second quarter 2015 results · 2018-03-14 · 8 results per segment¹ 2q15 1q15 usd mill chemical...

Second Quarter 2015 Results27 August 2015

2

Agenda

• Highlights

• Financials

• Operational review

• Project Felix

• Market update and prospects

• Q&A

3

Highlights

• Best quarterly operational performance since 3Q 2008, net result of USD 7 mill.

• Chemical Tankers EBITDA was USD 42 mill compared with USD 26 mill in first

quarter. EBITDA includes negative effects from bunker derivatives of USD 12 mill.

• Odfjell chemical freight index (ODFIX) result up 5% compared with the previous

quarter.

Highlights

0

50

100

150

200

10 11 12 13 14 15

Inde

x 19

90=1

00

ODFIX

¹ Proportional consolidation method according to actual historical ownership share

-50

0

50

100

150

200

250

300

350

06 07 08 09 10 11 12 13 14 15

USD

mill

Annualised EBITDA¹

Chemical tankers Tank terminals LPG/Ethylene

4

Highlights

• Impairment of USD 10 mill related to sale of vessels.

• The cost-cutting and efficiency programme is progressing as planned.

• Continued improved results from Odfjell Terminals, EBITDA of USD 18 mill first

half 2015 compared with negative USD 10 mill same period last year.

Highlights

5hallo

Income statement¹ - Second quarter 2015

Financials

¹ Proportional consolidation method

USD mill 2Q15 1Q15Gross revenue 279 260

Voyage expenses (104) (106)

TC expenses (45) (40)

Operating expenses (50) (53)

General and administrative expenses (27) (26)

Operating result before depr. (EBITDA) 53 35

Depreciation (31) (30)

Impairment (10) -

Operating result (EBIT) 12 5

Net finance (5) (37)

Taxes (0) (0)

Net result 7 (32)

6

Quarterly figures¹

0

50

100

150

200

250

300

350

2013 2014 2015

US

D m

ill

Gross Revenue

0

10

20

30

40

50

60

2013 2014 2015

USD

mill

EBITDA

EBITDA adjusted for one-off items:

4Q14: USD 28 million (USD 34 million unadjusted)



EBITDA adjusted for one-off items:




Financials


7

Quarterly figures

‐6‐15

58

‐15

1223

5

‐99

5

-120

-100

-80

-60

-40

-20

0

20

40

2013 2014 2015

US

D m

ill

Operating Result (EBIT)¹ • EBIT 2Q includes: Impairment of USD 10 million related to

sale of vessels. Negative effect of bunkers hedging of USD

12.1 million.• Unrealized value on derivatives USD 11.3 million

posted other financial items in 2Q, compared with negative USD 21.2 million in 1Q.

• EBIT 2Q includes: Impairment of USD 10 million related to

sale of vessels. Negative effect of bunkers hedging of USD

12.1 million.• Unrealized value on derivatives USD 11.3 million

posted other financial items in 2Q, compared with negative USD 21.2 million in 1Q.

‐9 ‐7 ‐7 ‐9 ‐9 ‐9 ‐9 ‐11 ‐10 ‐12

7

‐1

‐15‐6

1

‐5

0

‐10‐20

9

-30-25

-20-15-10-5

05

10

15

USD

mill

Net Finance²

Net interest Other financial/currency

2013 2014 2015

Financials

¹ Proportional consolidation method² Equity method

haallooooooooooooo

‐13‐22

‐32

‐2

‐26

79

‐9

‐102

‐17

-110

-90

-70

-50

-30

-10

10

30

2013 2014 2015

USD

mill

Net Result

8

Results per segment¹

2Q15 1Q15

USD millChemical tankers

Tank terminals

LPG/Ethylene

Chemical tankers

Tank terminals

LPG/Ethylene

Gross revenue 247 28 5 229 27 4EBITDA 42 10 1 26 9 1EBIT 10 2 1 4 1 1

0%10%20%30%40%50%60%70%80%90%

100%

Gross revenue EBITDA Assets

2Q15


Financials


-50

0

50

100

150

200

250

300

350

06 07 08 09 10 11 12 13 14 15

USD

mill

Annualised EBITDA¹


9

hhhhhhhhhhhhhh

Income statement¹ – 2Q15 chemical tankersUSD mill 2Q15 1Q15

Gross revenue 247 229

Voyage expenses (102) (104)

TC expenses (44) (38)


General and administrative expenses 2 (23) (22)



Impairment (10) -


Financials

• Stable, but slightly improved gross revenue.

• Bunker adjustment clauses impacted the gross revenue negatively by USD 7 million

(USD 10 million in 1Q).

• EBITDA includes negative effects from bunker hedging derivatives of USD 12.1 million


• G&A includes one -offs of USD 1.9 million.

• Stable, but slightly improved gross revenue.

• Bunker adjustment clauses impacted the gross revenue negatively by USD 7 million


• EBITDA includes negative effects from bunker hedging derivatives of USD 12.1 million


• G&A includes one -offs of USD 1.9 million. ¹ Proportional consolidation method 2 Including corporate functions

10

Vessel operating expenses – chemical tankers

0

2,000

4,000

6,000

8,000

10,000

12,000

06 07 08 09 10 11 12 13 14 YTD15

Development USD / day per year

Total Crew

Financials

0

2,000

4,000

6,000

8,000

10,000

12,000

1Q14 2Q14 3Q14 4Q14 1Q15 2Q15

Quarterly USD / day

Total Crew

• Project Felix initiatives give significant positive results.

• Operating expenses (USD / day) reduced by 16% YTD compared to FY2014

• Expect stabilizing opex at competitive levels.

• Project Felix initiatives give significant positive results.

• Operating expenses (USD / day) reduced by 16% YTD compared to FY2014

• Expect stabilizing opex at competitive levels.

11

Bunker development

65.9 66.4

52.3 39.9 38.9

(3.9) (3.2)

2.7 10.0 6.9

(0.7) (0.2)

16.6 14.7

12.1

61.3 63.071.6

64.557.9

(20)

(10)

-

10

20

30

40

50

60

70

80

2Q14 3Q14 4Q14 1Q15 2Q15

US

D m

illNet Bunker Cost

Bunker purchase Bunker clauses Bunker hedging Net bunker cost

0100200300400500600700800

10 11 12 13 14 15

USD

/mt

Platts 3.5% FOB Rotterdam

hallooooooooooooooooooo

• Net bunker cost in 2Q15 was USD 436 per tonne

before hedging vs. USD 475 last quarter.

• About 50% of the remaining 2015 exposure is

hedged at an average of USD 527 per tonne.

• No bunker hedging in place beyond 2015.

• Bunker clauses in CoAs cover about 50% of the

exposure.

• Net bunker cost in 2Q15 was USD 436 per tonne

before hedging vs. USD 475 last quarter.

• About 50% of the remaining 2015 exposure is

hedged at an average of USD 527 per tonne.

• No bunker hedging in place beyond 2015.

• Bunker clauses in CoAs cover about 50% of the

exposure.

Financials

12

Income statement¹ – 2Q15 tank terminals

USD mill 2Q15 1Q15

Gross revenue 28 27


General and administrative expenses (5) (4)




Financials


• The tank terminal segment continue the improvements and delivers a positive operating result.

• The occupancy rate improved to 92% versus 91% last quarter .

• The tank terminal segment continue the improvements and delivers a positive operating result.

• The occupancy rate improved to 92% versus 91% last quarter .

13

Tank terminals EBITDA – by geographical segment

‐3

10

8

3

-4

-2

0

2

4

6

8

10

12

Europe NorthAmerica

Asia Middle East

US

D m

illYTD 2015

EBITDA Tank Terminals by geographical segment 2Q15 1Q15

Europe (1) (2)North America 5 5Asia 4 4Middle East 2 2Total EBITDA 10 9

• Stable results in all areas.• Stable results in all areas.

Financials

14

Balance sheet¹ – 30.06.2015

USD mill - AssetsShips and newbuilding contracts 1 254

Other non-current assets/receivables 67

Investment in associates and JV’s 380

Total non-current assets 1 701

Available-for-sale investments and cash 108

Other current assets 133.

Total current assets 241

Assets held for sale 16

Total assets 1 958

Equity and liabilitiesTotal equity 636

Non-current liabilities and derivatives 43

Non-current interest bearing debt 876

Total non-current liabilities 919

Current portion of interest bearing debt 276

Other current liabilities and derivatives 127

Total current liabilities 403

Liabilities held for sale -

Total equity and liabilities 1 958

• Cash balance of USD 108 million - excluding JV’s cash.

• Net investment in tank terminals JV’s USD 317 million.

• Unrealised negative value on hedging derivatives with negative equity effect of USD 28.6 million end June, compared to USD 49.3 million end March.

• Equity ratio 32.5% (30.5% end March).

• Cash balance of USD 108 million - excluding JV’s cash.

• Net investment in tank terminals JV’s USD 317 million.

• Unrealised negative value on hedging derivatives with negative equity effect of USD 28.6 million end June, compared to USD 49.3 million end March.

• Equity ratio 32.5% (30.5% end March).

Financials

¹ Equity method

15

Debt development – 30.06.2015

• About to secure firm commitments for all scheduled vessel refinancing in 2015

with expected completion shortly.

• Restructured financial leases for three vessels, giving new liquidity of

USD 15 million.

• In total the 2015 refinancing will secure USD 65 million in new liquidity.

• NOK 600 million bond matures in December 2015.

0

200

400

600

800

1,000

1,200

1,400

2Q15 2015 2016 2017 2018 2019

USD

mill

Debt Portfolio

Ending balance Repayment

Financials

0

50

100

150

200

250

300

350

2015 2016 2017 2018 2019

US

D m

ill

Debt Repayments

Secured loans Balloon LeasingNOK bond 12/15 NOK bond 12/17 NOK Bond 12/18

16

Capital expenditure programme

In USD mill – per 30.06.2015 Remaining 2015 2016 2017 2018 2019

Chemical Tankers, Odfjell share

Docking 10 18 17 17 17

Other investments (vessel retrofitting) 5 7 5

Odfjell Gas, 100%1)

Sinopacific, 4 x 17,000 cbm 18 131

Sinopacific, 4 x 22,000 cbm 5 30 144

Tank Terminals, 100%

Planned capex 45 58 34 10 8

Financials

1) Odfjell SE (50% owner) is committed to inject up to USD 50 million in equity in 2015 - 2017. Due to delays at the yard the capital injections will most likely be pushed to later.

17

Terminal projects and expansionsOperational review

halloooooooooo

• In Houston, the new 17,150 cbm tank pit (Bay 10) is under construction with an

expected completion date in the fourth quarter 2015 .

• Our terminal in Tianjin, located in a new industrial development area, was not directly

affected by the explosion in the Tianjin old harbour earlier this month.

• The event will most likely delay action on permits and we now expect that the

operations will commence in October..

18

Tank terminal capacity

0

200

400

600

800

1,000

1,200

1,400

1,600

1,800

Cubic Metres`00

0

Mineral oil storage Chemical storage Ongoing expansions

Current capacity 5,431,790

Ongoing expansions 467,542

Current capacity 5,431,790

Ongoing expansions 467,542

Total capacity in CBM (incl. related parties):

Operational review

* Odfjell’s ownership share in the respective tank terminals is shown in percentage

19

Odfjell Terminals (Rotterdam) – current status

Operational review

• EBITDA negative USD 1.6 million in

2Q15 (Odfjell share), compared to

negative USD 2 million last quarter.

• Distillation (PID) business and re-

organization strategy implemented last

year has improved the results further. ‐80,000

‐60,000

‐40,000

‐20,000

0

20,000

40,000

60,000

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Annualised EBITDA OTR (100%)EUR 1,000

• Per end of 2Q15 the commercially available occupancy was at 93%, last quarter it

was at 87%.

• The distillation columns are fully operational.

• Total commercial capacity end June 860,000 cbm, compared to 820,000 cbm end

March.

• With the current market we expect to bring in additional capacity during second

half of 2015.

20

Odfjell Gas Carriers

Gross revenue up in 2Q15 from previous quarter.

Positive contribution from continued long-haul activity.

The construction of 4 x 17,000 cbm and 4 x 22,000 cbm is delayed.

We are in dicussions with the yard on new delivery dates.

Operational review

USD mill 2Q15 1Q15Gross revenue 5 4

EBITDA 1 1

EBIT 1 1

21

hhhhhhhh

Fleet development - last 12 months

Operational review

Fleet additions DWT Built Tanks Transaction

May 2015 Horin Trader 19 856 2015 Stainless Medium-term TC

April 2015 Marex Noa 12 478 2015 Stainless Long-term TC

March 2015 Gion Trader 19 883 2015 Stainless Medium-term TC

January 2015 Bow Triumph 49 600 2015 Coated Owned

October 2014 Bow Trident 46 600 2014 Coated Owned

August 2014 Kristin Knutsen 19 152 1998 Stainless Short-term TC

Short-term: Up to one yearMedium-term: 1-3 years

Fleet disposals, owned DWT Built Tanks Transaction

August 2015 Bow Bracaria 5 846 1997 Stainless Sale

July 2015 Bow Brasilia 5 800 1997 Stainless Sale

July 2015 Bow Balearia 5 846 1998 Stainless Sale

Odfjell has no further chemical tankers on order, but has medium term time-charter contracts for

newbuildings on order by third parties

Odfjell has no further chemical tankers on order, but has medium term time-charter contracts for

newbuildings on order by third parties

22

Project Felix: Reducing cost and improving efficiency

• End June, run-rate was at 67% which is in line with target.

• FTE reductions are on track for all improvement areas. 63% of redundant

employees (excluding early retirment) have new employment or confirmed future

plans.

• Cost reduction initiatives are on schedule. Target still to improve net result on a

yearly basis with USD 100 million when fully implemented.

• 3 vessels sold in 2Q as part of the programme, which includes exiting from

unprofitable trades.

• Focus for next two quarters will be on profitability improvement initiatives and

energy efficiency projects.

Project Felix

23

Felix initiative - retrofitting

Project Felix

Bow Clipper – 19.08.2015

• First vessel to have propeller, rudder and gear retrofitted/modified.

• Alfa propeller blades for best possible propulsive efficiency.

• Rudder bulb system to reduce energy loss caused by the turbulence behind the propeller.

• Mewis duct straightens and accelerates the hull wake into the propeller (a pre-Felix project).

• A greener profile to gain the lowest possible energy efficiency design index(EEDI).

• Efficiency testing to be concludedduring September.

24

hhhhhhh

67 % of Felix improvements are implementedIn line with plan

0

10

20

30

40

50

60

70

80

90

100

62%

38% 38%47%

53%

Jun.

67%

MayApr.

57%

Jan. Mar. Jul.

71%76%

Dec.Oct.

77%

84%

77%

Sep.

77%

Dec. 2016

Aug.

100%% of total

32%

58%

52%

Dec 2014

Feb.

41%

67%

Nov.

ActualPlanned

Total profit improvement potential (%, “run rate”, June 2015)

2015

Project Felix

25

Market update – chemical tankers

• Positive sentiment in the market in second quarter.

• A strong clean petroleum market (CPP market).

• No material disruption to the operation of our vessels in the period.

• Contracts renewed at roll-over terms.

Market update and prospects

0

50

100

150

200

10 11 12 13 14 15

Inde

x 19

90=1

00

ODFIX

26

hhhhhhhhhhhhh

Core Chemical Deep-sea Fleet 2004-2018Orderbook and estimated demolition per 13 August, 2015

* Outphasing 30 years (Europe built) and 25 years (Asian built)Source: Odfjell FLEETBASE


Average annual net growth:2004-2014: 7.2%2015-2018: 6.6%

27

Prospects

• US household consumption is expected to support economic growth in the

second half of the year.

• The pace of the Euro area’s recovery remains moderate and gradual.

• Continued uncertainty about China.

• Increasing benefits from lower bunker price.

• We expect third quarter to be similar to second quarter for the Chemical Tankers

segment.

• We expect stable to increased earnings at the Odfjell Terminals due to capacity

expansions and continued positive development at Odfjell Terminals

(Rotterdam).


28

Executive Management - priorities during 2nd half 2015

• Key focus is to build strength.

• Familiarization with the global Odfjell organization and other key stakeholders.

• Keep momentum in project Felix – also beyond initial targets.

• Bond refinance.

• Review operational and financial strategies in all segments.


29

Company representatives

Terje Iversen – CFO, Odfjell SE

Email: [email protected]

Phone: +47 932 40 359

IR – contact:

Tom A. Haugen – VP Finance, Odfjell SE


Phone: +47 905 96 944

Kristian V. Mørch – CEO, Odfjell SE


Phone: +47 55 27 00 00

Thank you

For more information please visit our webpage at www.odfjell.com

second quarter 2015 results · 2018-03-14 · 8 results per segment¹ 2q15 1q15 usd mill chemical...

Documents