Dampskibsselskabet Norden A/s · OMXCOP:DNORD
Dampskibsselskabet Norden A/s — FY2019 Earnings Presentation
33 slides from Dampskibsselskabet Norden A/s's earnings presentation, Mar 4, 2020
Slide 1: Annual Report 2019 Investor presentation
ANNUAL REPORT 2019 Investor presentation Copenhagen, Denmark 4 March 2020 1 | Annual Report 2019 CUSTODIANS OF SMARTER GLOBAL TRADE
Slide 2: Agenda
AGENDA • Highlights 2019 • Q4 and 2019 results – Dry Operator – Dry Owner – Tanker • New business unit structure • Market outlook • Guidance 2020 • Final words “In addition to the agile management of cyclical exposure to shipping industry, NORDEN also delivers additional value through operator activ
Slide 3: Highlights 2019
Highlights 2019 3 | Annual Report 2019 CUSTODIANS OF SMARTER GLOBAL TRADE
Slide 4: Business update - overall highlights 2019
BUSINESS UPDATE - OVERALL HIGHLIGHTS 2019 Strong finish to the year Yearly results development • Q4 2019 Adjusted Result USD 31 million 80 30-70 • 2019 Adjusted Result USD 23 million 60 – Last updated guidance for 2019 was USD 10 to 45 million USD million 40 28 20 23 – Negative impact due to IFRS 16
Slide 5: Business unit performance Q4 and 2019
Business unit performance Q4 and 2019 5 | Annual Report 2019 CUSTODIANS OF SMARTER GLOBAL TRADE
Slide 6: Dry Operator - Q4 and 2019
BUSINESS UPDATE – 2019 DRY OPERATOR DRY OPERATOR - Q4 AND 2019 • Adjusted Result of USD 14 million in Q4 – USD 8 million for 2019 • 2019 was a challenging trading environment with events such as the Vale dam accident, Chinese swine flu and escalating trade tensions between the USA and China • The Dr
Slide 7: Dry Owner - Q4 and 2019
BUSINESS UPDATE – 2019 DRY OWNER DRY OWNER - Q4 AND 2019 • Q4 2019 Adjusted Result of USD 2 million – USD 2 million for 2019 – Negative effect in 2019 due to IFRS 16 USD 12 million – Good protection from coverage in a weak market • Reduced forward exposure – Selling 2 Panamax, 2 Supramax and 2 Handy
Slide 8: Tankers - Q4 and 2019
BUSINESS UPDATE – 2019 TANKERS TANKERS - Q4 AND 2019 • Q4 2019 Adjusted Result of USD 15 million – USD 13 million for 2019 – Negative effect in 2019 due to IFRS 16 USD 2 million • Seasonally strong market in Q4 – Handysize rates increased in early Q4, MR rates increased in December • Optimised the t
Slide 9: New business unit structure - Trading to the next level
New business unit structure -“Trading to the next level” 9 | Annual Report 2019 CUSTODIANS OF SMARTER GLOBAL TRADE
Slide 10: Major shipping trends
“TRADING TO THE NEXT LEVEL”: STRATEGY 2020-2022 MAJOR Decarbonisation Shorter shipping cycles SHIPPING • Climate change is a driver • Increased uncertainty and complexity • Decreased global use of oil and coal • Opportunities for trading and earning • Reluctance to order newbuildings margins in a vo
Slide 11: NORDEN's transformation
“TRADING TO THE NEXT LEVEL”: STRATEGY 2020-2022 NORDEN’S TRANSFORMATION NORDEN has transitioned to a new business unit structure, which brings more agility and focus. This transition will facilitate: Higher risk adjusted returns • Short term trading-oriented operator activities • Active exposure man
Slide 12: New business unit structure
NEW BUSINESS UNIT STRUCTURE NORDEN is after the transformation is less dependent on long-term ASSET MANAGEMENT DRY OPERATOR TANKER OPERATOR cyclical market exposure Active management of cyclical Providing efficient global Providing efficient global transport and more focused on market exposure withi
Slide 13: Substantial value beyond asset values
SUBSTANTIAL VALUE BEYOND ASSET VALUES ASSET MANAGEMENT DRY OPERATOR TANKER OPERATOR NAV-BASED VALUATION EARNINGS BASED VALUATION EARNINGS BASED VALUATION Dry Cargo and Tanker USDm USDm USDm Market value of own vessels 833 Adjusted net result last 12 8 Adjusted net result last 12 17 months months Cas
Slide 14: Market outlook
Market outlook 14 | Annual Report 2019 CUSTODIANS OF SMARTER GLOBAL TRADE
Slide 15: Tanker market outlook 2020
ASSET MANAGEMENT TANKER MARKET OUTLOOK 2020 • NORDEN expects an overall stronger tanker market in 2020 than in 2019 • Forward rates and asset values remain high despite global uncertainty • Strong tonnes-mile demand expected – Increased refinery runs – Longer transportation distance due to Atlantic
Slide 16: Dry cargo market outlook 2020
ASSET MANAGEMENT DRY CARGO MARKET OUTLOOK 2020 • Overall the dry cargo market is expected to be weaker than in 2019 • Good demand growth driven by acceleration in Brazilian iron ore exports and good grain seasons • Howevver, supply growth is expected to be higher – Order book of 10%, and lower slipp
Slide 17: Guidance
Guidance 17 | Annual Report 2019 CUSTODIANS OF SMARTER GLOBAL TRADE
Slide 18: Guidance 2020
GUIDANCE 2020 In challenging markets, NORDEN expects to continue to deliver improved earnings with an expected Adjusted Result for 2020 of USD 30-70 million ASSET MANAGEMENT DRY OPERATOR TANKER OPERATOR • Expects significant • Adjusted Result above that for • Net result similar to or slightly improv
Slide 19: Final words
“TRADING TO THE NEXT LEVEL”: STRATEGY 2020-2022 FINAL WORDS 19 | Annual Report 2019 CUSTODIANS OF SMARTER GLOBAL TRADE
Slide 20: 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 • Well positioned into Q1 despite the negative effect from the Corona virus • New business unit structure • New dividend policy: Min. 50% pay-out • Guidance 2020: USD 30-70 million
Slide 21: 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 2020 and subsequent years are subject to uncertainty, and NORDEN’s actual results may theref
Slide 22: 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 22 | Annual Report 2019 CUSTODIANS OF SMARTER GLOBAL TRADE
Slide 23: Back-up slides
Back-up slides 23 | Annual Report 2019 CUSTODIANS OF SMARTER GLOBAL TRADE
Slide 24: 24 | Annual Report 2019 CUSTODIANS OF SMARTER GLOBAL TRADE
24 | Annual Report 2019 CUSTODIANS OF SMARTER GLOBAL TRADE
Slide 25: Dry Owner portfolio
DRY OWNER PORTFOLIO Dry Owner at a glance • Primarily Supramax and Panamax vessels • Large portfolio of long-term charters from Japan with significant optionality incl. purchase options • Cover portfolio based on cargo contracts with major commodity owners 25 | Annual Report 2019 CUSTODIANS OF SMART
Slide 26: Dry Owner positioning
DRY OWNER POSITIONING 26 | Annual Report 2019 CUSTODIANS OF SMARTER GLOBAL TRADE
Slide 27: Tankers portfolio
TANKERS PORTFOLIO Tankers at a glance • MR and Handysize vessels • Primarily own technical management • Portfolio of 36 chartered in vessels • All short-term chartering-out conducted via Norient Product Pool (NPP) of which NORDEN owns 100% • Long track record of earnings beating the market benchmark
Slide 28: Tanker positioning
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 28 | Annual Report 2019 CUSTODIANS OF SMARTER GLOBAL TRADE
Slide 29: 2019 and Q4 income statement
2019 AND Q4 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. 29 | Annual Report 2019 CUSTODIANS OF SMARTER GLOBAL TRADE
Slide 30: Cash flows during 2019
CASH FLOWS DURING 2019 30 | Annual Report 2019 CUSTODIANS OF SMARTER GLOBAL TRADE
Slide 31: Scrubber update
ASSET MANAGEMENT SCRUBBER UPDATE • 16 out of 18 scrubber installations have been completed on own vessels • 4 scrubbers installed on leased vessels • VLSFO is the preferred compliant fuel • VLSFO – HSFO spread is very volatile – Down with oil price – Spread = 158 Rotterdam VLSFO – HSFO forward sprea
Slide 32: Business unit value drivers
“TRADING TO THE NEXT LEVEL”: STRATEGY 2020-2022 BUSINESS UNIT VALUE DRIVERS Market Regional Options Employment Clip deals Vessel Vessel Minimising Technical Pool exposure exposure arbitrage selection operation ballast management Management Taking a view Taking a view Securing and Choosing Securing m
Slide 33: The share (DNORD)
THE SHARE (DNORD) Master data Composition of shareholders Shareholder capital DKK 42,200,000 • International ownership share counted 634 Number of shares and registered shareholders, in aggregate owning denomination 42,200,000 shares of DKK 1 28.1% of the share capital. Classes of shares 1 Voting an
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