Odfjell SE Class A · OSL:ODF
Odfjell SE Class A — Q4 2014 Earnings Presentation
31 slides from Odfjell SE Class A's earnings presentation, Feb 12, 2015
Slide 1: Fourth Quarter / Preliminary Full Year 2014 Results
Fourth Quarter / Preliminary Full Year 2014 Results Oslo – 12 February 2015 1
Slide 2: Agenda
Agenda • Highlights • Financials • Operational review • Project Felix • Market update and prospects 2
Slide 3: Highlights
Highlights Highlights • Chemical Tankers EBITDA of USD 30 million, compared with USD 26 million in third quarter • Odfjell chemical freight index (ODFIX) up more than 10% compared with last quarter • Time-charter result down 6% due to bunker hedging ODFIX EBITDA¹ 200 350 300 Index 1990=100 150 250 2
Slide 4: Highlights
Highlights Highlights • Odfjell Terminals EBITDA of USD 2 million compared with USD 4 million in third quarter • Initiated cost-cutting and efficiency programme estimated to improve the net result by in excess of USD 100 million on a yearly basis when fully implemented within the end of 2016 Deliver
Slide 5: Income statement - Fourth quarter 2014
Financials Income statement¹ - Fourth quarter 2014 USD mill 4Q14 3Q14 Gross revenue 245 267 Voyage expenses (116) (123) TC expenses (41) (47) Operating expenses (40) (44) Share of net result from associates and JV (5) (8) General and administrative expenses (18) (24) Operating result before depr. (E
Slide 6: Income statement - Preliminary full year 2014
Financials Income statement¹ - Preliminary full year 2014 USD mill 2014 2013 Gross revenue 1 053 1 027 Voyage expenses (496) (489) TC expenses (191) (164) Operating expenses (175) (189) Share of net result from associates and JV (32) (52) General and administrative expenses (93) (93) Operating resul
Slide 7: Quarterly figures
Financials Quarterly figures¹ USD mill EBITDA Gross Revenue 45 350 40 300 35 250 30 USD mill USD mill 200 25 150 20 15 100 10 50 5 0 0 2012 2013 2014 2012 2013 2014 • Stable gross revenue • EBITDA improvement continues, USD 34 million in 4Q14 compared to USD 31 million in 3Q14 ¹ Proportional consoli
Slide 8: Quarterly figures
Financials Quarterly figures USD mill Operating Result (EBIT)¹ 40 23 20 11 8 • Other financial items negative USD 10 million 5 5 0 -20 ‐5 ‐6 related to unrealized loss on derivatives not treated USD mill ‐15 ‐15 -40 ‐25 ‐23 as hedge accounting -60 • Net interest includes prior periods adjustments of
Slide 9: Results per segment
Financials Results per segment¹ 4Q14 EBITDA¹ 100% 350 90% 300 80% 70% 250 60% 200 USD mill 50% 150 40% 100 30% 50 20% 10% 0 -50 05 06 07 08 09 10 11 12 13 14 0% Gross revenue EBITDA Assets Chemical tankers Tank terminals LPG/Ethylene Chemical tankers Tank terminals LPG/Ethylene 4Q14 3Q14 Chemical Ta
Slide 10: Income statement - 4Q14 chemical tankers
Financials Income statement¹ – 4Q14 chemical tankers USD mill 4Q14 3Q14 Gross revenue 247 263 Voyage expenses (117) (122) TC expenses (41) (45) Operating expenses (40) (44) General and administrative expenses 2 (18) (25) Operating result before depr. (EBITDA) 30 26 Depreciation (21) (24) Impairment
Slide 11: Vessel operating expenses - chemical tankers
Financials Vessel operating expenses - chemical tankers 12,000 10,000 8,000 USD 6,000 4,000 2,000 0 05 06 07 08 09 10 11 12 13 14 USD / day, total USD/day, crew 11
Slide 12: Bunker development
Financials Bunker development Net Bunker Cost 80 70 67.7 71.6 65.3 63.0 61.3 16.6 60 2.7 50 40 USD mill 72.3 71.1 65.9 66.4 30 52.3 20 10 - (4.7) (4.2) (3.9) (3.2) (10) (1.1) (0.4) (0.7) (0.2) (20) (30) 4Q13 1Q14 2Q14 3Q14 4Q14 Bunker purchase Bunker clauses Bunker hedging Net bunker cost Platts 3.5
Slide 13: Income statement - 4Q14 tank terminals
Financials Income statement¹ – 4Q14 tank terminals USD mill 4Q14 3Q14 Gross revenue 24 23 Operating expenses (17) (14) General and administrative expenses (5) (5) Operating result before depr. (EBITDA) 2 4 Depreciation (9) (8) Impairment (reversal) 5 - Capital gain/(loss) 0 (1) Operating result (EBI
Slide 14: Tank terminals EBITDA - by geographical segment
Financials Tank terminals EBITDA – by geographical segment EBITDA 2014 20 14 14 9 10 0 • The tank terminal group delivered an EBITDA of USD USD mill -10 2 million in 4Q14 -20 • The results were in line with previous quarter -30 -40 ‐41 -50 Europe North Asia Middle East America EBITDA Tank Terminals
Slide 15: Balance sheet - 31.12.2014
Financials Balance sheet¹ – 31.12.2014 USD mill - Assets Equity and liabilities Ships and newbuilding contracts 1 284 Total equity 638 Other non-current assets/receivables 84 Non-current liabilities and derivatives 40 Investment in associates and JV’s 393 Non-current interest bearing debt 839 Total
Slide 16: Debt development - 31.12.2014
Financials Debt development – 31.12.2014 • Debt repayments due in 2015 will be refinanced and will contribute poitively to our cash holdings • A significant portion of the balloon repayment maturing late 2015 will be refinanced during first half of 2015 • NOK 600 million bond matures in December 201
Slide 17: Capital expenditure programme
Financials Capital expenditure programme In USD mill – per 31.12.2014 2015 2016 2017 2018 2019 Chemical Tankers, Odfjell share Hyundai Mipo, 2 x 46,000 dwt1) 28 Docking 20 18 17 17 17 Odfjell Gas, 100 % share2) Sinopacific, 4 x 17,000 cbm 90 63 Sinopacific, 4 x 22,000 cbm 25 84 70 Tank Terminals, 10
Slide 18: Terminal projects and expansions
Operational review Terminal projects and expansions • Odfjell Terminals (Charleston) will be at full occupancy in 1Q15, including a ship/store solution for one major customer • The new tank pit in Houston (Bay 10) is under construction with expected completion in 4Q 2015, adding 17,170 cbm of tank c
Slide 19: Tank terminal capacity
Operational review Tank terminal capacity Total capacity in CBM (incl. related parties): Current capacity 5,419,722 Ongoing expansions 479,570 1,800 1,600 1,400 1,200 Cubic Metres`000 1,000 800 600 400 200 0 Mineral oil storage Chemical storage Ongoing expansions * Odfjell’s ownership share in the r
Slide 20: Odfjell Terminals (Rotterdam) - current status
Operational review Odfjell Terminals (Rotterdam) – current status • EBITDA negative USD 7 million in 4Q14, Odfjell share • Re-organisation and subsequent staff reduction have improved the cost base • Commercial occupancy is 90% at the beginning of 2015 • Storage tanks supporting the PID distillation
Slide 21: Odfjell Gas Carriers
Operational review Odfjell Gas Carriers Stronger results from underlying operation in 4Q Positive contribution from continued long-haul activity Satisfactory utilisation USD mill 4Q14 3Q14 Gross revenue 4 7 EBITDA 1 1 EBIT 1 7 • Ownership share in 4Q14 is 50% compared to100% in 3Q14 • EBIT in
Slide 22: Fleet development - last 12 months
Operational review Fleet development - last 12 months Fleet additions DWT Built Tanks Transaction January 2015 Bow Triumph 49 600 2015 Coated Owned October 2014 Bow Trident 46 600 2014 Coated Owned August 2014 Kristin Knutsen 19 152 1998 Stainless Short-term TC June 2014 Bow Tribute 46 000 2014 Coat
Slide 23: Reducing cost and improving efficiency
Project Felix Reducing cost and improving efficiency • Announced 8 May 2014 a review of the business model in order to improve the financial result through a more competitive cost structure • In November 2014 we announced that immediate initiatives expected to effect the bottom line by USD 50 millio
Slide 24: Reducing cost and improving efficiency
Project Felix Reducing cost and improving efficiency • The cost savings initiatives are related to operating expenses, general and administrative expenses, trade optimisation and bunker consumption • Operating expenses and general and administrative expenses are expected to account for in excess of
Slide 25: Required profit improvement in excess of 100 MUSD
Project Felix Sustainable profitability in today's market implies a required profit improvement in excess of 100 MUSD Sufficient for fleet renewal and dividend capacity +50 -50 Net result G&A Opex OT profitability Bunker cost Potential net 2014F A B O C D result after improvements Implications: • Si
Slide 26: Project Felix implementation timeline
Project Felix Project Felix implementation timeline Aiming at realizing 88% of targeted improvements by end 2015 Targeted improvements “run rate” (% of total) % of total 100 % 100 88 % 90 81 % 79 % 80 % 81 % 80 75 % 69 % 70 60 % 61 % 54 % 60 43 % 50 34 % 40 30 20 10 0 Jan. Feb. Mar. Apr. May Jun. Ju
Slide 27: Market update - chemical tankers
Market update and prospects Market update – chemical tankers • Activity and nominations under CoAs were stable in most areas • ODFIX index up by more than 10% • Time-charter result down 6% due to bunker hedging • Spot trading in general was slow • A strong clean market has removed some swing tonnage
Slide 28: Core Chemical Deep-sea Fleet 2004-2018
Market update and prospects Core Chemical Deep-sea Fleet 2004-2018 Orderbook and estimated demolition per 31 January, 2015 % o f y e a r - s t a r t 5 f e 0 l e t ' 00 0 0 D w t 2 , 0 0 1 . % Average annual net growth: 2004-2014: 7.1% 1 , 6 0 0 1 2 . 0 % 2015-2018: 4.8% 1 , 2 0 0 9 . 0 % 8 0 0 6 . 0
Slide 29: Prospects
Market update and prospects Prospects • Modest growth in world GDP expected in 2015, one of the main factors affecting overall chemical tanker demand • The demand for chemical tanker services is firming going forward, with contracts of affreightment being renewed at somewhat improved terms • Althoug
Slide 30: Company representatives
Company representatives Tore Jakobsen – CEO, Odfjell SE Terje Iversen – CFO, Odfjell SE Email: Tore.Jakobsen@odfjell.com Email: Terje.Iversen@odfjell.com Phone: +47 908 49 190 Phone: +47 932 40 359 IR – contact: Tom A. Haugen – VP Finance, Odfjell SE Email: Tom.Haugen@odfjell.com Phone: +47 905 96 9
Slide 31: Thank you
Thank you For more information please visit our webpage at www.odfjell.com 31