Dampskibsselskabet Norden A/s · OMXCOP:DNORD
Dampskibsselskabet Norden A/s — Norden — Q3 2017 Earnings Presentation
35 slides from Dampskibsselskabet Norden A/s's earnings presentation, Nov 9, 2017
Slide 1: NORDEN Results Third quarter of 2017
NORDEN RESULTS Third quarter of 2017 Hellerup, Denmark 9 November 2017 1 | NORDEN THIRD QUARTER OF 2017 CUSTODIANS OF SMARTER GLOBAL TRADE
Slide 2: Q3 Highlights: Raising Full Year Guidance
Q3 HIGHLIGHTS RAISING FULL YEAR GUIDANCE Adjusted Results • Adjusted result for Q3 USD 4 million 5 4 – Improving dry cargo markets 1 0 – Still challenging tanker markets USD million -5 -3 • Dry Cargo split into 2 distinct business units -10 – Important step in NORDEN’s ambitious -12 -15 -14 plan to
Slide 3: Positive Dry Cargo Result
FINANCIALS POSITIVE DRY CARGO RESULT Adjusted result – Dry Cargo Adjusted result - Tanker 6 14 5 4 12 10 2 10 0 8 -2 6 USD million USD million -4 4 3 -6 2 -8 -7 0 -8 -10 -9 -2 -1 -1 -12 -4 -4 -14 -13 -6 Q3 2016 Q4 2016 Q1 2017 Q2 2017 Q3 2017 Q3 2016 Q4 2016 Q1 2017 Q2 2017 Q3 2017 3 | NORDEN THIRD
Slide 4: Split into Two Separate Business Units
STRATEGY SPLIT INTO TWO SEPERATE BUSINESS UNITS DRY DRY OPERATOR OWNER • Trading in focus • Ownership and long-term contracts • Short-term perspective • Long-term perspective • Customer focus • Utilising cyclical nature of market 4 | NORDEN THIRD QUARTER OF 2017 CUSTODIANS OF SMARTER GLOBAL TRADE
Slide 5: Dry Cargo Split: Transformation Well Under Way
DRY CARGO SPLIT TRANSFORMATION WELL UNDER WAY Going forward - 2 business units in Dry Cargo long-term TC-in and COAs Net open capacity transfered at Short-term trading DRY market rates DRY OWNER In 2018 the net capacity is around 35 vessels OPERATOR Owned, Development of Dry Operator Q1 2018 Strateg
Slide 6: First Results in Dry Cargo Split
DRY CARGO SPLIT FIRST RESULTS IN Dry Operator well positioned in improving markets Dry Owner delivering valuable cover • Vessels positioned to improving markets • Market improvements in Q4 • Valuable addition from long-term cover • Added optional capacity • Asset values +4% Dry Operator Dry Owner Co
Slide 7: Normalising Cash Position
FINANCIALS NORMALISING CASH POSITION Cover for outstanding payments • NORDEN is gradually allowing cash 600 position to normalise as expensive 500 285 charter and newbuilding commitments USD million 400 250 250 300 250 225 are paid off 200 294 264 264 249 100 191 205 0 • Net commitments increased by
Slide 8: Stable Asset Values
ASSET VALUES STABLE ASSET VALUES • Asset values for Dry Cargo and Tanker have remained stable during the quarter • Upward pressure on Dry Cargo values going into Q4 • Value of owned fleet is 54/46 between Dry Cargo and Tankers 5 – year secondhand prices Broker assessed asset values end Q3 201 30 25
Slide 9: Dry Cargo: Broad Based Market Improvements
DRY CARGO BROAD BASED MARKET IMPROVEMENTS • 4.5% demand growth YTD and 2.7% for Q3 2017 compared to last year • China continues to be the biggest driver of growth – but no longer the only one – Improving macro economy finally driving growth in ”Rest of World” • Global rebound in Coal trade in 2017 •
Slide 10: Low Supply Growth Supporting Outlook
DRY CARGO LOW SUPPLY GROWTH SUPPORTING OUTLOOK Dry Cargo supply (million dwt.) • Low supply growth 2018 and 2019 120 20% enables continued market improvement 15% 90 15% 11% • Demand growth in 2018 lower than 60 10% in 2017, due to lower Chinese 5.7% 4.4% activity levels 30 3.3% 5% 2.4% 2.3% 1.3% 1.6
Slide 11: Tankers: Market Conditions Still Challenging
TANKERS MARKET CONDITIONS STILL CHALLENGING Spot market MR (CPP) earnings (USD/day) • High fleet growth and low 20,000 demand growth in 2017 15,000 10,000 5,000 • High level of inventories 0 Jul-16 reducing short-term effect from Jul-17 Jun-16 Jun-17 Apr-16 May-16 Nov-16 Apr-17 May-17 Jan-16 Feb-16
Slide 12: Improving Outlook for 2018
TANKERS IMPROVING OUTLOOK FOR 2018 • Positive macro environment adding to demand upside • Demand for oil expected to grow 1.4% in 2018 • Oil inventories normalizing faster than expected • Fleet growth slowing European Distillate stocks (mBBL) US Total Gasoline Stocks (mBBL) Tanker fleet growth 480 8
Slide 13: NORDEN Raises Expectations for 2017
2017 FULL YEAR GUIDANCE NORDEN RAISES EXPECTATIONS FOR 2017 Outlook and comments USDm Dry Cargo Tankers Total Adjusted result -10 to 15 0 to 15 -10 to 30 for the year • Adjusted net result USD -10 to 30 million - previously USD -20 to 20 million • Dry Cargo well positioned to benefit from improving
Slide 14: 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 2017 and subsequent years are subject to uncertainty, and NORDEN’s actual r
Slide 15: 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 15 | NORDEN THIRD QUARTER OF 2017 CUSTODIANS OF SMARTER GLOBAL TRADE
Slide 16: Back-up slides
Back-up slides 16 | NORDEN THIRD QUARTER OF 2017 CUSTODIANS OF SMARTER GLOBAL TRADE
Slide 17: What Makes NORDEN Different?
WHAT MAKES NORDEN DIFFERENT? • 2 segments – focus on vessel types where we can make a difference – Dry Cargo – Tankers • Full scale operational setup – direct customer contact • Portfolio of time charter in contracts and earnings coverage • Long track record of overperformance in Dry Cargo and Tanke
Slide 18: A Leading Global Tramp Operator
A LEADING GLOBAL TRAMP OPERATOR 71 Dry Cargo vessels (core fleet) Panamax (25.5) Supramax (26.5) Post-Panamax (4) Handysize (15) • Modern fleet • Global network of offices and port captains • Pools in Dry cargo (Handysize & Post- Panamax) and Tankers (MR & Handysize) 36.5 Tanker vessels MR (21.5) Ha
Slide 19: Development Highlights
DEVELOPMENT HIGHLIGHTS 2015- 300 Strategy: Focus & Simplicity Offices in Melbourne and Santiago 275 2005 2008 Norient Financial 1871 Product Pool crisis begins 250 Mads C. Holm founds NORDEN; first vessel delivered in 1872 225 1996-2005 Offices in Singapore, Annapolis, Shanghai, 200 Rio de Janeiro a
Slide 20: 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 CORE FLEET Capacity Employment • Sale and purchase • Customer relations • Technical competencies in-house Owned
Slide 21: Enabling Value Creation: Why We Succeed
BASED ON THE CYCLE AND THROUGHOUT THE CYCLE ENABLING VALUE CREATION 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 operati
Slide 22: Overall Results
OVERALL RESULTS USDm Q3 2016 Q4 2016 Q1 2017 Q2 2017 Q3 2017 EBITDA – Dry Cargo -1.9 -4.0 -6.3 -2.6 5.5 EBITDA - Tankers 6.0 8.0 16.6 10.0 6.5 EBITDA - Group 4.1 2.9 10.3 7.4 12.0 Depreciation -11.6 -10.8 -10.6 -10.2 -10.4 EBIT Group -12.9 -16.3 0.1 -2.8 -2.2 Result for the period -14.1 -12.1 0.7 -3
Slide 23: Financial Strength
FINANCIAL STRENGTH Capital structure Net commited cash (ultimo) • Cash in low-risk deposit USDm Q3 2017 Q2 2017 Q1 2017 Q4 2016 Q3 2016 accounts and securities Adjusted net interest -69 -9 12 12 6 bearing assets* • Outstanding yard payments T/C obligations ** -1,267 -1,229 -1,202 -1,143 -1,201 (incl
Slide 24: Continuously Outperforming the Markets
PERFORMANCE CONTINUOUSLY OUTPERFORMING THE MARKETS Tankers – 4 quarter rolling NORDEN TCE over benchmark 6,000 4,000 2,000 0 -2,000 Q3 2015 Q4 2015 Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017 Q2 2017 Q3 2017 Handy MR Dry Cargo – 4 quarter rolling NORDEN TCE over benchmark Panamax Supramax 5,000 4,000 3,
Slide 25: NORDEN TCE Dry Cargo
NORDEN TCE DRY CARGO Q3 2016 Q4 2016 Q1 2017 Q2 2017 Q3 2017 Core days 658 397 359 364 368 Post-Panamax TCE 8,446 9,479 9,428 11,539 9,304 Core days 2,706 2,779 2,855 2,835 2,856 Panamax TCE 7,413 8,407 7,299 7,897 9,899 Core days 2,547 2,646 2,803 2,822 2,677 Supramax TCE 7,165 7,971 7,074 7,717 9,
Slide 26: Classic TCE Dry Cargo
CLASSIC TCE DRY CARGO Q3 2016 Q4 2016 Q1 2017 Q2 2017 Q3 2017 Fleet days 658 397 567 386 406 Post-Panamax TCE 7,731 8,465 8,492 10,441 12,040 Fleet days 7,405 7,806 8,755 8,576 9,005 Panamax TCE 6,918 7,824 7,612 9,647 9,698 Fleet days 6,083 6,368 7,448 7,578 9,103 Supramax TCE 7,940 8,775 8,876 10,
Slide 27: Dry Cargo Capacity
30 SEPTEMBER 2017 DRY CARGO CAPACITY 27 | NORDEN THIRD QUARTER OF 2017 CUSTODIANS OF SMARTER GLOBAL TRADE
Slide 28: Dry Cargo Coverage
30 SEPTEMBER 2017 DRY CARGO COVERAGE 28 | NORDEN THIRD QUARTER OF 2017 CUSTODIANS OF SMARTER GLOBAL TRADE
Slide 29: Tanker Capacity and Coverage
30 SEPTEMBER 2017 TANKER CAPACITY AND COVERAGE 29 | NORDEN THIRD QUARTER OF 2017 CUSTODIANS OF SMARTER GLOBAL TRADE
Slide 30: Dry Cargo Fleet Overview
30 SEPTEMBER 2017 DRY CARGO FLEET OVERVIEW 30 | NORDEN THIRD QUARTER OF 2017 CUSTODIANS OF SMARTER GLOBAL TRADE
Slide 31: Product Tanker Fleet Overview
30 SEPTEMBER 2017 PRODUCT TANKER FLEET OVERVIEW 31 | NORDEN THIRD QUARTER OF 2017 CUSTODIANS OF SMARTER GLOBAL TRADE
Slide 32: Fleet Values
30 SEPTEMBER 2017 FLEET VALUES 32 | NORDEN THIRD QUARTER OF 2017 CUSTODIANS OF SMARTER GLOBAL TRADE
Slide 33: Newbuilding Prices
Million USD 0 20 30 40 50 10 60 1976-Jan 1978-Jan 1980-Jan Panamax (Dry) 1982-Jan 1984-Jan 1986-Jan 33 | NORDEN THIRD QUARTER OF 2017 1988-Jan 1990-Jan 1992-Jan 1994-Jan 1996-Jan 1998-Jan 2000-Jan NEWBUILDING PRICES 2002-Jan 2004-Jan 2006-Jan 2008-Jan 2010-Jan 2012-Jan 2014-Jan 2016-Jan Million USD
Slide 34: Supramax Spot Rate
SUPRAMAX Spot rate 14,000 12,000 10,000 8,000 USD/day 6,000 4,000 2,000 0 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 2015 2016 2017 * Source: Clarksons 34 | NORDEN THIRD QUARTER OF 2017 CUSTODIANS OF SMARTER GLOBAL TRADE
Slide 35: The Share (DNORD)
THE SHARE (DNORD) Master data Composition of shareholders Shareholder capital DKK 42,200,000 • 15,895 registered shareholders owning Number of shares and 88.3% denomination 42,200,000 shares of DKK 1 • Approx. 31% international ownership Classes of shares 1 10.6% Voting and ownership A/S Motortramp,