ECONOMY

In Brief

DryShips shares rally on strong quarterly earnings DryShips Inc’s shares rose 12 percent yesterday to their highest in six months, a day after the Greek dry-cargo shipping and drilling company posted strong quarterly results and indicated a turnaround in its rig business. The Athens-based firm on Wednesday posted its best profit in six quarters, and said the market has seen the bottom of rates for ultra-deepwater rigs. DryShips said in a presentation its recent contract deals have taken its total order backlog to over $900 million, and that may rise, as the company aims for additional contracts before the year’s end. Pankaj Khanna, the company’s chief operating officer, said in a telephone call that DryShips has much interest in its rigs and was also in discussion with various banks for financing. The company is yet to get contracts for three of its new drill ships. DryShips recently filed with US regulators to offer up to $350 million in shares to raise funds to finish building two of those rigs. The company has now completed 65 percent of the offer, prompting Credit Suisse analyst Gregory Lewis to term it as one of the company’s «major catalysts.» DryShips, which expects to continue focusing on long-term contracts for its dry-bulk vessels, said in a presentation it will clock $411 million in revenues from its fixed contracts in 2011. It will get daily rates of about $37,000 for the next year with 82 percent long-term contracts, down from the 99 percent it has for 2010. DryShips’ shares, which have risen about 18 percent over the last three months, were up 10 percent at $5.71. They earlier hit a high of $5.79 in morning trade on Nasdaq. (Reuters) OTE sees conditions deteriorating next year The Hellenic Telecommunications Organization (OTE) SA, the Greek unit of Deutsche Telekom AG, predicts the local economy will deteriorate next year due to the government’s austerity measures. «It’s good that we have a government that is determined to follow through with the necessary actions to get Greece out of the crisis,» Michael Tsamaz, the company’s new chief executive officer, said at a Morgan Stanley conference in Barcelona. «But the measures will have an impact and the market situation will probably get worse next year.» Prime Minister George Papandreou has cut wages and pensions for civil servants as part of his deficit-cutting drive to meet terms for 110 billion euros ($149 billion) in emergency loans from the European Union and International Monetary Fund. Reforms include restrictions on early retirement programs which burden state-run pension funds such as the program OTE ran in 2005 when it cut a third of its work force in Greece. Tsamaz, who became CEO on November 3, said he doesn’t expect any additional taxes for the company, «based on what I know today.» Kevin Copp, OTE’s chief finance officer, expects the company’s cash flow to be «stable» in the fourth quarter and potentially next year, depending on the government’s measures, he said at the conference. It’s «right» to cut debt, «but we also need actions to jump-start the economy,» he said. (Bloomberg) Shipyard bids Croatia has received three bids to buy a nearly 300-year-old shipyard, the last of five state-owned docks it is trying to sell to meet a major condition for completing its European Union entry talks next year. Restructuring the heavily subsidized docks so that they no longer require state aid is an important requirement for Zagreb to complete its talks to enter the EU. The small Kraljevica dock, located in the northern Adriatic, was put up for sale for a token price of 1 kuna ($0.184). Croatia’s oldest dock, founded in 1729, it was the only one that had failed to attract bids in two previous tender rounds. Two bids came from Croatia and one from neighboring Serbia, Vedran Duvnjak, head of the state privatization fund, told reporters yesterday. He did not say how long the government might take to review the bids. The dock is one of five of Croatia’s six state-owned shipyards that have been piling up losses for years. The sixth is profitable and is not on the block. Next year the government, which is struggling to control public expenditures, may have to take over up to 12 billion kuna in loans to the docks, which it guaranteed in the past. (Reuters)