Dampskibsselskabet Norden A/s · OMXCOP:DNORD
Dampskibsselskabet Norden A/s — FY2018 Earnings Presentation
32 slides from Dampskibsselskabet Norden A/s's earnings presentation, Mar 5, 2019
Slide 1: Annual Report 2018 – Custodians of Smarter Global Trade
Copenhagen, Denmark 5 Marts 2019 1 | ANNUAL REPORT 2018 CUSTODIANS OF SMARTER GLOBAL TRADE
Slide 2: Agenda
AGENDA • Business update • Dry Operator – 2018 update • Dry Owner – 2018 update – Market outlook • Tankers – 2018 update – Market outlook “In addition to the agile • Final words management of cyclical exposure to shipping industry, NORDEN also delivers additional value through operator activities –
Slide 3: Business update
Business update 3 | ANNUAL REPORT 2018 CUSTODIANS OF SMARTER GLOBAL TRADE
Slide 4: Positive annual result – strong finish in 2018
BUSINESS UPDATE - OVERALL POSITIVE ANNUAL RESULT - STRONG FINISH IN 2018 Financial highlights Annual results • Full year Adjusted Result USD 20 million 100 28 20 – Dry Operator USD 30 million by capturing value in 0 volatile markets USD million -100 -35 – Dry Owner USD 18 million by benefitting from
Slide 5: Adjusted result for 2019: USD 25 to 60 million
BUSINESS UPDATE - GUIDANCE ADJUSTED RESULT FOR 2019: USD 25 TO 60 MILLION Guidance – Adjusted result Guidance 70 • Based on improved market conditions in tanker market and performance in line with 2018 in Dry 60 Operator and Dry Owner • In Dry Operator the platform continues to be 50 improved with a
Slide 6: Significant value beyond asset values
BUSINESS UPDATE – VALUATION OF NORDEN SIGNIFICANT VALUE BEYOND ASSET VALUES Owned Assets NAV Value of TC/cover portfolio Value of Dry Operator Dry Cargo Vessels (ex CP) 415 Dry Cargo (+/-1,000USD* = USD 12 mill.) Adjusted Result last 4 quarters (USD million) 30 16,000 Capacity Cover Tanker Vessels (
Slide 7: Dry Operator
Dry Operator 7 | ANNUAL REPORT 2018 CUSTODIANS OF SMARTER GLOBAL TRADE
Slide 8: Capturing value in volatile markets
BUSINESS UPDATE – 2018 DRY OPERATOR CAPTURING VALUE IN VOLATILE MARKETS • Delivered strong financial result and continued to fine-tune platform for future profitable growth • Strong result in Q4 despite lower than anticipated market rates – proves the strength and potential of the Dry Operator busin
Slide 9: Dry Owner
Dry Owner 9 | ANNUAL REPORT 2018 CUSTODIANS OF SMARTER GLOBAL TRADE
Slide 10: Reduced exposure to dry cargo markets
BUSINESS UPDATE – 2018 DRY OWNER REDUCED EXPOSURE TO DRY CARGO MARKETS • 2018 Adjusted Result of USD 18 million - benefitting from a healthy market and good coverage • Utilized the market to reduce forward exposure significantly for the next couple of years • Focused on increasing the optionality of
Slide 11: Healthy dry cargo market during 2018
MARKET REVIEW – DRY CARGO 2018 HEALTHY DRY CARGO MARKET DURING 2018 Key developments Baltic Dry Index 2,000 • Baltic Dry Index improved by 4% compared to 2017 1,500 • Despite overall less seasonality in rates in 1,000 2018, the market still offered considerable 500 volatility with significant region
Slide 12: Slower growth expected in 2019
MARKET REVIEW – DRY CARGO OUTLOOK SLOWER GROWTH EXPECTED IN 2019 • Uncertainties in demand outlook - primarily centered around China, where general activity levels are slowing down • Supply growth of 2-3% in 2019 – Deliveries expected to be 3-4% of current fleet – Scrapping expected to increase in t
Slide 13: Tankers
Tankers 13 | ANNUAL REPORT 2018 CUSTODIANS OF SMARTER GLOBAL TRADE
Slide 14: Increased exposure
BUSINESS UPDATE – 2018 TANKERS INCREASED EXPOSURE • 2018 Adjusted Result of USD -28 million in a historically poor market in the first 3 quarters of 2018 • Continued expansion of tanker exposure – Purchase of 4 secondhand MR vessels – Selling 1 aging Handysize tanker – Increase in both short- and lo
Slide 15: 2018 was a very challenging year
MARKET REVIEW – TANKERS 2018 2018 WAS A VERY CHALLENGING YEAR • Rates were at levels significantly lower than the last 5 years – however strong rebound in Q4 • Global oil demand grew at healthy pace, but demand met by draws from inventories • Overall tanker fleet grew by 1.4% – Deliveries continued
Slide 16: Stronger market expected in 2019 than 2018
MARKET REVIEW – TANKERS 2018 STRONGER MARKET EXPECTED IN 2019 THAN 2018 • Tanker markets are at a much healthier starting point in 2019 than in 2018 – Inventory levels have declined – Pace of deliveries from the yards has slowed down • But renewed pressure on rates in Q2 when the usual seasonal supp
Slide 17: Final words
Final words 17 | ANNUAL REPORT 2018 CUSTODIANS OF SMARTER GLOBAL TRADE
Slide 18: Proven track record of Dry Operator
FINAL WORDS PROVEN TRACK RECORD OF DRY OPERATOR • True value of NORDEN is more than the market value of owned vessels • Increasing asset light business and less dependent on long term market cycles • Dry Operator generated the highest quarterly result despite a disappointing Dry Cargo market • Reduc
Slide 19: Forward looking statements
DISCLAIMER 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 2019 and subsequent years are subject to uncertainty, and NORDEN’s actual r
Slide 20: Thank you for your attention
THANK YOU FOR YOUR ATTENTION Dampskibsselskabet NORDEN A/S 52, Strandvejen DK-2900 Hellerup Denmark Phone: +45 3315 0451 www.ds-norden.com dampskibsselskabetnorden ds-norden ds_norden dsnorden ds_norden 20 | ANNUAL REPORT 2018 CUSTODIANS OF SMARTER GLOBAL TRADE
Slide 21: Back-up slides
Back-up slides 21 | ANNUAL REPORT 2018 CUSTODIANS OF SMARTER GLOBAL TRADE
Slide 22: Enabling smarter global trade
THE NORDEN DNA ENABLING SMARTER GLOBAL TRADE Characteristics Connecting the world • Active in Dry Cargo and Product Tankers – Cyclical exposure to market developments (~100 vessels) – Large scale independent operator activities (~300 vessels) • Agile portfolio management • Strong track record of mai
Slide 23: NORDEN's business units
NORDEN DNA NORDEN’S 3 BUSINESS UNITS Dry Operator Dry Owner Product Tankers Transport services and cyclical Global transport solutions to dry Cyclical market exposure to dry market exposure in product cargo customers cargo market tanker market Generate a margin by: Generate superior long-term return
Slide 24: Effect of IFRS 16
FINANCE EFFECT OF IFRS 16 • IFRS will have material impact on NORDEN’s capital structure – Off-balance operational leases of 1 year and over will be included in the balance sheet – Total equity will remain unchanged • Estimated effect of USD -14 on the 2019 on the net result from IFRS 16 – Income st
Slide 25: Dry Owner portfolio
NORDEN DNA DRY OWNER PORTFOLIO Owned Fleet Charateristics Current To be delivered • Portfolio primarily consists of Supramax and Panamax vessels • Large portfolio of long-term charters from Japan with 4 significant optionality incl. purchase options • Cover portfolio based on cargo contracts with ma
Slide 26: Tankers portfolio
NORDEN DNA TANKERS PORTFOLIO Owned Fleet Charateristics • MR and Handysize vessels • Primarily own technical management • Portfolio of 41 chartered in vessels 15 • All short-term chartering-out conducted via Norient Product 9 Pool (NPP) of which NORDEN owns 100% • Long track record of earnings beati
Slide 27: Capital structure – 54% equity share
CAPITAL STRUCTURE – 54% EQUITY SHARE Capital structure Net committed cash (ultimo) • Cash in low-risk deposit USDm End 2018 End 2017 End 2016 accounts and securities Adjusted net interest bearing assets* -176 -59 12 • Outstanding yard payments Payments for newbuilding less proceeds from -73 -149 -16
Slide 28: NORDEN scrubber overview
NORDEN SCRUBBER OVERVIEW Estimated time of installation Q1 2019 Q2 2019 Q3 2019 Q4 2019 Q1 2020 Q2 2020 Q3 2020 Q4 2020 KAMSARMAX 82K I (5y TC) X NORDEN has secured 26 Panamax KAMSARMAX 82K II (5y TC) X scrubbers with installation Nord Summit X Nord Manatee X during 2019 and 2020 NORD COPPER X – The
Slide 29: NORDEN transport 2018
NORDEN TRANSPORT 2018 Dry Cargo - commodity Dry Cargo – load country 100% 100% 7% 90% 11% 90% 21% 80% 11% 80% 9% 70% 70% 12% 60% 60% 35% 50% 50% 15% 40% 40% 18% 30% 30% 20% 37% 20% 10% 10% 26% 0% 0% COAL AGRICULTURA PRODUCTS FERTILIZERS OTHER CEMENT/CLINKER SEA - Australia EC South America USEC - US
Slide 30: Dry Owner positioning
31 DECEMBER 2018 DRY OWNER POSITIONING 30 | ANNUAL REPORT 2018 CUSTODIANS OF SMARTER GLOBAL TRADE
Slide 31: Tanker positioning
31 DECEMBER 2018 TANKER POSITIONING 31 | ANNUAL REPORT 2018 CUSTODIANS OF SMARTER GLOBAL TRADE
Slide 32: The share (DNORD)
THE SHARE (DNORD) Master data Composition of shareholders Shareholder capital DKK 42,200,000 • 15.835 registered shareholders owning Number of shares and 91.8% denomination 42,200,000 shares of DKK 1 • Approx. 25.7% international ownership Classes of shares 1 Voting and ownership A/S Motortramp, 8.2
Dampskibsselskabet NORDEN — FY2018 Earnings Presentation on 6ix