First Quarter 2014 Results
Bergen – 8 May 2014
Agenda
•
Highlights
•
Financials
•
Operational review
•
Market update and prospects
Highlights
Highlights
ODFIX
Time-charter results in line with last
quarter
•
Chemical Tankers EBITDA of USD
17 million
•
Index 1990=100
•
A major reorganisation, efficiency
180
160
140
120
100
80
60
40
20
0
08
09
10
11
12
13
14
drive and cost - cutting process has
Annualized EBITDA¹
been kicked off
300
The process at Odfjell Terminals
(Rotterdam) of re-organisation to
improve its cost base continues. This
includes a reduction of more than
100 positions
250
USD mill
•
350
200
150
100
50
0
04
05
06
07
08
09
10
11
12
13
14
halloooo
oooooo
¹ Proportional consolidation method according
to
actual historical ownership share
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Chemical tankers
Tank terminals
Financials
Change of accounting principle
Equity method versus proportional consolidation method
•
Effective from 1 January 2014, Odfjell has adopted IFRS 11. All joint ventures
previously accounted for by applying the “proportionate consolidation method”
are now accounted for by applying the “equity method”
•
Odfjell’s share of net result and net investment is therefore now reported in one
single line in the income statement and statement of financial position,
previously this was accounted for line-by-line
•
The change in accounting principles does not have any impact on the Group’s
equity
•
Comparative figures have been adjusted
•
The effect on the income statement and statement of financial position is
further described in note 8 of the financial accounts
Financials
Income statement¹ - First quarter 2014
1Q14
4Q13
266
256
Voyage expenses
(130)
(126)
TC expenses
(52)
(44)
Operating expenses
(43)
(46)
Share of net result from associates and JV
(7)
(77)
General and administrative expenses
(25)
(23)
9
(60)
Depreciation
(23)
(20)
Capital gain/loss on fixed assets
(0)
(5)
Operating result (EBIT)
(14)
(86)
Net finance
(8)
(16)
Taxes
(1)
1
Net result
(23)
(102)
USD mill
Gross revenue
Operating result before depr. (EBITDA)
¹ Equity method
hallo
Financials
Quarterly figures¹
USD mill
EBITDA
Gross Revenue
45
350
40
300
35
30
USD mill
USD mill
250
200
150
25
20
15
100
10
50
5
0
0
2012
2013
2014
2012
2013
•
EBITDA 1Q unchanged on flat market development from last quarter
•
Bunker remained high during the quarter on political conflicts
¹ Proportional consolidation method
2014
Financials
Quarterly figures
USD mill
•
Operating Result (EBIT)¹
40
impairment of net USD 81 million
23
11
20
8
•
0
‐5
USD mill
-20
‐6
Chemical tanker contracts mostly renewed at
higher rates, volumes show positive development
‐15
‐25 ‐23
-40
EBIT in line with previous quarter, which included
•
Net interest remain stable
-60
-80
-100
‐99
-120
2012
2013
2014
Net Finance²
Net Result
10
20
7
0
0
-5
‐8
‐9
‐9
‐9
‐9
‐7
‐7
‐9
-20
‐9
‐1
-10
-15
‐3
‐9
9
0
1
USD mill
USD mill
5
‐6
‐7
‐15
-40
‐2
‐4
‐13
‐23
‐28
‐39 ‐40
-60
-80
-20
-100
-25
Net interest
2012
Other financial/cu rrency
2013
¹ Proportional consolidation method
² Equity method
2014
‐102
-120
2012
2013
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2014
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Financials
Balance sheet¹ – 31.03.2014
USD mill - Assets
Ships and newbuilding contracts
Other non-current assets/receivables
Investment in associates and JV’s
Total non-current assets
Available-for-sale investments and cash
Equity and liabilities
1 305
79
374
1 757
Total equity
Non-current liabilities and derivatives
Non-current interest bearing debt
Total non-current liabilities
729
37
991
1 029
80
Current portion of interest bearing debt
131
Other current assets
169.
Other current liabilities and derivatives
117
Total current assets
249
Total current liabilities
248
Total assets
2 006
Total equity and liabilities
•
Cash balance of USD 80 million
•
Net investment in tank terminals JV’s USD 364 million
•
9.8% of own shares held as treasury shares
•
Equity ratio 36.3%
¹ Equity method
2 006
Financials
Debt development1
•
Exploring various financial arrangements for our gas newbuildings
•
Evaluating refinancing of maturing vessel mortgage loans
Planned Debt Repayments
1,400
400
1,200
350
1,000
300
800
250
USD mill
USD mill
Debt Portfolio
600
400
200
150
100
200
50
0
0
2014
2015
Ending balance
2016
2017
2018
2014
2015
2016
2017
2018
Repayment
Secured loans
NOK bond 12/15
¹ Proportional consolidation method
Balloon
NOK bond 12/17
Leasing
NOK Bond 12/18
Financials
Capital expenditure programme – Odfjell’s share
2014
In USD mill
2015
2016
2017
2018
Hyundai Mipo, 4 x 46,000 DWT
55
Sinopacific, 4 x 17,000 cbm
18
81
63
Docking
18
24
24
24
24
Terminals1
93
51
16
6
4
184
156
103
30
28
Total
1
Planned not commited
From the naming ceremony of Bow Trident in Korea
Financials
Income statement¹ – 1Q14 chemical tankers and LPG/Ethylene
1Q14
4Q13
268
260
Voyage expenses
(130)
(127)
TC expenses
(52)
(45)
Operating expenses
(44)
(46)
General and administrative expenses 2
(25)
(24)
Operating result before depr. (EBITDA)
17
18
(23)
(21)
0
(5)
(7)
(8)
USD mill
Gross revenue
Depreciation
Capital gain/loss on fixed assets
Operating result (EBIT)
¹ Proportional consolidation method
2 Including corporate
Financials
Income statement¹ – 1Q14 tank terminals
1Q14
4Q13
23
25
Operating expenses
(17)
(17)
General and administrative expenses
(6)
(9)
Operating result before depr. (EBITDA)
(0)
(0)
Depreciation
(8)
(10)
Impairment
-
(81)
Capital gain/(loss)
-
0
(8)
(91)
USD mill
Gross revenue
Operating result (EBIT)
¹ Proportional consolidation method
Financials
Results per segment¹
Annualized EBITDA – actual ownership
1Q14
100 %
90 %
80 %
70 %
60 %
50 %
40 %
30 %
20 %
10 %
0%
350
300
USD mill
250
200
150
100
50
0
Gross revenue
EBITDA
Chemical tankers
Assets
04
05
06
07
08
09
10
Chemical tankers
Tank terminals
1Q14
11
4Q13
Tank
terminals
Chemical
tankers/LPG
Tank
terminals
268
23
260
25
EBITDA
17
0
18
(0)
EBIT
(7)
(8)
(8)
(91)
Gross revenue
¹ Proportional consolidation method
13
Tank terminals
Chemical
tankers/LPG
USD mill
12
14
Financials
Tank terminals EBITDA – by geographical segment
EBITDA YTD 2014
4
3
3
2
•
Negative EBITDA 1Q of USD 8.8 million at OTR,
2
including USD 1.2 million in non-recurring items
USD mill
0
•
-2
Divested the non-strategic terminal in Ningbo,
-4
China. A capital gain of USD 3.2 million will be
-6
booked in second quarter
-8
-10
•
‐9
Europe
North
America
Asia
EBITDA Tank Terminals by
geographical segment
Mostly stable on all other terminals
Middle East
1Q14
4Q13
(9)
(8)
North America
3
3
Asia
3
3
Middle East
2
2
(0)
0
Europe
Total EBITDA
* 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 2013.
Operational review
Vessel operating expenses - chemical tankers
12,000
10,000
USD
8,000
6,000
4,000
2,000
0
05
06
07
08
09
USD / day, total
10
11
12
USD/day, crew
13
14
Operational review
Bunker development
Net Bunker Cost
80
70
62.7
65.2
68.6
65.2
67.7
70.1
71.1
72.3
(4.8)
(3.1)
(4.8)
(2.0)
(1.0)
(1.8)
(1.1)
(0.4)
1Q13
2Q13
3Q13
4Q13
1Q14
60.2
60
50
USD mill
40
30
69.4
20
10
-
(7.1)
(10)
(4.2)
(20)
(30)
Bunker purchase
Bunker clauses
Bunker hedging
Net bunker cost
Platts 3.5% FOB Rotterdam
800
700
• Net bunker cost per tonne in 1Q was USD 565
USD/mt
600
500
• About 20% of the 2014 exposure is hedged
400
• Bunker clauses in CoAs cover about
300
200
53% of the exposure
100
0
09
10
11
12
13
14
hallooooo
oooooooo
oooooo
Operational review
Fleet development - last 12 months
Fleet additions
DWT
Built
Tanks
Transaction
April 2014
Bow Trajectory
46 000
2014
Coated
Bareboat
April 2014
Bow Harmony
33 619
2008
Stainless
Purchase
March 2014
SG Friendship
19 773
2003
Stainless
Medium-term TC
Februay 2014
Berlian Ekuator
35 000 cbm
2004
LPG
Short-term TC
January 2014
Celsius Mumbai
19 993
2005
Stainless
Medium-term TC
December 2013
RT Star
26 199
2011
Stainless
Medium-termTC
December 2013
Celsius Miami
19 991
2005
Stainless
Medium-termTC
November 2013
Celsius Manhatten
19 807
2006
Stainless
Medium-termTC
November 2013
Bow Condor
16 121
2000
Stainless
Purchase J/V
October 2013
Bow Eagle
24 700
1988
Stainless
Short-termTC
August 2013
Southern Koala
21 290
2010
Stainless
Medium-termTC
August 2013
Golden Top
12 705
2004
Stainless
Medium-termTC
July 2013
Celsius Mayfair
20 000
2007
Stainless
Medium-termTC
June 2013
Bow Pioneer
75 000
2013
Coated
New delivery
May 2013
Bow Engineer
30 086
2006
Stainless
Purchase
Short-term:
Medium-term:
Long-term:
Up to one year
1-3 years
More than three years
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Operational review
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
Operational review
Odfjell Gas Carriers – current status

Revenues and gross result improved compared to last quarter, positive outlook for
the second quarter

Current fleet consist of 2 x 9,000 cbm owned vessels and one on a 1 year time
charter

Fixed order of four 17,000 cbm gas carriers

Options for four additional gas carriers of 17,000 cbm or 22,000 cbm for delivery in
2016-2017

We are in process of evaluating partnerships to further grow our LPG/Ethylene
business
USD mill
1Q14
4Q13
Gross revenue
5
2
EBITDA
0
(1)
(1)
(2)
EBIT
Operational review
Terminal projects and expansions
•
The expansion at the Antwerp terminal has been concluded, adding 50,000 cbm of
tank capacity
•
Expansion project adding 30,000 cbm at the terminal in Houston is estimated to be
completed by 3Q 2014
•
The new terminal project in Tianjin is in good progress and planned completed
around year end 2014
The terminal in Charleston, USA is now fully operational
hallooo
oooooo
The expansion at the Antwerp terminal concluded
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Operational review
Tank terminal capacity
Total capacity in CBM (incl. related parties):
Current capacity
Ongoing expansions
1,800
1,600
1,400
Cubic Metres`000
1,200
1,000
800
600
400
200
0
Mineral oil storage
Chemical storage
Ongoing expansions
* Odfjell’s ownership share in the respective tank terminals is shown in percentage
5,448,602
576,520
Operational review
Odfjell Terminals (Rotterdam) – current status
•
The process of re-organisation to improve the costbase to market level continues
•
Dialogue with the Unions has started
•
Level of activity at the terminal is reduced significantly
•
Commercial focus is on improving utilisation and seeking customers for the
available tank capacity
Market update and prospects
Reducing cost and improving efficiency
•
A major reorganisation, efficiency drive and cost - cutting process have been
kicked off
•
Review all aspects of our business model, including ownership models and
organisational structures
•
Identify areas of improvements
•
Strengthen the focus on operational efficiency:
 Fuel consumption
 Turnaround time in port
 Ship maintenance
 Docking operation
Operational review
Supervisory Authority of Norway (Finanstilsynet)
•
Completed review of certain aspects of the Odfjell Group’s financial reporting
for 2012
•
The review did not have any impact on the approved consolidated financial
statements for 2012 or 2013
•
This letter can be reviewed in full at the homepage for Finanstilsynet
Market update and prospects
Market update – chemical tankers
•
Time charter results in line with previous quarter
•
Activity in the first quarter continued on a slow and disappointing pace
•
Volume and rates out of US remained strong, earnings weak on delays due to bad
weather
•
Rates under pressure as tonnage was abundant
•
Most CoA renewals at higher rates
Market update and prospects
Core Chemical Deep-sea Fleet 2003-2017 - Orderbook and
estimated demolition per May 5th, 2014
t
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0
.
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1
t
w
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0
0
00
'
0
0
,
2
%
0
.
2
1
0
0
6
,
1
Average annual net growth:
2003-2012:
8.2%
2013-2017:
3.3%
%
0
.
9
0
0
2
,
1
%
0
.
6
0
0
8
%
0
.
3
0
0
4
0
%
0
.
0
0
05
06
07
08
09
10
11
12
13
14
15
16
17
%
0
.
3
-
0
4
-
04
%
0
.
6
-
0
0
8
-
g
n
i
s
a
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p
t
u
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l
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s
ks
oe
ov
b.
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eg
sdt
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f
vat
u
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DAN
Source: Odfjell FLEETBASE
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* Outphasing 30 years (Europe built) and 25 years (Asian built)
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Market update and prospects
Prospects
•
Pace of the US economic growth is poised to snap back
•
The unrest in Ukraine is the biggest risk to an optimistic economic growth for the
Euro zone
•
Disappointing economic indicators in China and debt default risk is rising
•
Second quarter expected to be better than first quarter for the chemical tanker
and LPG/Ethylene segments
•
For our tank terminals, with the exception of OTR, we expect continued stable
results
Company representatives
Jan A. Hammer – CEO, Odfjell SE
Terje Iversen – CFO, Odfjell SE
Email: Jan.Hammer@odfjell.com
Email: Terje.Iversen@odfjell.com
Phone: +47 908 39 719
Phone: +47 932 40 359
IR – contact:
Tom A. Haugen – VP Finance, Odfjell SE
Email: Tom.Haugen@odfjell.com
Phone: +47 905 96 944
Thank you
For more information please visit our webpage at www.odfjell.com