Dampskibsselskabet Norden A/s · OMXCOP:DNORD

Dampskibsselskabet Norden A/s — Norden — Q1 2014 Earnings Presentation

28 slides from Dampskibsselskabet Norden A/s's earnings presentation, May 13, 2014

  1. Slide 1: NORDEN Results First quarter of 2014

    NORDEN RESULTS First quarter of 2014 Hellerup, Denmark 13 May 2014 NORDEN - First quarter of 2014 results | 1 Our business is global tramp shipping

  2. Slide 2: Agenda

    AGENDA  Group highlights  Financial  Dry Cargo  Tankers  2014 expectations  Q & A NORDEN - First quarter of 2014 results | 2 Our business is global tramp shipping

  3. Slide 3: Q1 Highlights

    Q1 HIGHLIGHTS EBITDA Key messages 20 19  EBITDA as expected USD -8 million 15  Seasonal decline in dry cargo rates 10 10 as expected Million USD 5 4  Disappointing MR market in Q1, but surprisingly strong Handysize market 0 in Tankers The seasonal decline in dry cargo Incl. non-recurring -5 incom

  4. Slide 4: Q1 in line with expectations

    FINANCIALS Q1 IN LINE WITH EXPECTATIONS  Group EBITDA of USD -8 million  Dry Cargo EBITDA of USD -15 million  Tanker EBITDA of USD 10 million  Positive cash flow from operations  Weak start to Q2 in both Dry Cargo and Tankers Dry Cargo EBITDA Tanker EBITDA 15 14 Incl. non- 10 10 recurring incom

  5. Slide 5: Continued improvement in asset values

    FINANCIALS CONTINUED IMPROVEMENT IN ASSET VALUES  Asset values have increased significantly since Q1 2013 – especially since Q3 2013  Change in estimate of the vessels’ useful life from 20 to 25 years  Positive Q1 effect on EBIT of USD 5 million  Full year 2014 impact on EBIT expected to be arou

  6. Slide 6: Q1 showed clear improvement over Q1 2013, but very poor start to Q2

    DRY CARGO Q1 SHOWED CLEAR IMPROVEMENT OVER Q1 2013, BUT VERY POOR START TO Q2  Average Baltic Dry Index up 72% Baltic Dry Index Y/Y primarily due to a good January 2,500 and a spike in Capesize  However, Q1 2013 was the worst 2,000 quarter in 27 year, so the improvement was ”on a cheap background”

  7. Slide 7: Current low rates driven by extraordinarily poor Atlantic market

    DRY CARGO CURRENT LOW RATES DRIVEN BY EXTRAORDINARILY POOR ATLANTIC MARKET  The beginning of Q2 has been worse than expected primarily due to an unusually low Atlantic market  Oversupply of tonnage in Atlantic region caused by  Indonesian export ban made more vessels than unusual ballast to Atlan

  8. Slide 8: Strong decline in FFA rates, but market improvement still expected in 2nd half 2014

    DRY CARGO STRONG DECLINE IN FFA RATES, BUT MARKET IMPROVEMENT STILL EXPECTED IN 2ND HALF 2014  The deteriation of spot rates has impacted the FFA-curve negatively since February  Inspite of recent decline, market improvement is still expected in the 2nd half of 2014  Despite recent economic data,

  9. Slide 9: MR rates disappointed in Q1

    TANKERS MR RATES DISAPPOINTED IN Q1  Dirty markets were extraordinarily high in January and February  MR Rates in Q1 2014 disappointed and were lower than Q1 2013  Weather effects prevented the usual seasonal increase in demand  Vegetable oil trade declined after many years of continued growth 

  10. Slide 10: Tankers outlook

    TANKERS OUTLOOK  MR market expected to pick up as US refinery maintenance declines  Continued low fleet growth in 2014  Ordering has declined considerably from the excessive levels in 2013 Fleet development 10 12% Million dwt. 11% 10% 8 9% 8% 6 7% 6% 5% 4 4% 3% 2 2% 1% 0 0% -1% -2% -2 -3% -4% -4

  11. Slide 11: Range for full year estimate lowered by USD 60 million

    RANGE FOR FULL YEAR ESTIMATE LOWERED BY USD 60 MILLION Outlook Comments USDm Dry Cargo Tankers Total  Guidance lowered due to poor Q2 and lower FFA rates in Dry EBITDA -50 to 0 20-70 -40 to 60 Cargo Profit from vessel sales 0  Dry Cargo  Q2-Q4 FFA rates has declined CAPEX 100-120 more than USD 2,

  12. Slide 12: 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 2014 and subsequent years are subject to uncertainty, and NORDEN’s actual results may therefore differ from the p

  13. Slide 13: Thank you for your attention

    Thank you for your attention Get mobile version of NORDEN’s website. Scan and add to home screen. Or go to m.ds-norden.com Dampskibsselskabet NORDEN A/S 52, Strandvejen DK-2900 Hellerup Denmark Phone: +45 3315 0451 www.ds-norden.com NORDEN - First quarter of 2014 results | 13 Our business is global

  14. Slide 14: Back up

    BACK UP NORDEN - First quarter of 2014 results | 14 Our business is global tramp shipping

  15. Slide 15: A leading global tramp operator

    A LEADING GLOBAL TRAMP OPERATOR Dry Cargo Capesize Post-Panamax Panamax Supramax Handysize 300 250 200 150 100 50 0 Dry cargo Tankers NORDEN vessels Pool vessels Tankers MR Handysize  Modern fleet  Global network of offices and port captains  Pools in Dry cargo (Handysize & Post-Panamax) and Tank

  16. Slide 16: 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  Significant asset upside through purchase options Flexible fleet Coverage and customer focus Capacity Employment  Sale and purchase  Customer relations Co

  17. Slide 17: 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 Creating value above industry level irrespective of adjusting our exposure market conditions Levers: Levers: Commercial operations

  18. Slide 18: Overall results

    OVERALL RESULTS USDm Q1 2013 Q4 2013 Q1 2014 Y/Y % Q/Q % Contribution margin 22 7 6 -71% -13% O/A Group -13 -15 -14 -13% 7% EBITDA 10 -8 -8 -180% 0% EBITDA Dry Cargo 1 -13 -15 -1,431% -11% EBITDA Tankers 11 8 10 -9% 22% Vessel sales 2 0 0 0% 0% Depreciation -19 -21 -15 -17% -25% EBIT -7 -28 -23 -226

  19. Slide 19: Last 5 years performance

    LAST 5 YEARS PERFORMANCE Earnings per share (USD) Return on equity 12.4% 12.9% 5.8 5.2 4.4% 2.1 -2.9% -1.2 -15.1% -6.8 2009 2010 2011 2012 2013 2009 2010 2011 2012 2013 Cash flows, operations and investments (USDm) Dividend yield 4.0% 298 7 3.3% 160 3.0% 120 122 -9 -80 -103 1.8% 1.8% -380 -355 2009

  20. Slide 20: Dry Cargo – Rates: decline in Q1 2014

    DRY CARGO – RATES DECLINE IN Q1 2014 Capesize Panamax Supramax & Handysize 18,000 18,000 45,000 16,000 16,000 40,000 14,000 14,000 35,000 12,000 12,000 30,000 10,000 10,000 25,000 8,000 8,000 20,000 6,000 6,000 4,000 15,000 4,000 2,000 10,000 2,000 0 5,000 Sep-13 Mar-13 Apr-13 Dec-13 Mar-14 Apr-14 O

  21. Slide 21: Declining supply growth

    DRY CARGO DECLINING SUPPLY GROWTH  Low net fleet growth in 2014 of around 4-6%  Improved markets can release shadow capacity, which can cap improvement but not prevent it  High ordering activity in 2013 likely to increase net fleet growth but not before 2016 Fleet development 100 20% 18% 80 16% 1

  22. Slide 22: Financial strength

    FINANCIAL STRENGTH Strong capital structure Net committed cash  Strong focus on cash flow USDm Q1 2014 Q1 2013 generation Adjusted net interest bearing 165 353 assets*  Cash in low-risk deposit T/C obligations** -1,839 -1,700 accounts and securities Newbuilding instalments less -451 -263 proceeds

  23. Slide 23: Fleet values

    FLEET VALUES Fleet values at 31 March 2014 USD million Broker estimated value Broker Carrying of owned estimated value Dry Cargo Number Average dwt. amount/cost vessels* of charter party Added value Capesize 3.0 176,000 71 100 29 Post-Panamax 4.0 115,000 124 129 5 Panamax 7.0 79,000 165 197 13 45 Su

  24. Slide 24: Dry Cargo fleet overview

    DRY CARGO FLEET OVERVIEW NORDEN’s Dry Cargo fleet and values at 31 March 2014 Vessel type Capesize Post-Panamax Panamax Supramax Handysize Total Vessels in operation Owned vessels 3.0 4.0 3.0 4.0 12.0 26.0 Chartered vessels with purchase option 1.0 4.0 10.0 16.0 11.0 42.0 Total active core fleet 4.0

  25. Slide 25: Tanker fleet overview

    TANKER FLEET OVERVIEW NORDEN’s Tanker fleet and values at 31 March 2014 Vessel type MR Handysize Total Vessels in operation Owned vessels 7.0 11.0 18.0 Chartered vessels with purchase option 8.0 - 8.0 Total active core fleet 15.0 11.0 26.0 Chartered vessels without purchase option 13.0 7.0 20.0 Tota

  26. Slide 26: Dry Cargo coverage and capacity

    DRY CARGO Coverage and capacity, Dry Cargo, at 31 March 2014 2014 2015 2016 2014 2015 2016 Q2 Q3 Q4 Q2 Q3 Q4 Owned vessels Ship days Capesize 273 264 276 1,080 1,083 Post-Panamax 364 368 343 1,440 1,444 Panamax 223 276 276 1,395 1,760 Supramax 364 363 368 1,982 2,888 Handysize 1,088 1,069 1,104 4,32

  27. Slide 27: Tankers capacity and coverage

    TANKERS Capacity and coverage, Tankers, at 31 March 2014 2014 2015 2016 2014 2015 2016 Q2 Q3 Q4 Q2 Q3 Q4 Owned vessels Ship days MR 627 644 644 3,776 3,971 Handysize 1,022 1,196 1,186 4,680 4,693 Total 1,649 1,840 1,830 8,456 8,664 Chartered vessels Costs for T/C capacity (USD per day) MR 1,891 1,62

  28. Slide 28: The share (DNORD)

    THE SHARE (DNORD) Master data Composition of shareholders  13,382 registered shareholders Shareholder capital DKK 43,000,000 owning 92.1% Number of shares and 43,000,000 shares of  Approx. 40% international denomination DKK 1 ownership Classes of shares 1 Voting and ownership restrictions None NAS

Norden — Q1 2014 Earnings Presentation on 6ix