Odfjell Se Class A · OSL:ODF
Odfjell Se Class A — Q3 2017 Earnings Presentation
23 slides from Odfjell Se Class A's earnings presentation, Nov 9, 2017
Slide 1: Third Quarter Presentation 2017
Third Quarter Presentation 2017 9 November 2017
Slide 2: Agenda
Agenda • Highlights • Financials • Operational review/Strategy • Market update and prospects
Slide 3: Highlights
Highlights Highlights Key figures, USD mill¹ • The challenging market for chemical tankers continued into 3Q as we had expected. The market for terminals (USD mill, 1Q17 2Q17 3Q17 3Q16 YTD17 YTD16 unaudited) was under pressure from falling forward prices of Odfjell Tankers 212.8 208.9 207.6 206.9 62
Slide 4: Agenda
Agenda • Highlights • Financials • Operational review/Strategy • Market update and prospects
Slide 5: Income statement - Odfjell Group
Financials Income statement¹ - Odfjell Group 2Q 3Q 2016 2017 USD mill 2017 2017 YTD YTD Gross revenue 238.5 236.7 729.5 718.2 Voyage expenses (79.5) (79.0) (206.2) (240.1) TC expenses (49.6) (48.3) (122.7) (145.9) Operating expenses (46.4) (49.9) (141.4) (141.3) General and administrative expenses (
Slide 6: Income statement - Odfjell Group by division
Financials Income statement¹ - Odfjell Group by division Key quarterly deviations: USD mill Tankers Terminals Total* 2Q17 3Q17 2Q17 3Q17 2Q17 3Q17 • Opex in Odfjell Tankers up on Gross revenue 208.9 207.6 27.5 27.0 238.5 236.7 three new vessels delivered to the fleet Voyage expenses (78.5) (78.0) -
Slide 7: Bunker development
Financials Bunker development Quarterly net bunker cost Platts 3.5% FOB Rotterdam USD mill 3Q 2016 - 3Q 2017 January 2013 - September 2017 USD per metric tonne 38.6 37.8 36.7 37.3 3.3 700 34.1 3.3 4.2 9.9 6.2 600 500 35.8 400 34.3 34.1 26.7 28.0 300 200 100 -0.1 -0.5 -0.3 -0.4 3Q16 4Q16 1Q17 2Q17 3Q
Slide 8: Balance sheet 30.09.2017 – Odfjell Group
Financials Balance sheet 30.09.2017 – Odfjell Group¹ Assets, USD mill 2Q 17 3Q 17 Equity and liabilities, USD mill 2Q 17 3Q 17 Ships and newbuilding contracts 1 250.3 1 329.0 Total equity 718.0 711.7 Investment in associates and JVs 335.2 339.9 Non-current liabilities and derivatives 35.0 19.8 Other
Slide 9: Financial ratios – Odfjell Group
Financials Financial ratios – Odfjell Group Equity method method Gross interest bearing debt / EBITDA Equity ratio 27.7x 37% 38% 37% 31% 33% 17.6x 8.5x 9.2x 4.8x 2013 2014 2015 2016 2017 YTD 2013 2014 2015 2016 3Q 2017 annualised Return on capital employed (ROCE)1 Return on equity (ROE) 8% 15% 2% 2%
Slide 10: Cash flow 30.09.2017 – Odfjell Group
Financials Cash flow 30.09.2017 – Odfjell Group¹ Cash flow, USD mill 1Q 17 2Q 17 3Q 17 YTD 17 Net profit 1.8 (5.3) (9.9) (13.4) Adjustments 18.7 3.0 32.1 53.8 Changes in working capital (3.4) 4.4 (14.6) (13.6) Other (10.9) 5.1 8.1 2.3 Cash flow from operating activities 6.2 7.1 15.7 29.0 Sale of non
Slide 11: Debt development – corporate and chemical tankers
Financials Debt development – corporate and chemical tankers 30.09.2017 Debt Portfolio, USD mill Debt Repayments, USD mill 300 1 500 1 250 250 1 000 200 750 500 150 250 100 0 -250 50 -500 0 2017 2018 2019 2020 2021 2017 2018 2019 2020 2021 Repayment NB & planned refinancing NOK Bond 17/21 Newbuildin
Slide 12: Capital expenditure programme – 30.09.2017
Financials Capital expenditure programme – 30.09.2017 Remaining USD mill 2018 2019 2020 2021 2017 Chemical Tankers Hudong 4 x 49,000 dwt (USD 60 mill) 6 24 144 42 - Hudong 2 x 38,000 dwt (USD 58 mill) - 6 12 87 - AVIC 3 x 25,000 dwt (USD 40 mill) 108 - - - Docking 2 22 13 14 19 Other investments 2 1
Slide 13: Agenda
Agenda • Highlights • Financials • Operational review/Strategy • Market update and prospects
Slide 14: Odfjell Compass – Progress on key strategic objectives
Operational review Odfjell Compass – Progress on key strategic objectives Growth We have completed our basic fleet growth/renewal programme. The first three owned vessels was delivered to our fleet late 2Q and during 3Q (Bow Neon, Bow Palladium and Bow Compass) Participated in consolidation th
Slide 15: Vessels
Operational review Odfjell Tankers fleet profile includes the flexibility to adjust to changing markets Future fleet composition Owned/Leased/Pooled vessels Growth assuming renewals TC-in tonnage Target fleet (100 vessels) Vessels 100 90 80 • Large portion of timecharter portfolio up for 70 renewal
Slide 16: Sale of Singapore terminal expected to close during December 2017
Operational review Sale of Singapore terminal expected to close during December 2017 Historical tank terminal transaction multiples • Odfjell Terminals (OTBV) sold its 50% ownership 20 share in Singapore terminal in October at attractive valuation 15 EV/EBITDA (x) • Enterprise value for OTBV’s 50% o
Slide 17: Strategy update - Odfjell Terminals
Operational review Strategy update - Odfjell Terminals Possible Ethylene project Houston We have finalised the basic engineering and have all the required permits We are ready to start construction if we obtain satisfactory commitments from customers, with whom we are in continuous dialogue to
Slide 18: Agenda
Agenda • Highlights • Financials • Operational review/Strategy • Market update and prospects
Slide 19: Terminals: The end of the contango has a negative impact
Financials Terminals: The end of the “contango” in the oil/products market has a negative impact on the terminal business Odfjell Terminals: Commercial available capacity Odfjell Terminals: Capacity by cargo-type* 6.0 2 417 2 500 2 000 4.0 4.0 4.0 4.1 Million CBM 1,000 cbm 1 500 2.9 2.9 2.8 3.0 1 10
Slide 20: Tankers: volumes are up, but the market continues to be weak
Financials Tankers: our volumes are up, but the market continues to be weak. Our COA portfolio softens the impact Odfjell Tankers: Volume development Odfjell Tankers: ODFIX versus chemical tanker spot rates* 150 6.0 Volumes carried Odfix index 140 Odfix average 2008-2016 130 -4.1% Million tonnes 120
Slide 21: Market dynamics – Chemical tankers
Market update and prospects Market dynamics – Chemical tankers DEMAND: Supply/Demand forecast • Clarksons Platou forecast tonne-mile demand to grow around 4% through 2019 • Demand growth driven by new plant capacity in the US and ME driven by its feedstock advantages • This will drive longer hauls o
Slide 22: Prospects
Prospects • We believe that chemical tanker markets will gradually improve through 2018 as tonne-mile demand is expected to surpass net fleet growth • We expect storage demand for oil minerals to remain challenging while we expect stable demand and results for chemical storage • We expect 4Q results
Slide 23: Company representatives
Company representatives: Kristian Mørch, CEO | Tel: +47 55 27 00 00 | E-mail: kristian.morch@odfjell.com Terje Iversen, CFO | Tel: +47 55 27 00 00 | Mobile: +47 93 24 03 59 | E-mail: terje.iversen@odfjell.com IR Contact: Bjørn Kristian Røed, Research & IR | Tel: +47 55 27 47 33 | Mobile: +47 40 91 9