bro q1 presentation 2008

Broström Q1 Presentation 2008

Lennart Simonsson, CEOAnders Dreijer, Deputy MD

Datum: 29 april 2008

Årsstämma 2008

Sida 2

Agenda

• Q1 2008 in words

• Q1 2008 in figures

• Fleet development

• Market trends

• Outlook 2008

• Summary


Årsstämma 2008

Sida 3

Q1 in words

• Volatile and weak freight market during first quarter of 2008

– Unseasonably mild weather in the major consumption areas in Europe and North America led to lower consumption of fuel oil, with lower freight rates as a result, both in European and trans-Atlantic traffic.

– Due to the mild weather, the normally stronger winter market in the Baltic Sea did not transpire.

– Low export volumes of Russian oil products.

– Asian traffic in Small and Intermediate tonnage had stable development during the period, while the Medium Range segment was characterised by high volatility and lower freight rates.

– Earnings hurt by the high price of bunker oil and the weak US dollar.

– Overall favourable result of the renewal of contracts of affreightment during the first quarter.


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Sida 4

Q1 in words

• Change in transport capacity

– The BRO ANNA and the BRO AGNES, both 17,000 dwt, were delivered during the first quarter and are now operating in European traffic.

– The GAN-SABRE, 51,000 dwt, was delivered in January and is operating in Asian traffic.

– An agreement was reached on the sale of the BRO ERIK (37,000 dwt) to a partner. Delivery will take place in May 2008. The sale will give rise to a gain of SEK 65 m and a cash contribution of SEK 140 m, which will be recognised in the second quarter report.


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Sida 5

Income Statement

Q1 Q1 Full yearSEK m 2008 2007 2007Net sales 872 926 3 504EBITDA 155 301 1 037EBIT 59 218 664Profit after financial items 2 173 450Net profit 6 151 427

Earnings per share, SEK 0,09 2,26 6.50

ROCE 2,6% 13,7% 9.8%Cash flow/share * 0,52 3,72 11.55

Dividends paid 258Repurchases of treasury shares 12 85 135

Free cash, end of period 747 993

*) from operating activities before dividends


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Sida 6

Broström – a global logistics company

57 vessels in European trade

23 vessels in Asia

9 vessels in the Atlantic

89 vessels

+ 13 vessels to be added within next 15 months


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Sida 7

Fleet Growth

Newbuildings on order on 31 March 2008

Name Delivery Dwt Ownership Partner

BRO ALMA 2008 17,000 100%

GAN-SKY 2008 17,000 C/M Dünya

CPO FRANCE 2008 37,000 C/M Offen

CPO SWEDEN 2008 37,000 C/M Offen

CPO GERMANY 2008 37,000 C/M Offen

CPO NORWAY 2008 37,000 C/M Offen

CPO RUSSIA 2008 37,000 C/M Offen

CPO ITALY 2008 37,000 C/M Offen

CPO FINLAND 2008 37,000 C/M Offen

CPO ENGLAND 2008 37,000 C/M Offen

NB EDWARDS 2008 19,500 C/M Donsötank

NB 386 2009 7,500 50% Thun

NB 387 2009 7,500 50% Thun


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Sida 8

Broström’s Fleet of Tanker Vessels- April 2008

Small Intermediate Handy/MR GRAND5-10 kdwt 10-30 kdwt 30-60 kdwt TOTAL

Active vessels Wholly/Partly owned 14 23 17 54Commercial Management 1 19 6 26Bareboat charter in 3 3Time charter in 2 4 6

TOTAL ACTIVE 15 44 30 89

Vessels on order Wholly/Partly owned 2 1 3Commercial Management 2 8 10

TOTAL ON ORDER 2 3 8 13

GRAND TOTAL 17 47 38 102

Wholly/Partly owned61%

Commercial Management

29%

Bareboat charter in3%

Time charter in7%


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Sida 9

Market Trends


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Sida 10

Oil Price


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Sida 11

US Product Demand

US Product demand is increasing and exceeds

previous year !


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Sida 12

US Gasoline Stocks

US Gasoline stocks are coming down from

historically high levels -

requiring increased imports


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Sida 13

Global Refinery Margins

Refinery margins are in an upward trend !


Årsstämma 2008

Sida 14

Spot Market Earnings

Increased demand for transportation contributes to

increased vessel earnings


Årsstämma 2008

Sida 15

Baltic Clean Tanker Index

Baltic Clean Tanker Index exceeds previous year and 4-year-average


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Sida 16

Vessel Values

• Contributors to maintained strong vessel values

– Steel prices

– Strong dry bulk tonnage demand

– High ship yard capacity utilisation


Årsstämma 2008

Sida 17

Ship Values

Newbuilding Prices & Shipvalues

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47,000 dwt - NB contract47,000 dwt - NB resale 45,000 dwt - 5yr 45,000 dwt - 10yr 45,000 dwt - 20yr


Årsstämma 2008

Sida 18

Surplus value of the Broström fleet

• Market valuation of

– Existing vessels

– Newbuilding contracts

– Call options of vessels

• Average based on two external brokers

• As per 31 December 2007 the market value exceeded book value by approximately SEK 2.7 billion

– SEK 41/share

• Booked values as per 31 December 2007

– Equity incl equalisation reserve SEK 40/share

– Deferred tax SEK 7/share


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Sida 19

Outlook 2008


Årsstämma 2008

Sida 20

Outlook 2008

• The start of the second quarter of 2008 has been characterised by a continued weak freight market in Broström’s market segments, even though some improvement has been noted.

• Broström's strategic position for 2008 and onward has been further strengthened through acquisitions and investments made in recent years.

• The underlying long-term trend for Broström’s market segments is judged to be positive, even though major fluctuations may occur from time to time.

bro q1 presentation 2008

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