Dampskibsselskabet Norden A/s · OMXCOP:DNORD
Dampskibsselskabet Norden A/s — Norden — FY2014 Earnings Presentation
31 slides from Dampskibsselskabet Norden A/s's earnings presentation, Mar 4, 2015
Slide 1: NORDEN Results – Annual report 2014
NORDEN RESULTS Annual report 2014 Hellerup, Denmark 4 March 2014 NORDEN Full year results 2014| 1 Our business is global tramp shipping
Slide 2: Agenda
AGENDA Group highlights Financials Initiatives Dry Cargo Tankers 2015 expectations Q & A NORDEN Full year results 2014| 2 Our business is global tramp shipping
Slide 3: 2014 Highlights
2014 HIGHLIGHTS EBITDA Key messages 300 240 2014 results heavily impacted by 200 186 148 downturn in dry cargo market 100 USD -31 mill. in operating EBITDA USD million 24 -31 0 USD –230 mill. in provisions -100 -230 -200 Tankers had the best results since -300 2010 2011 2012 2013 2014 2008 2
Slide 4: Initiatives: Reaction to challenging markets
INITIATIVES REACTION TO CHALLENGING MARKETS FLEXIBILITY USED – CHARTERED DRY CARGO FLEET REDUCED BY 21% PLANNED INVESTMENT PROGRAMME HALTED IN JANUARY 2014 SOLD 5 VESSELS WITH PROCEEDS OF USD 112 MILL. USD 20 MILL. ANNUAL COST SAVING PROGRAMME INITIATED SIGNIFICANTLY INCREASED COVERAGE FOR
Slide 5: Substantial loss driven by Dry Cargo
FINANCIALS SUBSTANTIAL LOSS DRIVEN BY DRY CARGO Group EBITDA of USD -261 mill. EBITDA 300 Dry Cargo 50 Tankers Dry Cargo EBITDA of USD -294 249 45 44 171 mill. 200 39 131 40 100 35 Tanker EBITDA of USD 44 mill. 30 28 USD million USD million 0 26 -5 -64 25 -100 20 -230 15 -200 Dry Cargo 10 -3
Slide 6: Outstanding yard payments fully covered
FINANCIALS OUTSTANDING YARD PAYMENTS FULLY COVERED Outstanding yard payments are fully covered by current cash and securities and undrawn credit facilities Yard payments reduced by USD 53 mill. due to resale of 2 Supramax newbuilding orders with scheduled delivery in 2015 Still no net debt G
Slide 7: Decreasing second hand prices
FINANCIALS DECREASING SECOND HAND PRICES Dry bulk second hand market prices dropped significantly over the year and are now back to the low point from 2012 Product tanker values stabilised in Q4 – and have started to increase NORDEN fleet value slightly below book values by end-2014 Tankers
Slide 8: Dry Cargo: Poor markets driven by weak demand
DRY CARGO POOR MARKETS DRIVEN BY WEAK DEMAND BDI rates ended 8% lower in Baltic Dry Index 2014 compared with 2013, 2.500 mostly due to very low rates in 2.000 second half-year 1.500 Deteriorating market 1.000 conditions driven by 500 surprisingly low demand 0 growth Jan Feb Mar Apr May Jun Jul A
Slide 9: Dry Cargo: Challenging market to continue in 2015
DRY CARGO CHALLENGING MARKET TO CONTINUE IN 2015 Demand expected to increase by 3-5% Continued growth in iron ore trade but outlook dependent on lower Chinese production Growth in coal trade driven by India, however, not back to previous growth levels as China is expected to continue to import
Slide 10: Dry Cargo: Increased coverage for 2015
DRY CARGO INCREASED COVERAGE FOR 2015 Coverage increased in Q4 and also in Q1 2015 – especially for H1 Coverage levels highest in Supramax (66% at year-end) and Panamax (75% at year-end) Average rate level of 2015 coverage is USD 11,400 per day (31/12/2014) Only few possibilities for taking
Slide 11: Product Tankers: Broadly based market improvement in Q4
PRODUCT TANKERS BROADLY BASED MARKET IMPROVEMENT IN Q4 Lower than expected rates in first three quarters of 2014 Strong rate levels from end-Q3 sparked by the drop in oil prices Rates surged to highest levels seen in years – broadly founded in all vessel types and regions West CPP (USD/day) Ea
Slide 12: Product Tankers: Strong start but increasing supply
PRODUCT TANKERS STRONG START – BUT INCREASING SUPPLY Strong start to 2015 in most markets Global refinery additions are anticipated to strengthen product demand. However, this will most likely be outweighed by a 5-6% supply growth A strong crude market could result in a LR1/LR2 switch from CPP
Slide 13: 2015 Full Year Guidance
2015 FULL YEAR GUIDANCE Outlook Comments USDm Dry Cargo Tankers Total Guidance based on EBIT level due to higher share of owned EBIT -40 to 20 5-45 -40 to 40 vessels Profit from vessel 0 Significant uncertainty in sales outlook CAPEX 80-120 Change in dry cargo rates of USD 1,000 per day impact
Slide 14: 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 2015 and subsequent years are subject to uncertainty, and NORDEN’s actual results may therefore differ from the p
Slide 15: Thank you for your attention
Thank you for your attention http://www.linkedin.com/company/ds-norden/ http://twitter.com/DS_NORDEN http://www.facebook.com/shippingtrainee.com http://www.facebook.com/dampskibsselskabetnorden Dampskibsselskabet NORDEN A/S 52, Strandvejen DK-2900 Hellerup Denmark Phone: +45 3315 0451 www.ds-norden.
Slide 16: Back-up
Back-up NORDEN Full year results 2014| 16 Our business is global tramp shipping
Slide 17: Last 5 years performance
LAST 5 YEARS PERFORMANCE Earnings per share (USD) Return on equity 5,8 12,9% 2,1 4,4% -2,9% -1,2 -15,1% -6,8 -10,3 -30,3% 2010 2011 2012 2013 2014 2010 2011 2012 2013 2014 Cash flows, operations and investments (USDm) Dividend yield 4,0% 7 298 3,0% 120 122 -9 66 -62 -46 -380 -355 1,8% 1,8% 2010 2011
Slide 18: Overall results
OVERALL RESULTS USDm 2012 2013 2014 Q4 2014 EBITDA Tankers 28 39 44 25 EBITDA Dry Cargo 131 -5 -294 -257 Unallocated -10 -10 -11 -4 EBITDA - Group 148 24 -261 -236 Vessel sales -24 3 0 0 Depreciation and write- -389 -79 -68 -18 downs EBIT -265 -51 -336 -258 Net profit -279 -48 -416 -302 Cash from op
Slide 19: Mechanics of provision in Q4 2014
MECHANICS OF PROVISION IN Q4 2014 – AN EXAMPLE: THEORETICAL TC-IN CONTRACT 20000 TC-in cost: 18,000 USD/day Provision: 18000 4x365x4000 USD/day = 16000 USD 5.84 mill. 14000 Market level: 14,000 USD/day 12000 10000 8000 6000 4000 2000 0 Q4 2014 2015 2016 2017 2018 Taking a loss in the P&L before it
Slide 20: Financial strength
FINANCIAL STRENGTH Strong capital structure Net committed cash Strong focus on liquidity USDm 2014 2013 Cash in low-risk deposit Adjusted net interest bearing -6 189 assets* accounts and securities T/C obligations** -1,542 -1,861 Equity ratio at 64.1% Newbuilding instalments less -355 -295 pro
Slide 21: Fleet values
FLEET VALUES NORDEN Full year results 2014| 21 Our business is global tramp shipping
Slide 22: Fleet overview
FLEET OVERVIEW NORDEN Full year results 2014| 22 Our business is global tramp shipping
Slide 23: Dry Cargo
DRY CARGO NORDEN Full year results 2014| 23 Our business is global tramp shipping
Slide 24: Product Tankers
PRODUCT TANKERS NORDEN Full year results 2014| 24 Our business is global tramp shipping
Slide 25: Development highlights
DEVELOPMENT HIGHLIGHTS 2015 Office in Melbourne opens 300 2005 2008 275 1871 Financial Norient Mads C. Holm founds NORDEN; first vessel crisis Product delivered in 1872 begins 250 Pool 225 1996-2005 Number of active vessels Offices in Singapore, 1875-76 200 Annapolis, Shanghai, First vessel calls Ch
Slide 26: A leading global tramp operator
A LEADING GLOBAL TRAMP OPERATOR Dry Cargo Capesize Post-Panamax Panamax Supramax Handysize 250 200 150 100 50 0 Dry cargo Tankers NORDEN vessels Pool vessels Tankers MR Handysize Modern fleet Global network of offices and port captains Pools in Dry cargo (Handysize & Post-Panamax) and Tankers
Slide 27: 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 Significant asset upside through purchase options Flexible fleet Coverage and customer focus Capacity Employment Sale and purchase Customer relations Co
Slide 28: Enabling value creation based on the cycle and throughout the cycle
…ENABLING VALUE CREATION BASED ON THE CYCLE AND THROUGHOUT THE CYCLE Exploiting the cycle Creating value throughout the cycle Taking a view on the fundamental market and Creating value above industry level irrespective of adjusting our exposure market conditions Levers: Levers: Commercial operations
Slide 29: Dry Cargo month rolling average
DRY CARGO 12 MONTH ROLLING AVERAGE Capesize Panamax 50.000 30.000 45.000 25.000 40.000 35.000 20.000 30.000 USD/day USD/day 25.000 15.000 20.000 10.000 15.000 10.000 5.000 5.000 - - Jan-10 Jan-11 Jan-12 Jan-13 Jan-14 Jan-15 Jan-10 Jan-11 Jan-12 Jan-13 Jan-14 Jan-15 Supramax Handysize 25.000 18.000 1
Slide 30: Dry Cargo: Regional rates
DRY CARGO REGIONAL RATES Handysize Supramax Panamax 7 14 10 1,000 USD/day 1,000 USD/day 1,000 USD/day 6 12 8 5 10 6 4 8 4 3 6 2 2 4 0 1 2 -2 0 0 -1 -2 -4 -2 -4 -6 -3 -6 -8 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan FebMar Apr May Jun Jul Aug S
Slide 31: The share (DNORD)
THE SHARE (DNORD) Master data Composition of shareholders 16,226 registered shareholders Shareholder capital DKK 42,200,000 owning 90.5% Number of shares and 42,200,000 shares of Approx. 30% international denomination DKK 1 ownership Classes of shares 1 Voting and ownership restrictions None A/S