General Maritime Q1 2010 Results

General Maritime Corporation (NYSE:GMR) reported its financial results for the three months ended March 31, 2010.

Financial Review: 2010 First Quarter
The company recorded a net loss of $9.1 million or $0.16 basic and $0.16 diluted loss per share for the three months ended March 31, 2010 compared to net income of $18.9 million or $0.35 basic and $0.34 diluted earnings per share for the three months ended March 31, 2009. The decrease in net income was primarily due to a 21% decrease in our fleet TCE compared to the prior year period, as well as increased direct vessel operating expenses relating to the $1.1 million write-offs of certain insurance claims not deemed to be collectible for the three months ended March 31, 2010.

John Tavlarios, President of General Maritime Corporation, commented, "During a challenging time for the tanker industry, General Maritime continued to achieve a level of stability in its results based on the Company's sizeable time charter coverage. In order to continue to best serve shareholders, we also took decisive steps to further increase our contracted revenue streams during the first quarter. As we progress through 2010, we will concentrate on meeting three important objectives. First, in an effort to maximize cash flows, we will seek to maintain an appropriate balance of time charter coverage and spot exposure through the implementation of our flexible fleet deployment strategy. Second, we will continue to strive to achieve the highest operational standards for leading oil majors and shipping companies. Finally, we will continue to seek to generate strong results for shareholders by implementing our long-term growth strategy and opportunistically redeploying General Maritime's cash flow."

Net voyage revenue, which is gross voyage revenues minus voyage expenses unique to a specific voyage (including port, canal and fuel costs), decreased 21% to $65.9 million for the three months ended March 31, 2010 compared to $82.9 million for the three months ended March 31, 2009. This was primarily due to an increase in voyage expenses from $9.4 million for the three months ending March 31, 2009, to $31.7 million for the three months ending March 31, 2010. This increase in voyage expenses was due to higher bunker costs as well as an increase in percentage of spot market operating days for the first quarter 2010, compared to the prior year period. EBITDA for the three months ended March 31, 2010 was $32.1 million compared to $48.7 million for the three months ended March 31, 2009 (please see below for a reconciliation of EBITDA to net income). Net cash provided by operating activities was $20.0 million for the three months ended March 31, 2010 compared to $25.7 million for the prior year period. As of March 31, 2010, the Company's net debt (calculated as total long term debt less cash) was $952.8 million.

The average daily time charter equivalent, or TCE, rates obtained by the Company's fleet decreased by 21% to $24,321 per day for the three months ended March 31, 2010 compared to $30,724 for the prior year period. The Company's average daily rates for vessels on spot charters decreased by 2% to $25,911 for the three months ended March 31, 2010 compared to $26,445 for the prior year period.

Total vessel operating expenses, which are direct vessel operating expenses and general and administrative expenses, decreased by 2% to $34.0 million for the three months ended March 31, 2010 from $34.7 million for the three months ended March 31, 2009. Total vessel operating expenses is a measurement of the Company's total expenses associated with operating its vessels. Daily direct vessel operating expenses increased to $8,696 for the quarter ended March 31, 2010 compared to $8,238 for the prior year period primarily due to the write-offs of certain insurance claims not deemed to be collectible, which amounted to $1.1 million and related primarily to the Company's Aframax vessels. Daily direct vessel operating expenses associated with the Company's Aframax vessels increased 7.8% to $9,531 for the three months ended March 31, 2010 compared to $8,841 for the prior year period, due primarily to the write-offs mentioned above. Daily direct vessel operating expenses associated with the Company's Panamax and Handymax vessels increased for the three months ended March 31, 2010 compared to the prior year period primarily due to technical management contractual fee increases, as well as certain vessels ending their fixed rate technical management contracts with Northern Marine, which were assumed by the Company as part of the Arlington acquisition, and incurring higher costs thereafter. Daily direct vessel operating expenses on the VLCC and Suezmax vessels were flat from the prior year quarter.

General and administrative costs decreased by 17% to $9.7 million for the quarter ended March 31, 2010 compared to $11.7 million for the prior year period. This decrease was primarily due to a decrease in corporate expenses associated with a reduction in personnel and the termination of the Company's aircraft lease. Offsetting this decrease were $0.9 million in fees incurred during the first quarter of 2009 in connection with legal proceedings involving the Genmar Defiance.

General Maritime Corporation's fleet is comprised of 31 wholly owned tankers, consisting of 2 VLCC, 11 Suezmax, 12 Aframax 2 Panamax and 4 Products tankers, with a total carrying capacity of approximately 4 million deadweight tons, or dwt. The average age of the Company's fleet as of March 31, 2010 by dwt was 9.9 years compared to 8.9 years as of March 31, 2009.

As of March 31, 2010, the Company had 2 VLCC, 5 Suezmax, 3 Aframax, 2 Panamax and 4 Handymax tankers under time charter contracts. These vessels represented 52% of the 31 vessels in the Company's fleet.

On April 27, 2010 the Company's Board of Directors declared a Q1 2010 quarterly dividend of $0.125 per share payable on or about May 28, 2010 to shareholders of record as of May 14, 2010. Under the Company's dividend policy, the Company intends to declare quarterly dividends with a target amount of $0.125 per share. The declaration of dividends and their amount, if any, will depend upon the results of the Company and the determination of the Board of Directors.

Jeff Pribor, Chief Financial Officer of General Maritime Corporation, commented, "Our intense focus on preserving the Company's long-term financial strength and flexibility positions General Maritime to take advantage of growth opportunities. During a time when the Company continues to distribute dividends to shareholders, we intend to actively pursue additional acquisition opportunities. In accomplishing this critical long-term goal, we intend to further our successful track record of consolidating the industry and will not waiver from our demonstrated approach of pursuing acquisition opportunities that continue to meet strict return requirements."