Dampskibsselskabet Norden A/s · OMXCOP:DNORD
Dampskibsselskabet Norden A/s — Q3 2019 Earnings Presentation
34 slides from Dampskibsselskabet Norden A/s's earnings presentation, Nov 6, 2019
Slide 1: Q3 results presentation
PRESENTATION Q3 results Copenhagen, Denmark 6 November 2019 NORDEN Singapore office entrance 1 | Q3 REPORT 2019 CUSTODIANS OF SMARTER GLOBAL TRADE
Slide 2: Agenda
AGENDA • Business update • Dry Operator – Q3 2019 update • Dry Owner – Q3 2019 update – Market outlook • Tankers – Q3 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 | Q3 REPORT 2019 CUSTODIANS OF SMARTER GLOBAL TRADE
Slide 4: Business update - overall: seasonally weak tanker market
BUSINESS UPDATE - OVERALL SEASONALLY WEAK TANKER MARKET – DRY OPERATOR WELL POSITIONED FOR Q4 Financial highlights Quarterly results • Q3 2019 Adjusted Result USD -4 million – Dry Operator USD 3 million 25 – Dry Owner USD 2 million – Tankers USD -8 million 20 • On October 24 NORDEN adjusted guidance
Slide 5: Positive result expected for full year 2019
BUSINESS UPDATE - GUIDANCE POSITIVE RESULT EXPECTED FOR FULL YEAR 2019 Guidance – Adjusted result Guidance 50 On October 24, NORDEN revised the guidance for the full year of 2019 40 Dry Operator adjusted to 5 to 20 million (previously 0 to 10 million) 30 • Strong result in the final quarter expected
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) 321 Dry Cargo (+/-1,000USD* = USD 10 mill.) Adjusted Result last 4 quarters (USD million) 10.4 16,000 Capacity Cover Tanker Vessels
Slide 7: Dry Operator
Dry Operator 7 | Q3 REPORT 2019 CUSTODIANS OF SMARTER GLOBAL TRADE
Slide 8: Well positioned for the Q4 2019
BUSINESS UPDATE – Q3 2019 DRY OPERATOR WELL POSITIONED FOR THE Q4 2019 • Adjusted Result of USD 3 million in Q3 • Well positioned for the final quarter of 2019 • Expectations of a positive full year result • Highest quarterly activity so far - continuously investing in growth and capabilities Dry Op
Slide 9: Dry Owner
Dry Owner 9 | Q3 REPORT 2019 CUSTODIANS OF SMARTER GLOBAL TRADE
Slide 10: Balanced portfolio with significant optionality
BUSINESS UPDATE – Q3 2019 DRY OWNER BALANCED PORTFOLIO WITH SIGNIFICANT OPTIONALITY • Q3 2019 Adjusted Result of USD 2 million • Scrubber installations well under way - CAPEX program coming to an end • Sale of one Supramax during the quarter • Balanced portfolio with significant optionality • More t
Slide 11: Rates rebounded in Q3
MARKET REVIEW – DRY CARGO Q3 2019 RATES REBOUNDED IN Q3 Key developments Panamax and Supramax rates • After a weak first half of 2019, rates 20,000 rebounded during the 3rd quarter 15,000 10,000 – Panamax average earnings up 29 % compared to 5,000 Q3 2018 - – Supramax average earnings up 6 % compare
Slide 12: IMO 2020 impacts available tonnage
MARKET REVIEW – DRY CARGO OUTLOOK IMO 2020 IMPACTS AVAILABLE TONNAGE • Continued weakening of the global economy and high coal stock in China and India • Reduced fleet supply from scrubber and ballast water treatment system installations • NORDEN expects asset values and rates to be supported in the
Slide 13: Tankers
Tankers 13 | Q3 REPORT 2019 CUSTODIANS OF SMARTER GLOBAL TRADE
Slide 14: Seasonally weak market in Q3
BUSINESS UPDATE – Q3 2019 TANKERS SEASONALLY WEAK MARKET IN Q3 • Q3 2019 Adjusted Result of USD -8 million due to seasonally weak tanker market • Forward rates and asset values continue to increase • 6 scrubbers installed and MR’s are back trading in strong tanker market – only 2 installations remai
Slide 15: MR rates starting to improve
MARKET REVIEW – TANKERS Q3 2019 MR RATES STARTING TO IMPROVE • Product tanker rates at weak levels throughout Q3 – Higher than usual refinery turnarounds and continued stock draws • During October, the tanker market rebounded – High number of vessels not active due to scrubber installations, floatin
Slide 16: Strong tanker market expected well into 2020
MARKET REVIEW – TANKERS OUTLOOK STRONG TANKER MARKET EXPECTED WELL INTO 2020 • NORDEN expects the market to remain strong well into 2020 – From around the end of October refineries are expected to increase runs to produce the necessary IMO 2020 compliant fuel – Product stocks are running low – New r
Slide 17: Final words
Final words 17 | Q3 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 • The tanker market has strengthened with a positive outlook well into 2020 • Strong Q4 result expected in Dry Operator and tankers • Increased value of the time-chartered portfolio
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 | Q3 REPORT 2019 CUSTODIANS OF SMARTER GLOBAL TRADE
Slide 21: Back-up slides
Back-up slides 21 | Q3 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: Dry Owner portfolio
NORDEN DNA DRY OWNER PORTFOLIO Owned Fleet Dry Owner at a glance Owned Vessels Owned NB • Primarily Supramax and Panamax vessels 2 • Large portfolio of long-term charters from Japan with significant optionality incl. purchase options 9.5 • Cover portfolio based on cargo contracts with major 2 2 comm
Slide 25: Tankers portfolio
NORDEN DNA TANKERS PORTFOLIO Owned Fleet Tankers at a glance • MR and Handysize vessels • Primarily own technical management 15 • Portfolio of 36 chartered in vessels 9 • All short-term chartering-out conducted via Norient Product Pool (NPP) of which NORDEN owns 100% MR Handysize • Long track record
Slide 26: Q3 2019 income statement
Q3 2019 INCOME STATEMENT * Adjusted Result for the period was computed as “Profit/loss for the period” adjusted for “Profit/loss from sale of vessels, etc.” including vessels in joint ventures. 26 | Q3 REPORT 2019 CUSTODIANS OF SMARTER GLOBAL TRADE
Slide 27: Cash flows during the third quarter
CASH FLOWS DURING THE THIRD QUARTER 27 | Q3 REPORT 2019 CUSTODIANS OF SMARTER GLOBAL TRADE
Slide 28: Strong balance and liquidity position
STRONG BALANCE AND LIQUIDITY POSITION CAPEX and liquidity ASSETS (USD MILLION) 400 Current assets 350 300 148 339 Cash and cash equivalents 191 USD million 250 Other current assets 371 200 150 191 Non-current assets 100 Dockings, scrubbers and BWT Systems Vessels (incl. newbuildings) 783 50 43 Newbu
Slide 29: Scrubber economics remain attractive
SCRUBBER ECONOMICS REMAIN ATTRACTIVE • Scrubbers expected to yield significant cost savings from 2020 – Daily TCE earnings of approximately USD 2,500 – 5-year return of more than 25 % – Payback period of less than 2.5 years Rotterdam VLSFO – HSFO forward spread* Supramax average TCE from scrubber* 3
Slide 30: Scrubber installation schedule
SCRUBBER INSTALLATION SCHEDULE Owned vessel scrubber installation schedule • 36 scrubbers secured – A mix of Panamax, Supramax and MR 12 10 8 • 20 scrubber installation on own 6 4 vessels 2 – Capex of approximately USD 44 million 0 Q1 2019 Q2 2019 Q3 2019 Q4 2019 Q1 2020 Q2 2020 Q3 2020* Q4 2020 – M
Slide 31: Dry Owner positioning
30 SEPTEMBER 2019 DRY OWNER POSITIONING 31 | Q3 REPORT 2019 CUSTODIANS OF SMARTER GLOBAL TRADE
Slide 32: Tanker positioning
30 SEPTEMBER 2019 TANKER POSITIONING * Including cash running costs of owned vessels. Costs are excluding O/A. Cash costs and revenue of the Tanker capacity and coverage are excluding accounting effects from IFRS 16 standards 32 | Q3 REPORT 2019 CUSTODIANS OF SMARTER GLOBAL TRADE
Slide 33: Supplementary slides
SUPPLEMENTARY SLIDES Scheduled Off-hire days on own vessels Q4 2019 Q1 2020 Q2 2020 Q3 2020 Q4 2020 Q1 2021 Q2 2021 Q3 2021 Total Panamax 32 0 0 0 0 0 0 32 Supramax 192 32 0 0 0 0 20 244 MR 21 32 21 0 0 0 0 74 Handysize Tank 0 0 0 0 0 0 0 10 33 | Q3 REPORT 2019 CUSTODIANS OF SMARTER GLOBAL TRADE
Slide 34: 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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