Dampskibsselskabet Norden A/s · OMXCOP:DNORD
Dampskibsselskabet Norden A/s — Q1 2019 Earnings Presentation
32 slides from Dampskibsselskabet Norden A/s's earnings presentation, May 7, 2019
Slide 1: Q1 results presentation
PRESENTATION Q1 results Copenhagen, Denmark 7 May 2019 1 | Q1 REPORT 2019 CUSTODIANS OF SMARTER GLOBAL TRADE
Slide 2: Agenda
AGENDA • Business update • Dry Operator – Q1 2019 update • Dry Owner – Q1 2019 update – Market outlook • Tankers – Q1 2019 update – Market outlook “In addition to the agile • Final words management of cyclical exposure to shipping industry, NORDEN also delivers additional value through operator acti
Slide 3: Business update
Business update 3 | Q1 REPORT 2019 CUSTODIANS OF SMARTER GLOBAL TRADE
Slide 4: Business update - overall: strong performance in tankers
BUSINESS UPDATE - OVERALL STRONG PERFORMANCE IN TANKERS – WEATHERED THE STORM IN DRY CARGO Financial highlights Quarterly results • Q1 2019 Adjusted Result USD 7 million 20 – Dry Operator USD -3 million in a market that went through an event driven collapse 15 – Dry Owner USD 0 million by high cover
Slide 5: Guidance maintained – business units adjusted
BUSINESS UPDATE - GUIDANCE GUIDANCE MAINTAINED – BUSINESS UNITS ADJUSTED Guidance – Adjusted result Guidance 70 Tankers adjusted to USD 15 to 30 million (previously USD 5 to 20 million). 60 • NORDENs performance in a strong winter market has created a strong Q1 result 50 40 25 to 60 Dry Operator adj
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) 390 Dry Cargo (+/-1,000USD* = USD 15 mill.) Adjusted Result last 4 quarters (USD million) 24 16,000 Capacity Cover Tanker Vessels (
Slide 7: Dry Operator
Dry Operator 7 | Q1 REPORT 2019 CUSTODIANS OF SMARTER GLOBAL TRADE
Slide 8: Weathering the storm
BUSINESS UPDATE – Q1 2019 DRY OPERATOR WEATHERING THE STORM • Q1 2019 Adjusted Result of USD -3 million despite a swift response to the market crash • Market crashed partly due to Vale dam disaster • New office in Abidjan, Ivory Coast • Strengthening of Research and Risk management to support the fr
Slide 9: Dry Owner
Dry Owner 9 | Q1 REPORT 2019 CUSTODIANS OF SMARTER GLOBAL TRADE
Slide 10: High coverage in a depressed market
BUSINESS UPDATE – Q1 2019 DRY OWNER HIGH COVERAGE IN A DEPRESSED MARKET • Q1 2019 Adjusted Result of USD 0 million – high cover • Increasingly asset light; 4 vessels was sold during the quarter with delivery to new owners in Q2 2019 • 2 Panamax vessels (17 years), 1 Supramax, (12 years) and 1 Handys
Slide 11: Collapse in dry cargo market
MARKET REVIEW – DRY CARGO Q1 2019 COLLAPSE IN DRY CARGO MARKET Key developments Baltic Dry Index 2,000 • Lower rates than in Q1 2019 1,500 – Panamax average earnings down 39% compared to Q1 2018 1,000 - 32 % – Supramax average earnings down 26% compared 500 to Q1 2018 0 Jun-17 Nov-17 Dec-17 Jun-18 N
Slide 12: Lack of demand growth in 2019
MARKET REVIEW – DRY CARGO OUTLOOK LACK OF DEMAND GROWTH IN 2019 • 2019 average market rates expected to be lower than 2018 but improvements expected in second half of the year • The Vale accident will continue to dominate overall trade volumes and especially tonne-miles • Global economy looks to be
Slide 13: Tankers
Tankers 13 | Q1 REPORT 2019 CUSTODIANS OF SMARTER GLOBAL TRADE
Slide 14: Strong winter market
BUSINESS UPDATE – Q1 2019 TANKERS STRONG WINTER MARKET • Q1 2019 Adjusted Result of USD 10 million in strong winter market • Continued expansion of tanker capacity – Selling 1 aging Handysize tanker vessel with a 2-year charter-back clause – Adding a total of 2,412 days through short-term charters b
Slide 15: Rates held up throughout winter
MARKET REVIEW – TANKERS Q1 2019 RATES HELD UP THROUGHOUT WINTER • After a strong winter market, rates have since declined but remain at higher levels than in 2018 • Key drivers of improvements – Lower dirty to clean switching in a strong crude market – Reduced stock draws – Regional congestions limi
Slide 16: Improvements still expected
MARKET REVIEW – TANKERS OUTLOOK IMPROVEMENTS STILL EXPECTED • MR rates are expected to remain suppressed until after summer – Destocking expected in 2019 due to OPEC cuts, outages in Venezuela and no new export waivers for Iran • Considerable market improvements expected towards the end of 2019 – Re
Slide 17: Final words
Final words 17 | Q1 REPORT 2019 CUSTODIANS OF SMARTER GLOBAL TRADE
Slide 18: So much more than just owned vessels
FINAL WORDS SO MUCH MORE THAN JUST OWNED VESSELS • 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 weathered the storm in Q1 • Reduced exposure to Dry Cargo market • Significant open po
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 | Q1 REPORT 2019 CUSTODIANS OF SMARTER GLOBAL TRADE
Slide 21: Back-up slides
Back-up slides 21 | Q1 REPORT 2019 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: USD 3.3 million reduction in adjusted profit from IFRS 16
USD 3.3 MILLION REDUCTION IN ADJUSTED PROFIT FROM IFRS 16 • IFRS 16 negatively impacts NORDEN’s result by IFRS 16 effect on profit/loss for the first quarter of 2019 USD 3 million USD million Including IFRS 16 Excluding IFRS 16 Change – The charter hire is distributed between operating Revenue 653.0
Slide 25: IFRS effect on business units
IFRS 16 EFFECT ON BUSINESS UNITS USD million Dry Operator Dry Owner Tankers Eliminations Total Charter hire 2.3 11.9 9.6 0.0 23.9 EBITDA 2.3 12.9 9.6 0.0 24.9 Depreciation, amortization and -2.3 -11.7 -9.4 0.0 -23.4 impairment loss EBIT 0 1.3 0.2 0.0 1.5 Financial expenses -0.2 -3.2 -1.4 0.0 -4.8 Ad
Slide 26: Dry Owner portfolio
NORDEN DNA DRY OWNER PORTFOLIO Owned Fleet Charateristics Current To be delivered • Portfolio primarily consists of Supramax and Panamax vessels 2 • Large portfolio of long-term charters from Japan with significant optionality incl. purchase options • Cover portfolio based on cargo contracts with ma
Slide 27: 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 28: Capital structure – 53% equity share
CAPITAL STRUCTURE – 53% EQUITY SHARE Capital structure Net committed cash (ultimo) • Cash in low-risk deposit USDm Q1 2019 Q4 2018 Q3 2018 Q2 2018 Q1 2018 accounts and securities Adjusted net interest bearing -179 -176 -99 -101 -69 assets* • Outstanding yard payments Payments for newbuilding less an
Slide 29: NORDEN scrubber installation schedule
NORDEN SCRUBBER INSTALLATION SCHEDULE Owned vessel scrubber installation schedule • 22 scrubber installation on own vessels 10 8 – Capex of approximately USD 44 million 6 7 7 4 • 14 firm scrubbers on long term time 2 1 1 1 1 1 1 1 1 0 charters Q1 2019 Q2 2019 Q3 2019 Q4 2019 Q1 2020 Q2 2020 Q3 2020
Slide 30: Dry Owner positioning
31 MARCH 2019 DRY OWNER POSITIONING Capacity and coverage in cash, Dry Owner, at 31 March 2019 Q2 Q3 Q4 2019 2020 2021 Q2 Q3 Q4 2019 2020 2021 Own vessels Ship days Panamax 135 180 183 506 726 697 Supramax 846 665 795 2,327 3,488 3,974 Handysize 332 273 273 886 1,089 1,069 Total 1,313 1,118 1,252 3,
Slide 31: Tanker positioning
31 MARCH 2019 TANKER POSITIONING Capacity and coverage in cash, Tanker, at 31 March 2019 Q2 Q3 Q4 2019 2020 2021 Q2 Q3 Q4 2019 2020 2021 Own vessels Ship days MR 1,331 1,407 1,437 4,174 5,756 5,796 Handysize 741 722 732 2,194 2,904 2,859 Total 2,072 2,128 2,168 6,368 8,660 8,655 Chartered vessels Ca
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
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