<PAGE>
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 AUGUST 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|
<PAGE>
INFORMATION CONTAINED IN THIS FORM 6-K REPORT
Enclosed is the earnings report of Cenargo International Plc for its fiscal
quarter ended June 30, 2000.
<PAGE>
CENARGO INTERNATIONAL PLC
QUARTERLY REPORT
JUNE 30, 2000
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
GENERAL
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 JUNE 30, 2000 COMPARED TO THREE MONTHS ENDED JUNE 30, 1999.
OPERATING REVENUES
Operating Revenues increased in the third quarter ended June 30, 2000 (the `2000
quarter') by $12.3 million to $39.8 million compared to $27.5 million in the
third quarter ended June 30, 1999 (the `1999 quarter'). This increase comprises
a $1.4 million decrease in charter hire revenues, a $14.0 million increase in
ferry service revenues and a $0.3 million decrease 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, the inclusion of revenues from Norse Irish
Ferries Limited (`NIF') acquired on October 1, 1999 and $2.0 million receivable
as partial settlement of the Company's 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 Company's deep-sea vessels.
OPERATING EXPENSES
Vessel and other operating costs increased in the 2000 quarter by $8.3 million
to $30.9 million compared to $22.6 million in the 1999 quarter, primarily as a
result of the inclusion of NIF results and NORTHERN MERCHANT operating costs in
the 2000 quarter offset by decreased deep sea operating costs as a result of the
vessels sold.
Depreciation was $2.5 million for both the 1999 and 2000 quarters, 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 of depreciation on deep-sea vessels sold.
Amortisation of dry docking and special survey costs for the 2000 quarter
decreased by $0.4 million to $0.4 million compared to $0.8 million in the 1999
quarter. Goodwill amortisation increased in the 2000 quarter by $0.4 million to
$0.5 million as a result of amortisation of goodwill on the acquisition of NIF.
General administrative expenses for the 2000 quarter increased by $0.2 million
to $3.0 million compared to $2.8 million in the 1999 quarter primarily due to
the inclusion of NIF costs in the 2000 quarter.
The foreign exchange gain for the 2000 quarter was $0.8 million compared to a
loss of $0.5 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 $7.2 million to $36.4 million for the 2000 quarter compared to $29.2 million
for the 1999 quarter.
NET OPERATING INCOME
As a result of the foregoing factors net operating income increased by $5.1
million to $3.4 million for the 2000 quarter compared to a loss of $1.7 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 $4.6 million in the 2000 quarter compared to $4.9 million
in the 1999 quarter
NET LOSS
As a result of the foregoing net loss decreased by $3.0 million to $0.8 million
for the 2000 quarter compared to $3.8 million for the 1999
<PAGE>
quarter. EBITDA generated was $6.6 million for the 2000 quarter compared to $1.6
million for the 1999 quarter.
NINE MONTHS ENDED JUNE 30, 2000 COMPARED TO NINE MONTHS ENDED JUNE 30, 1999.
OPERATING REVENUES
Operating revenues increased in the nine months ended June 30, 2000 (the `2000
period') by $40.7 million to $120.6 million compared to $79.9 million in the
nine months ended June 30, 1999 (the `1999 period'). Increase comprises a $7.0
million decrease in charter hire revenues, a $47.1 million increase in ferry
service revenues and a $0.6 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, 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 $8.5 million receivable as
partial settlement of the Company's court case against the Spanish Government.
The 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 $28.5 million
to $89.6 million compared to $61.1 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 $7.8 million compared to $6.5
million in the 1999 period, which represents depreciation on the Brave Merchant
delivered 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 decreased by $0.1
million to $1.3 million compared to $1.4 million in the 1999 period. Goodwill
amortisation increased in the 2000 period by $1.3 million to $1.4 million as a
result of amortisation of goodwill on the acquisition of NIF.
General administrative expenses for the 2000 period increased by $1.2 million to
$10.7 million compared to $9.5 million in the 1999 period primarily due to the
inclusion of Freightwatch and NIF costs in the 2000 period.
Foreign exchange gain for the 2000 period has increased by $1.7 million to $0.7
million compared to a loss of $1.0 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 $30.6 million to $110.1 million for the 2000 period compared to
$79.5 million for the 1999 period.
NET OPERATING INCOME
As a result of the foregoing factors, net operating income increased by $10.2
million to $10.5 million for the 2000 period compared to $0.3 million for the
1999 period.
OTHER INCOME/EXPENSES
Interest income decreased by $2.5 million to $0.6 million for the 2000 period
compared to $3.1 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 decreased by $0.2 million to $14.6 million for the 2000 period
compared to $14.8 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 $3.1 million to a net loss of
$3.0 million for the 2000 period compared to $6.1 million for the 1999 period.
EBITDA generated was $21.1
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million for the 2000 period compared to $10.3 million for the 1999 period.
LIQUIDITY AND CAPITAL RESOURCES
Total shareholders equity at June 30, 2000 was $37.9 million compared to $47.0
million at June 30, 1999. The decrease of $9.1 million is represented by a net
loss for the twelve months of $5.1 million and a cumulative translation
adjustment of $4.0 million. This arises mainly as a result of converting the
group's accounts into US dollars.
Long term debt at June 30, 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 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 June 30, 2000 the Company had cash and cash equivalents of $11.0 million
compared with $74.5 million at June 30, 1999. Cash and cash equivalents
decreased by $63.5 million primarily as a result of the acquisition of NIF,
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 June 30, 2000 of US$7.7 million. Free cash is forecast to be a minimum of $20
million by 30 September 2000.
TAXATION
The UK Treasury published the Finance Bill in April 2000, including the proposed
UK tonnage tax regime. The bill became law in early August 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.
Subject to a review of the final legislation Cenargo may 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
($11.3 million at June 30, 2000) will be extinguished over a seven year period
at approximately 15% per annum.
SEGMENT ANALYSIS
IRISH SEA
The quarter's results were reasonably strong although adversely affected by the
extra vessel introduced by P & O on the Liverpool - Dublin route and the
Northern corridor. Monthly ETU's (Equivalent Trailer Units) carried during the
quarter were as follows:
<TABLE>
<CAPTION>
Belfast Dublin Dublin Belfast
Heysham Heysham Liverpool Liverpool
------- ------- --------- ---------
<S> <C> <C> <C> <C>
April 9,941 3,882 7,430 9,781
May 11,209 4,195 8,208 10,542
March 11,188 4,970 8,513 10,702
</TABLE>
Despite the increase competition rates have remained reasonably stable partly as
a result of improved mix. However results continue to be adversely affected by
the weakness of the Euro compared to the US$ and Sterling. The reduction in
revenues in the quarter attributable to this weakness is approximately $0.5
million.
Fuel costs have also remained much higher than budgeted. The extra cost in the
quarter compounded by the strength of the US dollar is estimated as $0.6
million.
The new berth in Dublin became operational on 12th June 2000. Both the Group's
Dublin services can now berth at 06:00 hrs each morning. This significantly
enhances the attraction to customers of the Heysham - Dublin service.
Significant improvement in volumes has already been seen on the service.
Negotiations continue in relation to the restructuring of the two chartered in
vessels used on the Liverpool-Belfast service. These should be concluded by 30
September 2000 and will lead to substantial cost savings of approximately $6.5 -
$7.0 million per annum.
LOGISTICS
The Group has continued to attract new business particularly for its
Eaglescliffe site. A major 5 year contract relating to the storage,
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pick and pack and distribution of Virgin Cosmetics was concluded in Q3 and will
significantly contribute to results.
FERRIMAROC
The Group was informed by the Moroccan government in June 2000 that it would not
be allowed to operate two vessels during the summer season. The Mistral has
therefore operated in competition with the pool of three operators (two of which
are Moroccan shipping lines). The vessel has performed well carrying over 36% of
the available traffic.
The second vessel has been time chartered to a Moroccan shipping company. One of
the latter's vessels was badly damaged in a collision in June 2000.
Although the results of Ferrimaroc will not be as strong this year as last year
mainly as a result of only being able to operate one vessel in the service
during the summer, the group should achieve a positive EBITDA for the year.
Discussions are in train in relation to joining the pool from October 2000.
NEW VESSELS
The delivery of the fourth new Ropax has been
delayed due to a fault in the fire prevention sprinkler system. The vessel is
now expected to deliver mid September 2000 and immediately go on time charter to
Maersk on its Dover - Dunkirk route. The group receives penalties of
(pound)9,900 for the period of the delay.
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 our Year 2000 program is to minimise the chance of
disruption to the services we provide to our customers up to, during and after
the turn of the millennium. For the Company systems, equipment and services
obtained from third parties we have 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 our program helped the Company to confirm that we 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 at least
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 1, 1999 and January 1, 2002.
During the transition period, non-cash payments can be made in the Euro and
parties can 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 management's 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
4
<PAGE>
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 company's
Mediterranean service.
5
<PAGE>
UNAUDITED CONSOLIDATED STATEMENTS OF INCOME
THREE MONTHS ENDED JUNE 30, 2000, 1999
(EXPRESSED IN US $000)
<TABLE>
<CAPTION>
2000 1999
<S> <C> <C>
OPERATING REVENUES
Charterhire income -- 1,455
Ferry service income (3b) 34,777 20,768
Logistics and other income 5,027 5,320
Brokers' commission -- (57)
-------------------------
39,804 27,486
-------------------------
OPERATING EXPENSES
Vessel and other operating costs 30,909 22,566
Depreciation 2,470 2,489
Amortisation of drydocking 358 768
Goodwill amortisation 450 72
General and administrative exps 3,034 2,822
Foreign exchange (gain) loss (774) 457
-------------------------
36,447 29,174
-------------------------
OPERATING INCOME 3,357 (1,688)
OTHER INCOME (EXPENSE)
Interest income 217 902
Interest expense (4,624) (4,959)
Gain (loss) on disposal of assets 1 (50)
-------------------------
(4,406) (4,107)
-------------------------
LOSS BEFORE INCOME TAXES (1,049) (5,795)
Income taxes 264 2,044
Minority Interests (23) (22)
-------------------------
NET LOSS (808) (3,773)
-------------------------
ADDITIONAL FINANCIAL INFORMATION
EBITDA (note 4) 6,636 1,591
EBITDA to interest expense, net 1.5x 0.4x
</TABLE>
SEE ACCOMPANYING NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
6
<PAGE>
UNAUDITED CONSOLIDATED STATEMENTS OF INCOME
NINE MONTHS ENDED JUNE 30, 2000, 1999
(EXPRESSED IN US $000)
<TABLE>
<CAPTION>
2000 1999
<S> <C> <C>
OPERATING REVENUES
Charterhire income -- 7,351
Ferry service income (3b) 104,126 56,929
Logistics and other income 16,454 15,907
Brokers' commission -- (302)
---------------------
120,580 79,885
---------------------
OPERATING EXPENSES
Vessel and other operating costs 89,545 61,070
Depreciation 7,775 6,458
Amortisation of drydocking 1,350 1,419
Goodwill amortisation 1,357 125
General and administrative exps 10,698 9,514
Foreign exchange (gain)/loss (659) 956
---------------------
110,066 79,542
---------------------
OPERATING INCOME 10,514 343
OTHER INCOME (EXPENSE)
Interest income 644 3,078
Interest expense (14,522) (14,794)
Breakage costs on termination of capital leases (1,236) --
Gain on disposal of assets 89 1,942
---------------------
(15,025) (9,774)
---------------------
LOSS BEFORE INCOME TAXES (4,511) (9,431)
Income taxes 1,549 3,369
Minority Interests (75) (81)
---------------------
NET LOSS (3,037) (6,143)
---------------------
ADDITIONAL FINANCIAL INFORMATION
EBITDA (note 4) 21,085 10,287
EBITDA to interest expense, net (excluding capital lease breakage costs) 1.5x 0.9x
</TABLE>
SEE ACCOMPANYING NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
7
<PAGE>
UNAUDITED CONSOLIDATED BALANCE SHEETS
AS OF JUNE 30, 2000, 1999
(EXPRESSED IN US$000)
<TABLE>
<CAPTION>
2000 1999
<S> <C> <C>
ASSETS
CURRENT ASSETS
Cash and cash equivalents 7,658 19,538
Cash held in escrow and blocked deposits 3,305 54,947
Trade accounts receivable 29,261 25,279
Other receivables 2,003 1,722
Due from joint ventures - 389
Inventories 1,844 1,288
Prepaid expenses and accrued income 2,948 2,977
-----------------------
47,019 106,140
Land and buildings 18,207 13,603
Vessels and equipment 137,756 135,917
Vessels under construction 37,225 62,219
Loans to joint ventures 3,956 4,083
Other investments 531 553
Goodwill, net 30,399 2,064
Deferred charges, net 8,547 7,565
Pension fund debtor 5,160 4,848
-----------------------
Total assets 288,800 336,992
-----------------------
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Current maturities of long-term debt 1,396 1,645
Capital lease obligations 565 3,070
Trade accounts payable 10,130 10,728
Accrued expenses 7,855 7,144
Accrued interest - ship mortgage notes 710 710
Other creditors 2,642 2,281
-----------------------
23,298 25,578
-----------------------
LONG-TERM LIABILITIES
Long-term debt 38,805 65,730
Ship mortgage notes 172,823 172,550
Capital lease obligations 2,964 12,826
Other creditors 1,724 1,435
Deferred taxation 11,330 11,839
-----------------------
Total liabilities 250,944 289,958
-----------------------
SHAREHOLDERS' EQUITY
Share capital 21 21
Accumulated other comprehensive income:
cumulative translation adjustment (3,858) 224
Retained earnings 41,693 46,790
-----------------------
Total shareholders' equity 37,856 47,034
-----------------------
Total liabilities and shareholders' equity 288,800 336,992
-----------------------
</TABLE>
SEE ACCOMPANYING NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
8
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UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS
NINE MONTHS ENDED JUNE 30, 2000, 1999
(EXPRESSED IN US$000)
<TABLE>
<CAPTION>
2000 1999
<S> <C> <C>
OPERATING ACTIVITIES
NET INCOME (LOSS) (3,037) (6,143)
Amortisation of drydocking and deferred charges 1,350 959
Amortisation of ship mortgage notes discount 204 205
Depreciation 7,775 6,458
(Gain) loss on disposition of fixed assets (88) (1,942)
Foreign exchange adjustment (3,597) (623)
Goodwill amortisation 1,356 125
(Increase) decrease in pension debtor (158) (41)
(Increase) decrease in trade debtors 855 (8,032)
(Increase) decrease in other debtors 3,625 4,170
(Increase) decrease in stock (48) 514
(Increase) decrease in prepayments and accrued income (2,088) 925
Increase (decrease) in trade creditors 535 (427)
Increase (decrease) in other creditors (2,606) (10,025)
Increase (decrease) in accrued expenses (4,271) (4,195)
Increase (decrease) in deferred tax liability (1,170) (3,370)
-------------------
Net cash (used) in operating activities (1,363) (21,442)
-------------------
INVESTING ACTIVITIES
Additions to vessels and equipment (1,455) (2,744)
Additions to vessels under construction (20,180) (34,754)
Additions to land and buildings (5,850) --
Purchase of subsidiary companies, net of cash acquired (35,218) (1,029)
Proceeds from sale of capital assets 44,088 66,550
-------------------
(18,615) 28,023
-------------------
FINANCING ACTIVITIES
Proceeds from long-term debt 17,100 17,100
Repayment of long-term debt (43,548) (1,075)
Due to joint ventures 712 1,609
Repayments of capital leases (13,339) (3,096)
Proceeds from capital leases 408 1,305
Deferred charges paid 281 (878)
-------------------
(38,386) 14,965
-------------------
Net increase (decrease) in cash and cash equivalents (58,364) 21,546
Cash and cash equivalents at beginning of period 69,327 52,939
-------------------
CASH AND CASH EQUIVALENTS AT END OF PERIOD 10,963 74,485
-------------------
</TABLE>
SEE ACCOMPANYING NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
9
<PAGE>
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 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 nine
months ended June 30, 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 nine
months ended June 30, 2000 and 1999 are not necessarily indicative of
what operating results may be for the full year.
2. CHANGES IN SHAREHOLDER'S EQUITY
<TABLE>
<CAPTION>
Cumulative Ordinary
translation share Retained
adjustment capital earnings
---------- ------- --------
<S> <C> <C> <C>
Balance at September 30, 1998 $ 384 $ 21 $ 52,933
Net income (loss) (160) - (6,143)
------------- ----------- ------------
Balance at June 30, 1999 $ 224 $ 21 $ 46,790
Balance at September 30, 1999 $ 428 $ 21 $ 44,730
Net income (loss) (4,286) - (3,037)
------------- ----------- ------------
Balance at June 30, 2000 $ (3,858) $ 21 $ 41,693
</TABLE>
3. CONTINGENT LIABILITIES AND ASSETS
(a) The company insures the legal liability risks for its shipping
activities with the Steamship Mutual, UK Mutual 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 company's 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.
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NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 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 $10.0 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 $8.5 million
in the nine months ended June 30, 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.
<TABLE>
<CAPTION>
Irish Sea Logistics
Ferries Ferrimaroc and Other Corporate Total
------- ---------- --------- --------- -----
<S> <C> <C> <C> <C> <C>
Three Months to June 30, 2000
Revenue 32,893 1,885 5,026 - 39,804
EBITDA 6,835 (1,043) 518 326 6,636
Tangible fixed assets 156,644 16,045 9,236 11,263 193,188
Capital expenditure 1,449 - - - 1,449
Three months to June 30, 1999
Revenue 17,108 2,595 6,385 1,398 27,486
EBITDA 3,532 (1,298) (174) (469) 1,591
Tangible fixed assets 188,929 2,932 1,969 17,909 211,739
Capital expenditure 8,550 - - - 8,550
Nine months to June 30, 2000
Revenue 98,498 5,629 16,453 - 120,580
EBITDA 23,108 (2,125) 890 (788) 21,085
Capital expenditure 20,180 - 7,305 - 27,485
Nine months to June 30, 1999
Revenue 49,956 6,974 15,906 7,049 79,885
EBITDA 12,718 (3,385) (311) 1,265 10,287
Capital expenditure 36,054 - 1,444 - 37,498
</TABLE>
11
<PAGE>
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 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:
<TABLE>
<CAPTION>
Three months Ended June 30 Nine months Ended June 30
2000 1999 2000 1999
---- ---- ---- ----
<S> <C> <C> <C> <C>
EBITDA 6,636 1,591 21,085 10,287
Reconciling items:
Depreciation (2,470) (2,489) (7,775) (6,458)
Amortisation of goodwill (450) (72) (1,357) (125)
Amortisation of drydocking (358) (768) (1,350) (1,419)
Net interest expense (4,407) (4,057) (15,114) (11,716)
-------------------------------------------------------------------
Loss income before income taxes (1,049) (5,795) (4,511) (9,431)
-------------------------------------------------------------------
</TABLE>
12
<PAGE>
FLEET LIST AT JUNE 30, 2000
<TABLE>
<CAPTION>
YEAR
VESSEL NAME VESSEL TYPE CAPACITY BUILT FLAG
----------- ----------- -------- ----- ----
<S> <C> <C> <C> <C>
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/Car 2,386 passengers 1981 Bahamas
Ferry 700 cars
SCIROCCO C Passenger/Car 1,315 passengers 1974 Bahamas
Ferry 296 cars
30 trailer units
DAWN MERCHANT C RoPax 250 passengers 1998 British (Isle of Man)
136 trailer units
BRAVE MERCHANT C RoPax 250 passengers 1999 British (Isle of Man)
136 trailer units
NORTHERN MERCHANT* RoPax 250 passengers 2000 British
136 trailer units
HULL 290 RoPax 250 passengers delivered British
(TBN MIDNIGHT MERCHANT) 136 trailer units Aug 2000
LAGAN VIKING** RoPax 330 passengers 1997 Italian
180 trailer units
MERSEY VIKING** RoPax 330 passengers 1997 Italian
180 trailer units
</TABLE>
C Collateral vessel securing 9 3/4% Ship Mortgage Notes
* Operated under an operating lease.
** Operated under time charters expiring in September 2001 and January 2002
<PAGE>
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: August 30, 2000 By: /s/ Michael Hendry
-------------------------------
Michael Hendry
Chairman
