third quarter 2013 results · • new regulatory requirements and the submission of an application...
TRANSCRIPT
Third Quarter 2013 ResultsOslo – 14 November 2013
2
Agenda
• Highlights
• Financials
• Operational review
• Market update and prospects
• Summary
• Q&A session
3
Highlights
• EBITDA of USD 37 million
• Time-charter results down 4% compared
with last quarter
• OTR is working on a revised business
plan and may redevelop most of the
older areas of the terminal
• An impairment of certain OTR assets will
be evaluated
• New contracts for four LPG/Ethylene
gas carriers, options for 2 or 4 vessels
• Completed two transactions in the
Norwegian bond market, rising in total
NOK 500 million
0
50
100
150
200
250
300
350
04 05 06 07 08 09 10 11 12 13
US
D m
ill
Annual EBITDA – actual ownership
Chemical tankers Tank terminals
Highlights
0
50
100
150
200
03 04 05 06 07 08 09 10 11 12 13
Inde
x 19
90=1
00
ODFIX
4
Income statement - Third quarter 2013
USD mill 3Q13 2Q13
Gross revenue 296 294
Voyage expenses (127) (116)
TC expenses (37) (39)
Operating expenses (68) (69)
General and administrative expenses (28) (34)
Operating result before depr. (EBITDA) 37 36
Depreciation (33) (31)
Capital gain/loss on fixed assets 19 3
Operating result (EBIT) 23 8
Net finance (13) (10)
Taxes (0) (0)
Net result 9 (2)
Financials
5
Quarterly figures - from continued operationUSD mill
0
50
100
150
200
250
300
350
2011 2012 2013
US
D m
ill
Gross Revenue
05
1015202530354045
2011 2012 2013
USD
mill
EBITDA
• EBITDA growth in four consecutive quarters
Financials
6
Quarterly figures - from continued operationUSD mill
12 11
‐6
8
‐5
82
‐25
23
‐1
‐23-30
-20
-10
0
10
20
30
2011 2012 2013
US
D m
ill
Operating Result (EBIT)
11
‐4 ‐13
5
‐28‐2
261
‐39
9
‐8‐40
-100
-50
0
50
100
150
200
250
300
2011 2012 2013
US
D m
ill
Net Result
• Capital gain of USD 19 million following the
completion of the LG transaction this quarter
• USD 4.7 million received on cancellation of TC
contracts
• Net interest stable
• USD 3 million in non-recurring items in Rotterdam
‐9 ‐10 ‐10 ‐11 ‐12 ‐12 ‐13 ‐13 ‐12 ‐11 ‐12
2 2
‐2
50
‐9‐3
‐6
61
‐1
-25
-20
-15
-10
-5
0
5
10
US
D m
ill
Net Finance
Net interest Other financial/currency2011 2012 2013
Financials
7
Balance sheet – 30.09.2013
USD mill - AssetsShips and newbuilding contracts 1 301
Tank terminals and intangible assets 589
Other non-current assets/receivables 148
Total non-current assets 2 038
Available-for-sale investments and cash 213
Other current assets 199.
Total current assets 412
Total assets 2 451
Equity and liabilitiesTotal equity 829
Non-current liabilities and derivatives 135
Non-current interest bearing debt 1 128
Total non-current liabilities 1 262
Current portion of interest bearing debt 198
Other current liabilities and derivatives 162
Total current liabilities 360
Total equity and liabilities 2 451
• Cash balance of USD 213 million
• Available credit facilities USD 102 million
• 9.8% of own shares held as treasury shares
• Equity ratio 33.8%
Financials
8
Debt development
• Tap bond issues of NOK 500 million
• Secured long term refinancing of Odfjell Terminals (Rotterdam)
• Secured long-term sale/leaseback financing for two of the Korean newbuildings.
Financing of the two remaining vessels expected to be concluded shortly
• Evaluating refinancing of maturing vessel mortgage loans
0
200
400
600
800
1,000
1,200
1,400
2013 2014 2015 2016 2017
USD
mill
Debt Portfolio
Ending balance Repayment
0
50
100
150
200
250
300
350
4Q13 2014 2015 2016 2017
USD
mill
Planned Debt Repayments
Secured loans Balloon LeasingNOK bond 09/13 NOK bond 12/15 NOK bond 12/17
Financials
9
Successful tap issuance of NOK bonds
Financials
• Completed sale of NOK 500 million of unsecured bonds in the Norwegian bond
market
• Tap issue of NOK 400 million maturing in December 2015 (ODF05)
• Total nominal amount oustanding in ODF05 is NOK 600 million
• Sale of own bond holdings of NOK 100 million maturing in April 2017
(ODF04)
• Totalt nominal amount oustanding in ODF04 is NOK 600 million
10
Capital expenditure programme – Odfjell’s share
In USD mill Per 3Q13 2014 2015 2016 2017Hyundai Mipo, 4 x 46,000 DWT 4 55
Sinopacific, 4 x 17,000 cbm 18 18 81 63
Docking 7 27 27 27 27
Terminals1) 23 132 67 28 9
Total 52 232 175 118 361) Planned not commited
Management visiting Odfjell Nangang Terminal (Tianjin)
Financials
11
Income statement – 3Q13 chemical tankers and LPG/Ethylene
USD mill 3Q13 2Q13
Gross revenue 264 258
Voyage expenses (127) (116)
TC expenses (37) (39)
Operating expenses (47) (48)
General and administrative expenses (23) (26)
Operating result before depr. (EBITDA) 29 29
Depreciation (24) (23)
Capital gain/loss on fixed assets 0 (3)
Operating result (EBIT) 5 4
Financials
12
Income statement – 3Q13 tank terminals
USD mill 3Q13 2Q13
Gross revenue 33 36
Operating expenses (21) (21)
General and administrative expenses (6) (9)
Operating result before depr. (EBITDA) 7 7
Depreciation (9) (8)
Capital gain/(loss) 19 5
Operating result (EBIT) 17 3
Financials
13
Results per segment
3Q13 2Q13
USD mill Chemical tankers/LPG
Tank terminals
Chemical tankers/LPG
Tank terminals
Gross revenue 264 33 258 36EBITDA 29 7 29 7EBIT 5 17 4 3
0%10%20%30%40%50%60%70%80%90%
100%
Gross revenue EBITDA Assets
Chemical tankers Tank terminals
Financials
0
50
100
150
200
250
300
350
04 05 06 07 08 09 10 11 12 13
USD
mill
Annual EBITDA – actual ownership
Chemical tankers Tank terminals
14
Tank terminals EBITDA – by geographical segment
‐25
10
2115
-30
-20
-10
0
10
20
30
Europe NorthAmerica
Asia Middle East
US
D m
illEBITDA YTD 2013
EBITDA Tank Terminals by 3Q13 2Q13
geographical segment*Europe (8) (9)North America 4 3Asia 7 7Middle East 4 5Total EBITDA 7 7
• Negative EBITDA 3Q of USD 7.9 million at OTR
• Stable on all other terminals
• USD 3 million in non-recurring items in Rotterdam
Financials
* Revenue and profit from the terminals included in the Lindsay Goldberg transaction in 2013 are recognized according to the new ownership percentages from 1 September.
Vessel operating expenses - large chemical tankers
0
2,000
4,000
6,000
8,000
10,000
12,000
03 04 05 06 07 08 09 10 11 12 13
USD
USD / day, total USD/day, crew
Operational review
16
Bunker development
71.5 71.4 69.4 68.6 70.1
(9.1) (7.7) (7.2) (4.8) (3.1)
(5.8) (1.9) (2.0) (1.0) (1.8)
56.661.8 60.2 62.7 65.2
(30)(20)(10)
- 10 20 30 40 50 60 70 80
3Q12 4Q12 1Q13 2Q13 3Q13
US
D m
ill
Net Bunker Cost
Bunker purchase Bunker clauses Bunker hedging Net bunker cost
• Net bunker cost per tonne in 3Q was USD 565
• About 30% of the remaining bunker exposure in
2013 and about 20% of the 2014 exposure is hedged
• Bunker clauses in CoAs cover about
50% of the exposure0100200300400500600700800
08 09 10 11 12 13
USD
/mt
Platts 3.5% FOB Rotterdam
Operational review
17
Fleet development - last 12 months
Fleet additions DWT Built Tanks Transaction
November 2013 Bow Andino 16,121 2000 Stainless Purchase J/V
October 2013 Bow Eagle 24,700 1988 Coated 1 year TC
August 2013 Southern Koala 21,290 2010 Stainless 2 years TC
August 2013 Golden Top 12,705 2004 Stainless 2 years TC
July 2013 Celsius Mayfair 20,000 2007 Stainless 2 year TC
June 2013 Bow Pioneer 75,000 2013 Coated New delivery
May 2013 Bow Engineer 30,086 2006 Coated Purchase
March 2013 UACC Messila 45,352 2012 Coated 1 year TC
March 2013 Bow Nangang 9,000 2013 Stainless New delivery
March 2013 Chembulk Sydney 14,271 2005 Stainless 1-2 years TC
January 2013 Chembulk Wellington 14,312 2004 Stainless 1-2 years TC
November 2012 Bow Dalian 9,000 2012 Stainless New delivery
October 2012 Chemroad Hope 33,552 2011 Stainless 1 year TC
Operational review
18
Fleet development – last 12 months
Fleet disposals, owned DWT Built Tanks Transaction
October 2013 Bow Eagle 24,700 1988 Coated Sale
May 2013 Bow Cheetah 40,257 1988 Coated Recycling
January 2013 Bow Leopard 39,512 1988 Coated Recycling
November Bow Fraternity 45,507 1987 Coated Recycling
October 2012 Bow Lion 39,423 1988 Coated Recycling
Operational review
19
Ordering of LPG/Ethylene carriers
• Four LPG/Ethylene gas carriers of 17,000 cbm
• Options for up to four additional vessels
• Favourable speed/consumption
• Deliveries October 2015 – May 2016
• Yard: Nantong Sinopacific Offshore & Engineering Co., Ltd
• Contract price of about USD 45 million per vessel
• Payment structure 10% + 10% + 10% + 70%
Operational review
20
OTR update
Operational review
• New regulatory requirements and the submission of an application by OTR for
a renewed environmental permit, have made it prudent to halt temporarily
further re-commissioning of old tank capacity at the terminal
• In the meantime OTR has initiated an intensive process of developing a revised
business plan. This plan, which is scheduled to be completed within year end,
will reflect the regulatory environment and address future business
opportunities given the strategic location of the terminal
• Current book value of OTR assets is USD 241 million. As a possible
consequence of the revised business plan, impairment of certain OTR assets,
including customer relationships and goodwill totalling USD 54 million, will be
evaluated
21
Tank terminal capacity
0
200
400
600
800
1 000
1 200
1 400
1 600
1 800
Cubic Metres`000
Mineral oil storage Chemical storage Ongoing expansions
Current capacity 5,315,891
Ongoing expansions 696,041
Total capacity in CBM (incl. related parties):
Operational review
* Odfjell’s ownership share in the respective tank terminals is shown in percentage
22
Market update - chemical tankers
• Time charter results down 4% compared with previous quarter due to increased
voyage costs
• Stable/flat chemical tanker market so far this year
• Activity steady in most areas, positive being US exports, negative palm oil and
CPP trades
• CoA renewals at better rates and improved terms and conditions
• Contract volumes at 52%, thus well positioned for improved market conditions
• Positive market sentiment
Market update and prospects
23
Core Chemical Deep-sea Fleet 2003-2016 - Orderbook and estimated demolition per November 13th, 2013
* Outphasing 30 years (Europe built) and 25 years (Asian built)Source: Odfjell FLEETBASE
Market update and prospects
-800
-400
0
400
800
1,200
1,600
2,000
03 04 05 06 07 08 09 10 11 12 13 14 15 16
'000 Dwt
-6.0%
-3.0%
0.0%
3.0%
6.0%
9.0%
12.0%
15.0%
Deliveries OrderbookActually demolished Estim. vessel outphasingNet fleet growth
% of year-start fleet
Average annual net growth:2003-2012: 8.0%2013-2016: 2.2%
24
Prospects
• World economic outlook improves
• No material changes in the supply/demand balance. Still favourable outlook,
despite recent ordering of new tonnage in China and Japan
• Expectations of tighter markets and improved freight rates
• Potentially lower bunker prices
• Expects fourth quarter to be similar or better than third quarter
• As to terminals, with the exception of OTR, we expect continued stable results
Market update and prospects
25
Company representatives
Terje Iversen – CFO, Odfjell SE
Email: [email protected]
Phone: +47 932 40 359
IR – contact:
Tom A. Haugen – VP Finance, Odfjell SE
Email: [email protected]
Phone: +47 905 96 944
Jan A. Hammer – CEO, Odfjell SE
Email: [email protected]
Phone: +47 908 39 719
Summary
26
Thank you
For more information please visit our webpage at www.odfjell.com
Q&A session