Davie Yards Inc. releases its second quarter results for 2009

    LEVIS, QC, Aug. 14 /CNW/ - Davie Yards Inc. ("Davie" or the
"Corporation") (TSX: DAV) today released its financial and operating results
for the six-month period ended June 30, 2009. Davie has been focused in the
second quarter on resuming operations at the shipyard following the temporary
shut-down period and on negotiating the major remaining part of the financial
restructuring of the Corporation.

    Financial Highlights:

    Revenue for the six-month period ended June 30, 2009 was US$44.5 million
and net loss was US$9.5 million compared to revenue of US$22.7 million and net
loss of US$54.8 million in the corresponding period of 2008. This difference
between the six-month period ended June 30, 2009 and the corresponding period
of 2008 results mainly from a decrease in the Corporation's negative margin,
general and administrative expenses and derivative instruments fair value
adjustment. The loss was mainly caused by the shutdown of the Corporation's
operations during the first quarter, delays in the ramp-up of yard operations
in the second quarter, a foreign currency loss and delays relating to one of
the Corporation's clients obtaining financing from Export Development Canada.

    Future Outlook:

    "Commercial shipbuilding markets continue to be affected by the ongoing
financial crisis, but the long-term outlook for complex offshore construction
vessels remains promising. We have 1,250 employees, and relations with the
unions are good. We have reached new agreements with major suppliers for the
Cecon vessels and we are now negotiating supplies for the Ocean Hotels
vessels. Price increases for the vessels were accepted by our clients, and a
private placement has been successfully concluded. Support by the Government
of Québec and Investissement Québec as well as the Government of Canada and
Export Development Canada have been given through various loan agreements.
Good relations, confidence and support from major stakeholders are necessary
to achieve future success" stated Mr. Steinar Kulen, Davie's Chief Executive

    Going Concern:

    The Corporation's cash and cash equivalents and committed sources of cash
may not be presently sufficient to fund expected cash requirements throughout
the next 12 months. The ability of the Corporation to continue as a going
concern is dependent upon raising additional financing and completing its
financial restructuring plan, which includes one of the Corporation's clients
obtaining financing from Export Development Canada to meet its contractual
obligations towards the Corporation and pay the instalments due under its
construction contracts. The Corporation began working on its financial
restructuring plan during second half of 2008. As part of this plan, the
Corporation reached agreements with its clients for price increases of US$95
million on their existing contracts and raised US$20 million of equity through
a private placement. In July 2009, it further entered into an interim loan
agreement of US$40 million with Export Development Canada and loan agreements
in an aggregate amount of CDN$53.5 million with Investissement Québec.
Completion of the financial restructuring also requires the funding of a $100
million loan facility to Ocean Hotels plc., which is currently being
negotiated with Export Development Canada. The outcome of these matters is
dependent on a number of items outside the Corporation's control. As a result,
there is uncertainty as to whether the Corporation will have the ability to
continue as a going concern.

    About Davie Yards Inc.

    Davie Yards Inc. owns and operates the Davie yard in Quebec. With over
180 years of operating experience and approximately 1,250 employees, the
shipyard is the largest in Canada and among the largest and most sophisticated
in North America. The Corporation has a focus on building large and complex
offshore service vessels and rigs, and other sophisticated vessels for
commercial and governmental use. Its shares are traded on the Toronto Stock
Exchange (DAV). News and information are available at www.davie.ca.

    Forward-Looking Statements

    This news release contains forward-looking information within the meaning
of applicable Canadian securities legislation. These statements include those
relating to statements that are not historical facts, and reflect the current
intentions, plans, expectations and beliefs of Davie's management
("Management"). Such forward-looking statements reflect Management's current
beliefs and are based on information currently available to Management.
Forward-looking statements involve known and unknown risks, uncertainties and
other factors outside Management's control. A number of factors could cause
actual results of Davie to differ materially from the results predicted in the
forward-looking statements, including, but not limited to, risks associated
with the Corporation's fiscal results, completion of its financial
restructuring plan, working capital, foreign exchange and interest rate risk
management, late delivery of vessels, fixed-price contracts, refund
guarantees, high fixed costs, the employment guarantee, the satisfaction of
the conditions under the Investissement Québec settlement and other factors
referenced in Davie's continuous disclosure filings.
    Although the forward-looking statements contained herein are based upon
what Management believes to be reasonable assumptions, Management cannot
assure investors that actual results will be consistent with these
forward-looking statements. Certain assumptions underlying the forward-looking
statements contained in this news release include Management's assumptions
regarding market outlook for the construction of complex offshore vessels as
well as the assumptions that new vessels will be delivered on schedule and
that the Corporation will attract and retain key personnel in key positions.
These forward-looking statements are made as of the date of this release, and
Management assumes no obligation to update or revise them to reflect new
events or circumstances, except as required pursuant to applicable securities
laws. Readers are cautioned not to place undue reliance on these
forward-looking statements. For additional information with respect to certain
of these and other assumptions and risks, please refer to the Corporation's
Management's Discussion and Analysis for quarter ended June 30, 2009 and the
year ended December 31, 2008 as well as the Financial Statements for the
quarter ended June 30, 2009 and the year ended December 31, 2008, and the
Corporation's Annual Information Form dated March 29, 2009.

For further information:

For further information: Davie Yards Inc., Steinar Kulen, CEO, (418)
837-5841 Ext. 2101, + 47 901 05 698, steinar.kulen@davie.no

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