fourth quarter 2013 results...‐8 ‐40-150 ‐102-100-50 0 50 100 150 200 250 300 2011 2012 2013...

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Fourth Quarter 2013 Results Oslo – 13 February 2014

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Page 1: Fourth Quarter 2013 Results...‐8 ‐40-150 ‐102-100-50 0 50 100 150 200 250 300 2011 2012 2013 USD mill Net Result • Impairment of gross USD 81 million at OTR, positive tax effect

Fourth Quarter 2013 ResultsOslo – 13 February 2014

Page 2: Fourth Quarter 2013 Results...‐8 ‐40-150 ‐102-100-50 0 50 100 150 200 250 300 2011 2012 2013 USD mill Net Result • Impairment of gross USD 81 million at OTR, positive tax effect

2

Agenda

• Highlights

• Financials

• Operational review

• Market update and prospects

• Q&A session

Page 3: Fourth Quarter 2013 Results...‐8 ‐40-150 ‐102-100-50 0 50 100 150 200 250 300 2011 2012 2013 USD mill Net Result • Impairment of gross USD 81 million at OTR, positive tax effect

3

Highlights

• Time-charter results down 5%

compared with last quarter

• EBITDA of USD 18 million

• Impairment of net USD 76 million

recognised related to OTR

• The terminal construction project in

Charleston completed in December

Highlights

0

50

100

150

200

08 09 10 11 12 13

Inde

x 19

90=1

00

ODFIX

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

Page 4: Fourth Quarter 2013 Results...‐8 ‐40-150 ‐102-100-50 0 50 100 150 200 250 300 2011 2012 2013 USD mill Net Result • Impairment of gross USD 81 million at OTR, positive tax effect

4

Income statement - Fourth quarter 2013

USD mill 4Q13 3Q13

Gross revenue 284 296

Voyage expenses (127) (127)

TC expenses (45) (37)

Operating expenses (63) (68)

General and administrative expenses (32) (28)

Operating result before depr. (EBITDA) 18 37

Depreciation (31) (33)

Impairment (81) -

Capital gain/loss on fixed assets (5) 19

Operating result (EBIT) (99) 23

Net finance (11) (13)

Taxes 9 (0)

Net result (102) 9

Financials

Page 5: Fourth Quarter 2013 Results...‐8 ‐40-150 ‐102-100-50 0 50 100 150 200 250 300 2011 2012 2013 USD mill Net Result • Impairment of gross USD 81 million at OTR, positive tax effect

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 4Q lower due to softer volumes at year end

• Reduced ownership share in tank terminal division in 4Q following the LG

transaction in 3Q

Financials

Page 6: Fourth Quarter 2013 Results...‐8 ‐40-150 ‐102-100-50 0 50 100 150 200 250 300 2011 2012 2013 USD mill Net Result • Impairment of gross USD 81 million at OTR, positive tax effect

6

Quarterly figures - from continued operationUSD mill

12 11

‐6

8

‐5

82

‐25

23

‐1

‐23

‐99-120

-100

-80

-60

-40

-20

0

20

40

2011 2012 2013

US

D m

ill

Operating Result (EBIT)

11

‐4 ‐13

5

‐28‐2

261

‐39

9

‐8‐40

‐102-150-100

-500

50100150200250300

2011 2012 2013

USD

mill

Net Result

• Impairment of gross USD 81 million at OTR,

positive tax effect of USD 5 million

• Capital loss of USD 4.7 million related sale of

vessels

• Capital gain of USD 19 million following the

completion of the LG transaction in third quarter

‐9 ‐10 ‐10 ‐11 ‐12 ‐12 ‐13 ‐13 ‐12 ‐11 ‐12 ‐11

2 2

‐2

50

‐9‐3

‐6

61

‐1

0

-25

-20

-15

-10

-5

0

5

10

US

D m

ill

Net Finance

Net interest Other financial/currency

2011 2012 2013

Financials

Page 7: Fourth Quarter 2013 Results...‐8 ‐40-150 ‐102-100-50 0 50 100 150 200 250 300 2011 2012 2013 USD mill Net Result • Impairment of gross USD 81 million at OTR, positive tax effect

7

Balance sheet – 31.12.2013

USD mill - AssetsShips and newbuilding contracts 1 325

Tank terminals and intangible assets 536

Other non-current assets/receivables 141

Total non-current assets 2 002

Available-for-sale investments and cash 162

Other current assets 196.

Total current assets 357

Total assets 2 360

Equity and liabilitiesTotal equity 759

Non-current liabilities and derivatives 82

Non-current interest bearing debt 1 216

Total non-current liabilities 1 298

Current portion of interest bearing debt 134

Other current liabilities and derivatives 168

Total current liabilities 302

Total equity and liabilities 2 360

• Cash balance of USD 162 million

• Maturity bond in December USD 62.5 million

• 9.8% of own shares held as treasury shares

• Equity ratio 32.2%

Financials

Page 8: Fourth Quarter 2013 Results...‐8 ‐40-150 ‐102-100-50 0 50 100 150 200 250 300 2011 2012 2013 USD mill Net Result • Impairment of gross USD 81 million at OTR, positive tax effect

8

Debt development

• Secured long-term sale/leaseback financing for two of the Korean newbuildings

• Secured export credit financing of the two remaining vessels

• Exploring various financial arrangements for our gas newbuildings

• Evaluating refinancing of maturing vessel mortgage loans

0

200

400

600

800

1,000

1,200

1,400

2014 2015 2016 2017 2018

USD

mill

Debt Portfolio

Ending balance Repayment

050

100150200250300350400

2014 2015 2016 2017 2018

US

D m

ill

Planned Debt Repayments

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

Financials

Page 9: Fourth Quarter 2013 Results...‐8 ‐40-150 ‐102-100-50 0 50 100 150 200 250 300 2011 2012 2013 USD mill Net Result • Impairment of gross USD 81 million at OTR, positive tax effect

9

Capital expenditure programme – Odfjell’s share

In USD mill 2014 2015 2016 2017 2018Hyundai Mipo, 4 x 46,000 DWT 55

Sinopacific, 4 x 17,000 cbm 18 81 63

Docking 24 24 24 24 24

Terminals1) 99 52 16 6 4

Total 196 157 103 30 281) Planned not commited

Financials

From the naming ceremony of Bow Trajectory and Bow Tribute in Korea

Page 10: Fourth Quarter 2013 Results...‐8 ‐40-150 ‐102-100-50 0 50 100 150 200 250 300 2011 2012 2013 USD mill Net Result • Impairment of gross USD 81 million at OTR, positive tax effect

10

Income statement – 4Q13 chemical tankers and LPG/Ethylene

USD mill 4Q13 3Q13

Gross revenue 260 264

Voyage expenses (127) (127)

TC expenses (45) (37)

Operating expenses (46) (47)

General and administrative expenses (24) (23)

Operating result before depr. (EBITDA) 18 29

Depreciation (21) (24)

Capital gain/loss on fixed assets (5) 0

Operating result (EBIT) (8) 5

Financials

Page 11: Fourth Quarter 2013 Results...‐8 ‐40-150 ‐102-100-50 0 50 100 150 200 250 300 2011 2012 2013 USD mill Net Result • Impairment of gross USD 81 million at OTR, positive tax effect

11

Income statement – 4Q13 tank terminals

USD mill 4Q13 3Q13

Gross revenue 25 33

Operating expenses (17) (21)

General and administrative expenses (9) (6)

Operating result before depr. (EBITDA) (0) 7

Depreciation (10) (9)

Impairment (81) -

Capital gain/(loss) 0 19

Operating result (EBIT) (91) 17

Financials

Page 12: Fourth Quarter 2013 Results...‐8 ‐40-150 ‐102-100-50 0 50 100 150 200 250 300 2011 2012 2013 USD mill Net Result • Impairment of gross USD 81 million at OTR, positive tax effect

12

Results per segment

4Q13 3Q13

USD mill Chemical tankers/LPG

Tank terminals

Chemical tankers/LPG

Tank terminals

Gross revenue 260 25 264 33EBITDA 18 (0) 29 7EBIT (8) (91) 5 17

0%

20%

40%

60%

80%

100%

Gross revenue EBITDA Assets

4Q13

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

Page 13: Fourth Quarter 2013 Results...‐8 ‐40-150 ‐102-100-50 0 50 100 150 200 250 300 2011 2012 2013 USD mill Net Result • Impairment of gross USD 81 million at OTR, positive tax effect

13

Tank terminals EBITDA – by geographical segment

‐33

14

2318

-40

-30

-20

-10

0

10

20

30

Europe NorthAmerica

Asia Middle East

US

D m

illEBITDA YTD 2013

EBITDA Tank Terminals by 4Q13 3Q13

geographical segment*Europe (8) (8)North America 3 4Asia 3 7Middle East 2 4Total EBITDA 0 7

• Negative EBITDA 4Q of USD 9.1 million at OTR

• USD 2 million in non-recurring items

• Mostly stable on all other terminals

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.

Page 14: Fourth Quarter 2013 Results...‐8 ‐40-150 ‐102-100-50 0 50 100 150 200 250 300 2011 2012 2013 USD mill Net Result • Impairment of gross USD 81 million at OTR, positive tax effect

Vessel operating expenses - large chemical tankers

0

2,000

4,000

6,000

8,000

10,000

12,000

04 05 06 07 08 09 10 11 12 13

USD

USD / day, total USD/day, crew

Operational review

Page 15: Fourth Quarter 2013 Results...‐8 ‐40-150 ‐102-100-50 0 50 100 150 200 250 300 2011 2012 2013 USD mill Net Result • Impairment of gross USD 81 million at OTR, positive tax effect

15

Bunker development

71.4 69.4 68.6 70.1 71.1

(7.7) (7.1) (4.8) (3.1) (4.9)

(1.9) (2.0) (1.0) (1.8) (1.1)

61.8 60.2 62.7 65.2 65.1

(30)(20)(10)

- 10 20 30 40 50 60 70 80

4Q12 1Q13 2Q13 3Q13 4Q13

US

D m

ill

Net Bunker Cost

Bunker purchase Bunker clauses Bunker hedging Net bunker cost

• Net bunker cost per tonne in 4Q was USD 553

• About 20% of the 2014 exposure is hedged

• Bunker clauses in CoAs cover about

53% of the exposure

0100200300400500600700800

09 10 11 12 13 14

USD

/mt

Platts 3.5% FOB Rotterdam

Operational review

Page 16: Fourth Quarter 2013 Results...‐8 ‐40-150 ‐102-100-50 0 50 100 150 200 250 300 2011 2012 2013 USD mill Net Result • Impairment of gross USD 81 million at OTR, positive tax effect

16

Fleet development - last 12 months

Fleet additions DWT Built Tanks Transaction

January 2014 Celsius Mumbai 19 993 2005 Stainless 1.5 years TC

December 2013 RT Star 26 199 2011 Stainless 3 years TC

December 2013 Celsius Miami 19 991 2005 Stainless 1.5 years TC

November 2013 Celsius Manhatten 19 807 2006 Stainless 1.5 years TC

November 2013 Bow Condor 16 121 2000 Stainless Purchase J/V

October 2013 Bow Eagle 24 700 1988 Stainless 1 year TC

August 2013 Southern Koala 21 290 2010 Stainless 2 years TC

August 2013 Golden Top 12 705 2004 Stainless 2.5 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 Stainless 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

Operational review

Page 17: Fourth Quarter 2013 Results...‐8 ‐40-150 ‐102-100-50 0 50 100 150 200 250 300 2011 2012 2013 USD mill Net Result • Impairment of gross USD 81 million at OTR, positive tax effect

17

Fleet development – last 12 months

Fleet disposals, owned DWT Built Tanks Transaction

December 2013 Bow Mate 6 001 1999 Stainless Sale

October 2013 Bow Eagle 24 700 1988 Stainless Sale

May 2013 Bow Cheetah 40 257 1988 Coated Recycling

January 2013 Bow Leopard 39 512 1988 Coated Recycling

Operational review

Page 18: Fourth Quarter 2013 Results...‐8 ‐40-150 ‐102-100-50 0 50 100 150 200 250 300 2011 2012 2013 USD mill Net Result • Impairment of gross USD 81 million at OTR, positive tax effect

18

Odfjell Gas Carriers - at a glance

Established June 2012 with the acquisition of two gas carriers

Wholly owned subsidiary of Odfjell SE with in-house commercial and technical management

Focus on ethylene capable semi-refrigerated LPG carriers

Newbuilding programme of four 17,000 cbm LPG/Ethylene carriers for delivery in 2015 - 2016

Options for four additional gas carriers of 17,000 or 22,000 cbm for delivery in 2016-2017

Operational review

2 x 4 x4 x

The Odfjell LPG/Ethylene carrier fleet

Page 19: Fourth Quarter 2013 Results...‐8 ‐40-150 ‐102-100-50 0 50 100 150 200 250 300 2011 2012 2013 USD mill Net Result • Impairment of gross USD 81 million at OTR, positive tax effect

19

Odfjell Gas Carriers - financing

We are assessing various sources of finance for the order of four 17,000 cbmLGP/Ethylene vessels (with up to four options)

We are also evaluating potential sources of financing to fund further growth of our LPG/Ethylene activities, including partnerships with industrial or financial stakeholders

Operational review

-

10

20

30

40

50

60

70

US (ethane) US (propane) US (butane) US (naphta) W.Europe(naphta)

FE Asia (naphta)

US

cent

s pe

r pou

nd

Ethylene feedstock price

October 2005 Current

Large cost benefits for US petrochemicals producers

~$0.40/lbadvantage

Source: Bloomberg, SEB Research, Enterprise Products Partners

Page 20: Fourth Quarter 2013 Results...‐8 ‐40-150 ‐102-100-50 0 50 100 150 200 250 300 2011 2012 2013 USD mill Net Result • Impairment of gross USD 81 million at OTR, positive tax effect

20

Odfjell Gas Carriers - timing and future

Well positioned to benefit from growing long haul trade

Odfjell’s strong brand name and global network of marketing and operating offices provide a robust competitive edge

Robust long-term market fundamentals driven by the US shale gas revolution

Contracting tonnage at attractive prices at the bottom of the cycle

Petrochemical demand strongly linked to GDP growth, expected to pick up in 2014 and gain momentum through 2016

Aim to pursue a well-balanced portfolio of spot, TC and contract business

Operational review

2.91.4 1.3 1.0 0.50.8

2.43.3 3.6

5.0

8.5

11.8

14.5

0

2

4

6

8

10

12

14

16

2008 2009 2010 2011 2012 2013E 2014E 2015E

Mill

ion

tonn

es L

PG

Imports Exports

US LPG imports / exports

Source: Poten & Partners, EIA, SEB Research

Page 21: Fourth Quarter 2013 Results...‐8 ‐40-150 ‐102-100-50 0 50 100 150 200 250 300 2011 2012 2013 USD mill Net Result • Impairment of gross USD 81 million at OTR, positive tax effect

21

Terminal projects and expansions

Operational review

• Construction project at Charleston completed in December 2013 –

80,000 cbm available for service

• Terminal project in Tianjin in progress and planned completed by 4Q 2014

• Expansion project adding 30,000 cbm at the terminal in Houston expected

completed by end of 2Q 2014

Page 22: Fourth Quarter 2013 Results...‐8 ‐40-150 ‐102-100-50 0 50 100 150 200 250 300 2011 2012 2013 USD mill Net Result • Impairment of gross USD 81 million at OTR, positive tax effect

22

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 5,423,602

Ongoing expansions 584,350

Total capacity in CBM (incl. related parties):

Operational review

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

Page 23: Fourth Quarter 2013 Results...‐8 ‐40-150 ‐102-100-50 0 50 100 150 200 250 300 2011 2012 2013 USD mill Net Result • Impairment of gross USD 81 million at OTR, positive tax effect

23

OTR update

Operational review

• Renewal of environmental operating permit started, will cover new regulatory

requirements for the industry

• Inspections and the need for efficient implementation of improvements have

made it necessary to slow down the pace at which capacity is brought back on

stream

• 730,000 cbm available capacity as per end December 2013

• Substantial efforts under way to improve the profitability by bringing back

further tank capacity in service and by adjusting the cost structure

• Continued development of long-term business plan

• Impairment of net USD 76 million recognised in fourth quarter

Page 24: Fourth Quarter 2013 Results...‐8 ‐40-150 ‐102-100-50 0 50 100 150 200 250 300 2011 2012 2013 USD mill Net Result • Impairment of gross USD 81 million at OTR, positive tax effect

24

Market update – chemical tankers

• Time charter results down 5% compared with previous quarter due to lower

volumes shipped

• Activity slowed during fourth quarter, December in particular

• Volume and rates out of US and Europe remained strong

• Decline in exports out of Asia and the Middle East put increased pressure on rates

• Most CoA renewals at higher rates

Market update and prospects

Page 25: Fourth Quarter 2013 Results...‐8 ‐40-150 ‐102-100-50 0 50 100 150 200 250 300 2011 2012 2013 USD mill Net Result • Impairment of gross USD 81 million at OTR, positive tax effect

25

Core Chemical Deep-sea Fleet 2004 - 2017Orderbook and estimated recycling per February 11th, 2014

* 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

04 05 06 07 08 09 10 11 12 13 14 15 16 17

'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:2004 - 2013: 7.6%2014 - 2017: 1.9%

Page 26: Fourth Quarter 2013 Results...‐8 ‐40-150 ‐102-100-50 0 50 100 150 200 250 300 2011 2012 2013 USD mill Net Result • Impairment of gross USD 81 million at OTR, positive tax effect

26

Prospects

• Strongest GDP growth in the US for the last three years

• Continued gradual improvement of the European economy

• Still healthy economic growth in China

• The fundamentals within the LPG/Ethylene segment continue to improve

• First quarter expected to be similar or slightly better than fourth quarter for both

the chemical tanker and LPG/Ethylene segments

• For our tank terminals, with the exception of OTR, we expect continued stable

results

Market update and prospects

Page 27: Fourth Quarter 2013 Results...‐8 ‐40-150 ‐102-100-50 0 50 100 150 200 250 300 2011 2012 2013 USD mill Net Result • Impairment of gross USD 81 million at OTR, positive tax effect

27

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

Page 28: Fourth Quarter 2013 Results...‐8 ‐40-150 ‐102-100-50 0 50 100 150 200 250 300 2011 2012 2013 USD mill Net Result • Impairment of gross USD 81 million at OTR, positive tax effect

28

Thank you

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

Q&A session