REPEAT:Ermis Maritime Outlk Rev To Stable from Pos.LONDON--(BUSINESS WIRE)--Standard & Poor's CreditWire 9/25/98-- (In the press release sent earlier today on Ermis Maritime Holding Ltd. the headline was omitted from the release. The press release and headline follow.) Ermis Maritime Outlook Revised To Stable from Positive By S&P Standard & Poor's today affirmed af·firm v. af·firmed, af·firm·ing, af·firms v.tr. 1. To declare positively or firmly; maintain to be true. 2. To support or uphold the validity of; confirm. v.intr. its single-'B'-minus corporate credit and senior secured debt ratings on Ermis Maritime Holding Ltd. At the same time Standard & Poor's revised the outlook to stable from positive. The outlook change reflects worsening wors·en tr. & intr.v. wors·ened, wors·en·ing, wors·ens To make or become worse. Noun 1. worsening - process of changing to an inferior state decline in quality, deterioration, declension conditions in the crude oil tanker market, with little hope for improvement in the short term. Ermis' ratings reflect the higher-than-average risk profile of the oil tanker industry and Ermis' highly leveraged financial profile, but benefits from Ermis' links with major oil companies. Generally, the crude oil tanker market has some highly unfavorable characteristics, with high capital intensity, strong cyclicality, and high fragmentation (1) Storing data in non-contiguous areas on disk. As files are updated, new data are stored in available free space, which may not be contiguous. Fragmented files cause extra head movement, slowing disk accesses. A defragger program is used to rewrite and reorder all the files. . As a result, a modest imbalance imbalance /im·bal·ance/ (im-bal´ans) 1. lack of balance, such as between two opposing muscles or between electrolytes in the body. 2. dysequilibrium (2). between supply and demand tends to have a great effect on freight rates Noun 1. freight rate - the charge for transporting something by common carrier; "we pay the freight"; "the freight rate is usually cheaper" freightage, freight . Although the market has improved over the past few years, historical freight rates have rarely been consistently maintained at profitable levels, even for older vessels with lower-than-average total costs. There is some cause for optimism as global oil consumption and the scrapping of vessels are expected to increase going forward. However, the main category of ship used by Ermis -- Aframax vessels (80,000 dead weight tons [dwt] to 120,000dwt) -- may suffer from oversupply o·ver·sup·ply n. pl. o·ver·sup·plies A supply in excess of what is appropriate or required. tr.v. o·ver·sup·plied, o·ver·sup·ply·ing, o·ver·sup·plies in the coming year, as a considerable number of new ships are on order (up to 20% of the worldwide existing fleet, which is already the youngest fleet in the crude oil market). Ermis' main customers include major oil companies such as British Petroleum Co. PLC, Chevron Corp., Shell, Exxon, and Texaco. The top-ten such customers represent about two-thirds of Ermis' sales and the top-five represent above 40% of sales. This is a strong concentration with mainly short-term or spot contracts, and it emphasizes the potential volatility of Ermis' earnings, although this is somewhat mitigated mit·i·gate v. mit·i·gat·ed, mit·i·gat·ing, mit·i·gates v.tr. To moderate (a quality or condition) in force or intensity; alleviate. See Synonyms at relieve. v.intr. To become milder. by the group's links with the major oil companies and its focus on the Mediterranean area. Ermis will be highly leveraged, with net debt to capital (leverage) of 96% at June 30, 1998. Leverage is expected to run at above 85% for the next two years. During the same period, earnings before interest, taxes, depreciation, and amortization Earnings before interest, taxes, depreciation, and amortization (EBITDA) A financial measure defined as revenues less cost of goods sold and selling, general, and administrative expenses. is expected to cover interest just 2 times (x), however, currently this coverage is much weaker. Ermis is expected to dedicate ded·i·cate tr.v. ded·i·cat·ed, ded·i·cat·ing, ded·i·cates 1. To set apart for a deity or for religious purposes; consecrate. 2. all cash flows to reduce its considerable debt. OUTLOOK: STABLE The outlook reflects the expectation that Ermis will reduce leverage in the next two to three years, Standard & Poor's said. ---CreditWire |
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