour Health and Safety Protection regulations and, in particular, has revised its specific risk assessment as per D. Lgs. 81/2008. The shares held and/or traded by Directors, Statutory Auditors and General Managers are mentioned in a specific prospectus drawn up in accordance with art. 79 of the Regulation implementing the Legislative Decree No. 58/98 (T.U.F.) attached to the audited Financial Statements (italian version). All information required by art. 123 bis of T.U.F. can be found in the relevant Report on Corporate Governance and Ownership Structure released concurrently with this Annual Report and available in the Investor Relations section of our website The Company complies with art. 36 a), b) and c) of Regolamenti Mercati Consob on Conditions for listing shares of companies controlling subsidiaries located and subject to Laws outside the European Union. 21

23 A plan for the remuneration of, and incentives to, the Top Management is in force, as recommended by the Remuneration Committee and resolved by the Board of Directors. The plan refers to the years and consists of three elements: a) an annual compensation, based on the financial result logged in each year, equal to 5% of the consolidated net profit generated by the Company exceeding 5% of the consolidated Net Equity at the beginning of the period. This amount is allocated: 50% to the Chairman, 25% to the Managing Director, 10% to the General Manager and the residual 15% is shared amongst other Managers. b) a compensation based on the growth of the Group's net equity in the 3year period, payable at the end of This compensation is equal to 5% of the differential between the Consolidated Net Equity at the end of the period and the Consolidated Net Equity at the beginning of the period, increased by 15%; the proportional allocation is as detailed in item a). c) a nominal stock option plan (socalled phantom stock ) with a compensation equal to the difference between the monthly average of the Premuda stock price on the option allocation date and its price in the week preceding the option declaration, as listed on the Milan Stock Exchange This plan was resolved by the Shareholders' Meeting of 17th April The options refer to a maximum cumulative amount of 2,700,000 shares per year and are to be exercised within 36 months starting from 1st January of the following year. The options refer to 1,350,000 shares for the Chairman, 810,000 for the Managing Director and 540,000 for the General Manager. The initial share value is for the options assigned in 2008 (average stock price in March 2008) and 0.90 for the option assigned in 2009 (average stock price in March 2009). The initial share value for the options to be assigned in 2010 will be the average stock price in March A residual portion of the stock incentive plan for the years is still in place, due to expire at the end of 2010 for the options granted in 2007 (at Euro). In consideration of the Group's results, no compensation for 2009 is expected to be paid to the Top Management pursuant to a) and b) above, however, a provision of about /mln 0.6 has been taken to cover the fair value at the end of 2009 of the residual stock option plans as described in item c). In conformity with the Legislative Decree 196/2003 (concerning the protection of Privacy) the Company has set up the relevant implementation plan chart. 22

24 We hereby inform you that, as already applied for the 2008 Annual Report, the 2009 annual Financial Statements of Premuda S.p.A. have been issued in accordance with the International Financial Reporting Standards (IFRS) as agreed by the International Accounting Standards Board (IASB). The financial position is summarized (in '000 Euros) in the following table; at the end of the financial year our net financial exposure was /Mln (end 2008: /Mln 45.46) with available cash of /Mln Financial Position Financial Position at at Cash Other liquid assets Total liquid assets Shortterm bank debt Shortterm portion of longterm debt Other shortterm debt Total shortterm debt Shortterm net debt Loan to controlled companies Longterm financial credit Longterm bank debt Longterm debt Total longterm net borrowing Total net borrowing 150 4,654 4,804 (9,516) (10,939) (97) (20,552) (15,748) 17,677 17,677 (87,368) (87,368) (69,691) (85,439) 175 5,820 5,995 (1,245) (26,689) (27,934) (21,939) 24,796 24,796 (48,320) (48,320) (23,524) (45,463) At the end of 2009 about two third of Premuda S.p.A.'s loans are Eurodenominated (the residual are Dollars). Borrowing amounts and terms appear to be adequate in relation to the size and quality of our Fleet and its ability to generate sufficient cashflow. We believe that, based on available cash and credit lines, commitments for new investments and expected cashflow, the company will have sufficient financial resources to cover its operating needs and fulfil its obligations at least for the next twelve months. The above considerations are sustained by the expectations of a significant share capital increase, as further detailed in the following pages. As to management conduct of the Company and business outlook, we have no particular issues to underline; nonetheless, we refer Shareholders to the Consolidated Annual Report Significant events after the balance sheet date and business outlook 23

25 Dear Shareholders, Premuda S.p.A. closed the 2009 financial year with a loss of /mln after depreciation charges of /Mln and impairment of 4 vessels of /Mln (net profit of /Mln 8.71 after depreciation charges of /Mln in 2008). The impairment is a nonmonetary negative element, subject to recovery should the reasons which made its implementation advisable cease to exist; anyhow, for next financial years, it will imply lower depreciation charges for about /Mln 2.4 yearly. The criteria used to determine such impairment are explained in the Notes and repeated in the consolidated Annual Report, for Group's purposes. The cashflow for 2009 was /Mln (2008: /Mln 20.71). Dear Shareholders, In order to improve the financial position and meanwhile restore and strengthen the Net Equity (cash inflow, against non monetary losses) and to provide all interested parties within the current shipping and whole economy crisis with a significant positive message, the Board of Premuda S.p.A. (duly empowered by art. 35 of company Bylaw) has today resolved the following Capital Increase: from 70,418, up to 93,890,966.50, thus for maximum 23,472, (partial amount acceptable as per art of Italian Civil Code), by issuing maximum 46,945,483 ordinary shares, 0.50 nominal value, share rights , offered to the actual shareholders at a rate of 1 new share for every 3 shares held, at a price of 0.75 (of which 0.25 as share premium) with a maximum cumulative amount of 35,209,112 (of which 11,736,371 share premium).the Capital Increase is to be finalized within six months from registration of the Board Resolution in the Company Registry. 24

26 Dear Shareholders, as far as result allocation is concerned, we recommend to cover the 2009 losses and to distribute dividends as follows: Net loss of the year 2009 Covered through reserves Covered through retained earnings Residual available retained earnings to ordinary shares to savings shares Retained earnings (20,754,105) 16,445,023 4,309,082 13,262,825 (2,815,230) (2,248) 10,445,347 The above recommendations correspond to an unchanged dividend of 0.02 per common share and 0.03 per savings share. We note that over the period in a completely different scenario the company distributed a total of 0.30 dividend per ordinary share, but we believe the proposed dividend is the maximum sustainable effort to remunerate our shareholders, taking into account the present economic scenario, the troubles affecting financial markets and the significant investment plan started by our Group. After distribution of the proposed dividend and full subscription of the Capital Increase, the shareholders' equity will be: Share capital Share premium Legal reserve Other reserves Retained earnings Total 93,890,967 11,736,371 14,083,650 10,445, ,156,335 equal to 0.69 per each of the 187,781,933 shares post Capital Increase. The Management Report on the Consolidated Financial Statements, as an integral and substantial part of this report, shall provide a proper overview of the Group led by Premuda S.p.A. This Management Report includes yearonyear data on the markets we operate in, fleet performance, costs and revenues as well as significant events occurred after the accountclosing date and a business outlook. As a final note we would like to thank all of our employees, ashore and at sea, for their valuable and professional cooperation, very important and very much appreciated in the present contingency. 31st March 2010 the Board of Directors 25

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28 Premuda S.p.A. Financial Statements 27

29 Premuda S.p.A. Balance Sheet (Euro) ASSETS at at Fixed Assets Tangibile fixed assets Vessels Vessels under construction Land and buildings Other fixed assets Participations Controlled companies Associated companies Other companies Other financial assets Loans Other investments Total Fixed Assets 116,556, ,349, , ,389 69,757,966 55,754,170 14,000,000 3,796 17,679,315 17,676,938 2, ,993, ,034, ,358,657 5,221, , ,798 55,757,966 55,754,170 3, ,796,363 2, ,591,769 Current Assets Inventories Consumables Voyages in progress Receivables Clients Prepayments Other receivables 2,361,591 1,675, ,676 10,959,176 5,157,253 1,601,861 4,200,062 2,063, ,440, Financial current assets Cash and cash equivalents Total Current Assets TOTAL ASSETS 4,804,021 18,124, ,118, ,657 5,755,977 21,498, ,090,028 28

30 LIABILITIES AND SHAREHOLDERS' EQUITY at at Shareholders Equity Share capital Legal reserve Other reserves Retained profit Profit for the year Total shareholders equity 70,418,225 14,083,650 16,445,023 17,571,907 (20,754,105) 97,764,700 70,418,225 14,083,650 16,445,023 9,412,913 8,707, ,067,128 LongTerm Liabilities Bank loans Provisions Provision for staff leaves Total LongTerm Liabilities 87,367, , ,962 88,627,722 48,319,983 1,262, ,629 50,418,861 Current Liabilities Bank loans Derivatives Controlled companies Suppliers Corporate tax Accruals Other debts Total Current Liabilities Total Liabilities TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY 20,455,196 97, ,001 4,161, ,971 4,312,462 5,838,145 35,726, ,353, ,118,524 27,934,092 8,655,976 1,043,149 5,264,540 4,706,282 47,604,039 98,022, ,090,028 29

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32 Premuda S.p.A. Income Statement (Euro) year 2009 year 2008 Net revenue Voyage costs TimeCharter revenues Charter hire Running costs Fleet margin Profit on vessels sale Administrative expenses Depreciation Impairment of assets Operating profit/(loss) Financial items Profit/(loss) before tax Tax on profit Net profit/(loss) for the year 54,307,832 (6,050,749) 48,257,083 (17,948,811) (13,095,594) 17,212,678 9,501,974 (7,286,476) (13,838,230) (22,505,828) (16,915,882) (3,588,223) (20,504,105) (250,000) (20,754,105) 100,535,380 (8,943,141) 91,592,239 (41,672,057) (17,349,582) 32,570,600 (8,586,520) (12,028,302) 11,955,778 (2,793,461) 9,162,317 (455,000) 8,707,317 Net profit/(loss) per share (0.147) Statement of Comprehensive Income (Euro)* year 2009 year 2008 Net result Hedge accounting effect Comprehensive result (20,754,105) 2,267,409 (18,486,696) 8,707,317 (23,980) 8,683,337 (*): as requested by the amended version of IAS 1 applicable starting 1 st January

33 Premuda S.p.A. Cash Flow Statement (Euro) year 2009 year 2008 A) NET CASH POSITION AT YEAR BEGINNING (22,178,115) (13,199,891) B) CASH FLOW FROM OPERATING ACTIVITIES Profit for the year Unrealized exchange differences Interest charges Interest income Tax on income Depreciation Net change in other provisions (Profit)/loss on assets disposal Net change in Staff s leave provision Subtotal: Cash flow from operating activities before working capital changes Change in receivables Change in inventories Change in suppliers and other current liabilities Total cash flow from operating activities (20,754,105) 423,273 3,159,517 (1,431,726) 250,000 36,344,058 (812,249) (9,502,901) (26,667) 7,649,200 3,219,663 (298,148) (5,003,207) 5,567,508 8,707,317 (568,556) 4,865,896 (1,832,961) 455,000 12,028, ,249 (5,305) (102,606) 24,209,336 (4,638,410) 1,669,520 (3,807,308) 17,433,138 C) CASH FLOW FROM INVESTING ACTIVITIES Investments in assets: tangible financial Sale of tangible fixed assets Interest income cashed Total cash flow from investing activities (74,537,556) (14,000,000) 46,171,900 1,431,726 (40,933,930) (8,913,307) 7,068 1,832,961 (7,073,278) D) CASH FLOW FROM FINANCING ACTIVITIES Repayment of bank loan Net change in financial fixed assets Interest charges (cash) Dividends Other changes Total cash flow from financing activities (23,812,936) 7,119,775 (3,725,867) (2,817,478) 2,269,156 41,893,363 (20,698,054) 3,203,021 (4,869,870) (8,450,936) (22,245) (19,338,084) E) CASH FLOW OF THE PERIOD (B + C + D) 6,526,941 (8,978,224) F) NET CASH POSITION AT THE END OF THE PERIOD (A + E) (15,651,174) (22,178,115) 32

34 Statements of changes in Shareholders Equity (Euro) Share Capital Reserve for premium on issued share Legal Reserve Other Reserve Retained Profit Profit for the Year Total As at ,418,225 (1) 14,083,650 (2) 16,445,023 (3) 14,881,615 3,004, ,832, Profit Allocation to legal reserve to dividends to retained profit (8,450,936) 3,004,466 ( ) (8,450,936) Various 1,748 1,748 Hedge accounting effect (23,980) (23,980) 2008 Net Profit 8,707,317 8,707,317 As at ,418,225 (1) 14,083,650 (2) 16,445,023 (3) 9,412,913 8,707, ,067, Profit Allocation to legal reserve to dividends to retained profit (2,817,478) 8,707,317 (8,707,317) (2,817,478) Various 1,746 1,746 Hedge accounting effect 2,267,409 2,267, Net Result (20,754,105) (20,754,105) As at ,418,225 (1) (2) (3) 14,083,650 16,445,023 17,571,907 (20,754,105) 97,764,700 (1): available to cover future losses (2): of which 3,666,410 to be taxed when used other than to cover future losses (3): of which 2,827,699 not to be distributed 33

35

36 Management Report on the consolidated financial statements 35

37

38 Dear Shareholders, In 2009 tanker and bulker markets had similar patterns, in a generally uncertain and depressed economical climate. Factors influencing both markets were: increased tonnage supply: +7% for tankers and nearly +10% for bulkers; reduced tonnage demand: 3.2/4.1% for tankers and 3.0% for bulkers; significantly lower charter rates: a yoy decrease of 63/69% for tankers and 57/65% for bulkers (depending on vesseltype). In 1Q10 both markets markedly improved: +16/56% for tankers and +40/60% for bulkers (except capers, lagging behind). During this period charter rates have been reasonably viable, far from recent years' healthy levels, but significantly better than 2009 rates, which will go on record as the worstever. Market falls have been slowed by widespread port congestion, which kept a sizable share of global fleets (especially the larger bulkers) off the market. Another factor which sustained freight rates has been increased trading volume on certain routes which do not provide backhaul cargoes (e.g. iron ore from Brazil to China) and, therefore, forced ships to ballast back to loading areas. Along with port congestion, this contributed to reducing tonnage available for the cargo volumes due to be carried. Depressed charter rates and concern for the future, enhanced by shrinking financing sources, have caused a dramatic reduction of vessels' values. By way of example, a 5yearold panamax bulker, valued at US$ 90M in 2007 could achieve no more than US$ 26M at the end of 2008 and US$ 35M by end2009 (the trend was further up in 1Q10). The market pattern in 2009 required impairment tests for the Company's fleet, resulting into a cumulative charge of Euro 22.3M for 5 ships (see Notes to Financial Statements). The global economy, particularly in China, other parts of Asia and Brazil, still provides reasons for uncertainty: these countries, relatively unaffected by a serious credit crunch, have enjoyed good health, often recording significant industrial production growth (e.g. China with a steel production of 566M tons in 2009, up 14% yoy, with a corresponding increase, +10M tons/month, of iron ore imports in 2H09). Rather than tonnage demand, it is tonnage supply that is regarded as a major source of concern, due to a huge orderbook and a massive building capacity in Asia, supported by Governments eager to ensure social stability. 37

39 On the other hand, the shipbuilding industry suffered too in 2009, faced with a dearth of newbuilding orders and pressure from several customers demanding order cancellations, discounts on price or, at least, postponement of their ships' delivery. Shipbuilders are obviously looking at possible solutions, such as cancelling orders, shelving expansion plans, switching from shipbuilding to repairing, diversifying production (e.g. infrastructure assembly) and scaling down utilization of subcontractors. Although this is obviously encouraging, the shipbuilding industry is still plagued by overcapacity and is widely thought to remain so, at least for the next few years, in view of a comparatively low demand for new tonnage. It is encouraging to note that cost of finance remains low, financiers have adopted a supportive approach towards their customers and bankers have cautiously resumed lending, although the gap between ships' contract value and market value has been left for owners to cure. The year 2009 is widely regarded as a trough in the market curve and a slow, still vulnerable, upward trend for the medium and long term may be on its way, in the wake of a growing global economy underpinned by developing countries, mainly in Asia. Tanker sector In 2009 the tanker fleet grew by 7.60% (29.40 mln dwt) over 2008, thus exceeding 435 million deadweight tons (in 2008 the tanker fleet grew by 5.60%). This strong growth confirms recent years' trend, from 296 mln dwt in year 2000 to more than 435 mln dwt in In 2009 tanker freight rates fell on average by 66% when compared with the previous year data. The first quarter 2010, on the contrary, saw recoveries between 16% and 56%, based on vessel's size. As far as the future is concerned, the shipyards' orderbook is the most important data to analyze. At the end of 2009 the tanker orderbook totalled mln dwt, or 29.50% of the current trading fleet. This is significantly lower than the mln dwt (or 39.80% of the then trading fleet) at the end of 2008: new vessels should be delivered in the 2010/2012 period, but it's a common feeling that part of the orderbook will not be built for different reasons, and that a more significant part won't match their contractual deliveries and will be delayed. This is almost certain as a concept, but it's difficult to weight the phenomenon, whose impact could be very significant, considering that in 2009 about 40% of the vessels with expected delivery during the year have been delayed to 2010 onward. 38

40 In 2009 ships' scrapping were more than doubled compared to the previous year's data: 8.40 M dwt (4.10 M dwt in 2008) at an average price of 340 $/ton(+20% over 2008). Taking into account current depressed freight rates, it is reasonable to assume that scrapping of old tonnage will significantly increase, also sustained by the phasing out rules, forcing to demolition (largely in 2010 and in any case within 2015) the residual single hull vessels (about 17% of the existing fleet). In 2009 the secondhand Sale & Purchase market was much lower than 2008 which, in turn, had recorded a significant reduction compared to Only 167 vessels have been sold, equivalent to M dwt worth US$ 4.20 Bln (in 2008: 302 ships for M dwt and US$ Bln). Further details on this sector are presented in the following tables. Table 1 shows demand for tanker tonnage and volumes of seaborne transportation of crude oil and refined products: in 2009, as a consequence of the slowing economy, the transported quantities were decreased between 3.2% and 4.1% (the deepest fall from 2000). (Table 1) Quantities transported by sea (millions of tons) year (est.) crude oil quantity change 1,656 1,684 1,667 1,770 1,850 1,885 1,933 1,984 1,964 1, % 1.0% 6.2% 4.5% 1.9% 2.5% 2.6% 1.0% 4.1% products quantity change % 0.5% 5.4% 8.5% 8.6% 6.5% 3.7% 2.4% 3.2% The tables below show the development of the tanker fleet in recent years, including new tonnage deliveries, scrapping and newbuilding orderbook. (Table 2) Tanker fleet Order book at end o f year (Mln dwt) as of end Total % of Fleet VLCC Suezmax Aframax Panamax Small Total + 200, /200,000 80/120,000 60/80,000 10/60,

41 (Table 3) Newbuilding deliveries/scrapping (Mln dwt) ) VLCC + 200,000 Suezmax 120/200,000 Aframax 80/120,000 Panamax 60/80,000 Small 10/60,000 Total difference between deliveries and scrapping (Table 4) Age profile of the tanker fleet as at March 1 st 2010 (Mln dwt) 09 yrs 1014 yrs 1519 yrs > 20 yrs total VLCC Suezmax Aframax Panamax Small Total + 200, /200,000 80/120,000 60/80,000 10/60, ,945 40,066 58,798 21,925 65, ,770 29,025 9,674 13,562 1,126 11,764 65,151 21,604 7,856 11,189 2,021 6,644 49,314 6,358 3,635 5,185 2,875 15,024 33, ,932 61,231 88,734 27,947 98, ,312 66% 15% 11% 8% 100% The world fleet's age is obviously a significant element for the assessment of its future development and tonnage supply growth. During the last few years, the average age has progressively decreased and it is evident that the renewal process will proceed according to the volume of new deliveries and to the entity of tonnage due for compulsory demolition in upcoming years and/or sent to voluntary demolition because of the decreasing market. Table 5 shows average freight rates (US$/day, timecharter equivalent) for spot voyages, related to different tonnage classes. (Table 5) Average freight rates for spot voyages year (1 st Qrt) $/g 15,718 12,486 9,872 18,467 24,950 13,940 22,032 27,707 29,954 24,174 24,516 23,325 7,700 10,000 clean chg 21% 21% 87% 35% 44% 58% 26% 8% 19% 1% 5% 67% 30% $/g 21,109 16,425 13,059 33,150 30,759 18,954 34,212 49,592 41,650 39,356 35,810 49,922 15,483 18,000 aframax chg 22% 21% 154% 7% 38% 81% 45% 16% 6% 9% 39% 69% 16% suezmax chg $/g 23,753 21,277 15,189 39,390 30,420 18,647 41,648 74,975 53,579 53,097 44,142 76,626 28,211 35,000 10% 29% 159% 23% 39% 123% 80% 29% 1% 17% 74% 63% 24% $/g 34,691 31,968 19,775 50,353 36,017 22,029 52,433 96,055 60,319 63,073 55,000 91,390 32,000 50,000 VLCC chg 8% 38% 155% 28% 39% 138% 83% 37% 5% 13% 66% 65% 56% clean: 20/35,000 dwt vessels used to transport clean petroleum products aframax: 80/110,000 dwt vessels. Suezmax: 110/160,000 dwt vessels. VLCC:modern construction 250/320,000 dwt vessels. 40

42 The above data show the averages for the year, significantly lower than in 2008 but extremely volatile: rates for suezmaxes went from 37,800 US$/day in the first quarter to 25,421 US$/day in the second quarter, to 14,524 US$/day in the third quarter and to 35,059 US$/day in the last quarter. In the first part of 2010 the rates surged for every category of vessels, with a declining trend at the end of the first quarter. After a yearly increase of 6.60% in both 2007 and 2008, in 2009 the bulker fleet grew at a rate of 9.90%, reaching the record level of 460 Mln ts dwt. Bulker sector Freight rates recorded an average 60% yearly decrease for all categories of vessel. The first quarter 2010 shows a further, light, reduction for capesizes and significant recoveries (between 40% and 60%) for all other types of vessel. Similarly to the tanker sector, the future is mainly affected by the orderbook level: at the end of 2009, the bulk carrier orderbook was Mln ts dwt or 62.30% of the current trading fleet (293.7 Mln ts dwt or 69.80% of the active fleet in 2008) for a total number of 3,267 vessels to be delivered (a reduction of 119 units compared to the end of 2008). It's reasonable to predict that based on the same reasons of the tanker sector a certain number of vessel will not be built by shipyards or will be significantly postponed, but it's very difficult to evaluate the real impact of this phenomenon in Scrapping activity strongly recovered from 5.50 Mln ts dwt of 2008 to Mln ts dwt of Scrap prices, obviously, surged from US$ 270 per displacement ton in 2008 to US$ 330 in Further increase in scrapping activity is expected in In 2009, secondhand sales transactions recorded a strong increase in volumes (+ 65%) as opposed to significant reduction in prices. Sales involved 594 units equivalent to Mln ts dwt and US$ 9.10 Bln in value (2008: 351 units for 20 Mln dwt ts and US$ Bln). Of these 594 vessels, 51 were capesize, 134 panamax, 160 handymax and 249 handy. Further details on dry bulk sectors are reported in the following tables. Table 1 shows the volumes of seaborne transportation of dry bulk commodities. After 8 years of continuous growth, 2009 marks a 3.0% reduction, clearly linked to the economic crisis. 41

43 (Table 1) Quantities transported by sea (millions of tons) year minerals coal grain other total changes (est.) ,009 1,061 1,103 1, ,043 2,096 2,170 2,302 2,493 2,627 2,801 2,959 3,065 2, % 3.5% 6.1% 8.3% 5.4% 6.6% 5.6% 3.6% 3.0% The tables below show the development of the bulker fleet in recent years, including newbuilding deliveries, scrapping and shipyards' orderbook. (Table 2) 2005 Trading fleet as at end of year (Mln dwt) Order book as of end 2009 Total % of fleet Capesize Panamax Handymax Handy Total 100/160,000 60/100,000 40/60,000 10/40, (Table 3) Newbuilding deliveries/scrapping (Mln dwt) Capesize 100/160,000 Panamax 60/100,000 Handymax 40/60,000 Handy 10/40,000 Total difference between deliveries and scrapping (Table 4) Age profile of the bulker fleet as at March 1st 2010 (Mln ts dwt) 09 yrs 1014 yrs 1519 yrs > 20 yrs total VLBC Capesize Panamax Handymax Handy + 160, /160,000 60/100,000 40/60,000 10/40,000 88,588 2,229 62,741 52,846 21, ,346 20,840 6,120 22,552 16,745 10,299 76,556 14,454 15,650 11,779 6,567 3,915 52,365 16,479 10,435 25,717 17,607 41, , ,361 34, ,789 93,765 77, ,809 49% 16% 11% 24% 100% 42

44 The world fleet's age profile is obviously a key element to estimate the fleet's future pattern and, therefore, tonnage supply growth. It is, however, noteworthy that, over the last few years, the fleet's average age has gradually decreased: it is, therefore, apparent that the renewal process will continue, as a result of scrapping activity and massive newbuilding deliveries. Table 5 shows the progress of bulk freight rates for spot voyages (US$/day time charter equivalent), for different tonnage classes (Clarkson index). (Table 5) Average freight rates for spot voyages year (1 st Qrt) $/g 24,724 15,524 11,654 37,563 70,395 51,613 43, ,757 97,699 39,064 35,000 capesize chg 37% 25% 222% 87% 27% 16% 159% 13% 60% 10% panamax $/g 10,700 8,709 7,284 19,091 33,950 22,931 21,427 49,349 43,323 15,090 24,000 chg 19% 16% 162% 78% 32% 7% 130% 12% 65% 59% handymax $/g 8,970 8,206 8,761 16,706 31,987 24,020 22,583 47,582 41,113 17,500 25,000 chg 9% 7% 91% 91% 25% 6% 111% 14% 57% 43% Freight rates for 2009 were, as an average, 60% lower than those (incredibly high) recorded in The data are correct, but they don't evidence the movement throughout the year and, in particular, don't show the recovery of the market in the last six months. To better clarify the situation, it's worth notice that panamax rates were worth about 7,600 US$/day in the first quarter, 15,400 US$/day in the second quarter, 16,559 US$/day in the third quarter and 20,700 US$/day in the last three months of the year. In the first quarter 2010 the rates remained, as an average, almost steady, showing some increases for handy and handymax. The existing and scheduled FPSO can be broadly divided in two groups: the first group is mainly characterized by high technology and a high level of investment, operating in deepwaters highpotential oilfields. The complexity of the equipment is also due to the growing exploitation of wells yielding ever increasing gas volumes together with crude oil. This involves working with gas processing facilities to enable transportation by gas carrier vessels; the second group of FPSO, technologically less complex, requires a lower level of capital investment and involves shallow to medium depth petroleum wells yielding a smaller percentage of gas in relation to the crude oil extracted. VLCC are the best suited vessels for conversion into FPSO for Brazilian and West African oilfields, whereas aframaxes are the most in demand for Far Eastern and Australian markets. FPSO sector 43