Dampskibsselskabet Norden A/s · OMXCOP:DNORD
Dampskibsselskabet Norden A/s — Norden — Q1 2016 Earnings Presentation
33 slides from Dampskibsselskabet Norden A/s's earnings presentation, May 4, 2016
Slide 1: NORDEN Results First quarter of 2016
NORDEN RESULTS First quarter of 2016 Hellerup, Denmark 4 May 2016 NORDEN – FIRST QUARTER OF 2016 RESULTS | 1 Our business is global tramp shipping
Slide 2: Agenda
AGENDA Group highlights Financials Dry Cargo Tankers 2016 expectations Q&A NORDEN – FIRST QUARTER OF 2016 RESULTS | 2 Our business is global tramp shipping
Slide 3: Q1 Highlights
Q1 HIGHLIGHTS Adjusted result Key messages 50 Adjusted result for Q1 USD -5 mill. 40 30 27 29 EBIT USD -1.3 mill. 20 18 USD million 10 3 0 Historical low market in Dry Cargo -10 -5 -20 Improvement at the end of Q1 Q4: -337 (incl. write -30 downs and provisions) -40 -50 Continued strength i
Slide 4: Tankers continue to cushion the effects of the low dry market
FINANCIALS TANKERS CONTINUE TO CUSHION THE EFFECTS OF LOW THE LOW DRY MARKET Adjusted result – Dry Cargo Adjusted result - Tankers 20 35 32 10 4 30 2 26 25 0 25 USD million USD million -10 20 18 15 -20 -14 15 -20 -30 10 Q4: - 355 (incl. write -40 downs and provisions) 5 -50 0 Q1 2015 Q2 2015 Q3 2015
Slide 5: Balanced capital structure
FINANCIALS BALANCED CAPITAL STRUCTURE USD 7 million in cash flow from operations Net commitments lowered by USD 15 million during Q1 2016 Combined undrawn credit facilities, cash and securities at USD 673 million versus USD 244 million in outstanding yard payments. Payments for newbuildings le
Slide 6: Dry cargo values stabilised
ASSET VALUES DRY CARGO VALUES STABILISED Asset values for Dry Cargo declined further in Q1, however they started to stabilise at the end of Q1 as spot rates improved Limited change in Tanker values Value of owned fleet is 50/50 between Dry Cargo and Tankers 5-year second hand prices Broker ass
Slide 7: Dry Cargo: new historical lows – recent rebound
DRY CARGO NEW HISTORICAL LOWS – RECENT REBOUND Poor market weakened further in Q1 The Baltic Dry Index hit all-time low levels in February Seasonal slow down in iron ore and grain trade Rates increased towards the end of Q1 due to a recovery in Chinese iron ore and coal imports as well as a
Slide 8: Higher Chinese iron ore imports
DRY CARGO HIGHER CHINESE IRON ORE IMPORTS The Chinese iron ore imports has increased by 6.4 % YoY driven by higher margins for the domestic steel producers Q1 Chinese coal imports stabilized India coal imports continue to disappoint Exports to China are up in Q1 16 compared to Q1 15 Coal expor
Slide 9: Improved demand outlook – but limited impact
DRY CARGO IMPROVED DEMAND OUTLOOK – BUT LIMITED IMPACT Improved outlook for 2016 demand growth Uptick in Chinese activity driven by improved property market and new infrastructure projects 2016 fleet growth expected to be 1-3 % Current high scrapping activity indicates an annualised scrappin
Slide 10: Continued strong MR market – but weak Handy market
TANKERS CONTINUED STRONG MR MARKET – BUT WEAK HANDY MARKET The good market conditions for MRs from 2015 have more or less continued into 2016 with spot rates above the 5-year average for the period Disappointing winter season in Handy market The mild winter limited demand in Europe and limited
Slide 11: Upcoming gasoline production to drive market
TANKERS UPCOMING GASOLINE PRODUCTION TO DRIVE MARKET Highlights NWE & US Gasoline yield (%/barrel of crude) Gasoline demand is still expected to drive the market this 50% 26% year 48% 24% Diesel inventories remain elevated due to weak diesel 46% 22% demand 44% 20% Gasoline production Q2-Q3 is
Slide 12: Short-term outlook remains good
TANKERS SHORT-TERM OUTLOOK REMAINS GOOD The fundamental market development expectations remain unchanged from a short-term perspective – the market is expected to remain healthy in the coming quarters High fleet growth expected in 2016 (≈6%) Backloaded orderbook indicates influx of crude tonnage
Slide 13: 2016 Full Year Guidance
2016 FULL YEAR GUIDANCE Outlook Comments USDm Dry Cargo Tankers Total Guidance maintained Adjusted results for -85 to -25 25 to 55 -60 to 30 the year Market developments overall as CAPEX -30 to -50 expected Adjusted net result USD -60 to 30 million Corresponds to EBIT of USD -45 to 45 millio
Slide 14: Forward looking statements
This presentation contains certain forward-looking statements reflecting the management’s present judgment of future events and financial results. Statements relating to the remainder of 2016 and subsequent years are subject to uncertainty, and NORDEN’s actual results may therefore differ from the p
Slide 15: Thank you for your attention
Thank you for your attention http://www.linkedin.com/company/ds-norden/ http://twitter.com/DS_NORDEN http://www.facebook.com/shippingtrainee.com http://www.facebook.com/dampskibsselskabetnorden Dampskibsselskabet NORDEN A/S 52, Strandvejen DK-2900 Hellerup Denmark Phone: +45 3315 0451 www.ds-norden.
Slide 16: Back up slides
FORWARD BACK UP SLIDES LOOKING STATEMENTS NORDEN – FIRST QUARTER OF 2016 RESULTS | 16 Our business is global tramp shipping
Slide 17: A leading global tramp operator
A LEADING GLOBAL TRAMP OPERATOR 236 DRY CARGO VESSELS PANAMAX (93.5) SUPRAMAX (92.2) CAPESIZE (1) POST-PANAMAX (8.6) HANDYSIZE (40.7) Modern fleet Global network of offices and port captains Pools in Dry cargo (Handysize & Post-Panamax) and Tankers (MR & Handysize) Tankers MR (26) HANDYSIZE (1
Slide 18: Development highlights
DEVELOPMENT HIGHLIGHTS 2015- Strategy: Focus & Simplicity Offices in Melbourne and Santiago 300 2005 2008 275 1871 Financial Norient Mads C. Holm founds NORDEN; first vessel delivered in crisis Product 1872 begins 250 Pool 225 1996-2005 Offices in Singapore, Number of active vessels 1875-76 200 Anna
Slide 19: Asset light business model
ASSET LIGHT BUSINESS MODEL… Active fleet can quickly be adjusted to demand and market conditions Fleet employment based on portfolio view Flexible fleet Coverage and customer focus Capacity Employment CORE FLEET Sale and purchase Customer relations Contracts of Technical competencies in- O
Slide 20: Enabling value creation based on the cycle and throughout the cycle
…ENABLING VALUE CREATION BASED ON THE CYCLE AND THROUGHOUT THE CYCLE Exploiting the cycle Creating value throughout the cycle Taking a view on the fundamental market and adjusting our Creating value above industry level irrespective of market exposure conditions Levers: Levers: Commercial operations
Slide 21: Overall results
OVERALL RESULTS USD million Q1 2015 Q4 2015 Q1 2016 EBITDA - Dry Cargo 14 -148.3 -12.5 EBITDA - Tankers 33.3 28.3 23.9 EBITDA - Group 47.3 -120 11.4 Depreciation -17.2 -197.4 -13.3 EBIT Group 30 -368.6 -1.3 Result of the period 38.6 -377 4.6 Adjusted Result for the period 27.3 -337.1 -5.3 Cash flow
Slide 22: Impairment and provision announced Jan. 2016
IMPAIRMENT AND PROVISION ANNOUNCED JAN. 2016 - EQUITY ALIGNED WITH ”VALUE IN USE” Effect of provisions made in 2014 and 2015 Impairment of book values of owned Incl. JV 2014 2015 2016 2017 2018 2018+ vessels: USD 180 million USD million Provision on onerous TC-in contracts: 2014 -230 80 70 60 10
Slide 23: New measure for earnings (TCE)
VALUE CREATION NEW MEASURE FOR EARNINGS (TCE) NORDENs dry cargo business is a mixture of core fleet and operation activities Operator activities Focus on the margin created when cargoes and vessels are combined New NORDEN TCE = Total TCE earnings from the core fleet + the contribution margin
Slide 24: New building prices
NEW BUILDING PRICES Panamax (Dry) MR (Tank) 60 60 50 50 40 40 USD million USD million 30 30 20 20 10 10 0 0 Source: Clarksons Source: Clarksons NORDEN – FIRST QUARTER OF 2016 RESULTS | 24 Our business is global tramp shipping
Slide 25: Dry Cargo 12 month rolling average
Our business is global tramp shipping Jan-16 Jan-16 Sep-15 Sep-15 May-15 May-15 Jan-15 Jan-15 Sep-14 Sep-14 May-14 May-14 Jan-14 Jan-14 Sep-13 Sep-13 May-13 May-13 Jan-13 Jan-13 Sep-12 Sep-12 May-12 May-12 Jan-12 Jan-12 Sep-11 Sep-11 May-11 May-11 Jan-11 Jan-11 Sep-10 Sep-10 May-10 May-10 Jan-10 Jan
Slide 26: NORDEN TCE vs classic TCE
VALUE CREATION NORDEN TCE VS CLASSIC TCE NORDEN TCE Employment and rates, Dry Cargo, Q1 2016 Vessel type Capesize Post- Panamax Supramax Handysize Total Panamax NORDEN core fleet days 167 763 2,287 1,888 2,078 7,183 New NORDEN TCE (USD per day) -694 6,242 5,616 7,367 7,073 6,418 Benchmark* 4,195 4
Slide 27: Financial strength
FINANCIAL STRENGTH Capital structure Net committed cash (ultimo) Strong focus on cash flow generation USDm Q1 2016 Q4 2015 Q3 2015 Cash in low-risk deposit accounts and Adjusted net interest bearing 18 -6 32 assets* securities T/C obligations** -1,371 -1,372 -1,366 Outstanding yard payments (i
Slide 28: Fleet values
FLEET VALUES Fleet values at 31 March 2016 USD ’000 Broker estimated value of owned Broker estimated value of Added Number Average dwt. Carrying amount/cost vessels* charter party value Dry Cargo Post-Panamax 4.0 114,000 62 46 - -16 Panamax 6.0 79,000 127 84 30 -13 Supramax 11.5 65,000 259 208 - -51
Slide 29: Dry Cargo fleet overview
DRY CARGO FLEET OVERVIEW NORDEN’s Dry Cargo fleet and values at 31 March 2016 Vessel type Capesize Post-Panamax Panamax Supramax Handysize Total Vessels in operation Owned vessels 0 4 4 5 12 25 Chartered vessels with a duration of more than 13 months 1 4 21.5 18 12 56.5 Total active core fleet 1 8 2
Slide 30: Product tanker fleet overview
PRODUCT TANKER FLEET OVERVIEW NORDEN’s Tanker fleet and values at 31 March 2016 Vessel type LR1 MR Handysize Total Vessels in operation Owned vessels 0 9 13 22 Chartered vessels with a duration of more than 13 months 0 16 0 16 Total active core fleet 0 25 13 38 Chartered vessels with a duration of l
Slide 31: Dry Cargo
DRY CARGO NORDEN – FIRST QUARTER OF 2016 RESULTS | 31 Our business is global tramp shipping
Slide 32: Product Tankers
PRODUCT TANKERS NORDEN – FIRST QUARTER OF 2016 RESULTS | 32 Our business is global tramp shipping
Slide 33: The share (DNORD)
THE SHARE (DNORD) Master data Composition of shareholders 15,895 registered shareholders owning Shareholder capital DKK 42,200,000 88.3% Number of shares and Approx. 30.5% international ownership denomination 42,200,000 shares of DKK 1 Classes of shares 1 Voting and ownership restrictions None A