fourth quarter 2013 results...‐8 ‐40-150 ‐102-100-50 0 50 100 150 200 250 300 2011 2012 2013...
TRANSCRIPT
Fourth Quarter 2013 ResultsOslo – 13 February 2014
2
Agenda
• Highlights
• Financials
• Operational review
• Market update and prospects
• Q&A session
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
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
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
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
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
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
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
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
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
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
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.
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
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
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
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
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
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
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
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
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
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
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
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%
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
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
28
Thank you
For more information please visit our webpage at www.odfjell.com
Q&A session