Q1 Result 2014
Summary
The comparison figures for first quarter 2013 are stated in parenthesis.
This quarterly report covers the period 1 January 2014 to 31 March 2014.
The Group incurred a loss before tax of USD 1.1 million in Q1 2014 compared to a larger loss of USD 2.5 million before tax in the same quarter last year. This was due to lower interest expenses of USD 1.3 million and no contribution in Q1 2013 from Nordic Ruth as she underwent repair and was off-hire. Coupled with improved freight rates, TCE earnings rose 27.9% to USD 7.3 million (USD 5.7 million) in Q1 2014.
Expenses relating to the operation of vessels in Q1 2014 was USD 4.1 million, a marginal decrease compared to the same period last year (USD 4.3 million). However, EBITDA fell 8.3% to USD 1.2 million (USD 1.3 million) due mainly to higher professional fees incurred and costs relating to the change of technical managers.
Depreciation was USD 1.5 million (USD 1.6 million).
With the loans being refinanced, net finance expenses were lower at USD 0.8 million (USD 2.2 million).
Cash flow from operations was USD 1.1 million (USD 1.5 million) mainly from the distributions earned by the respective pools and after payment of periodic interest expense on the working capital facility and term loan.
Cash balance as at 31 March 2014 totalled USD 6.3 million (USD 7.7 million).
As of 31 March 2014, two vessels (Nordic Hanne and Nordic Agnetha) have been transferred to two separate wholly-owned legal entities in Singapore. In April 2014, Nordic Amy, Nordic Pia and Nordic Anne were transferred to three separate wholly-owned legal entities in Singapore.
Save for Nordic Ruth, the change of technical managers for the five vessels has been completed as of the date of this report with Columbia Shipmanagement managing two vessels and Thome Ship Management managing three vessels.
For most of Q1 2014, the average daily TCE rate earned by the vessels in the Handytankers pool was marginally better than the forecasted daily rate of USD 14,000. However, for the LR1 vessel, the daily TCE rate was below the forecasted daily rate of USD 15,200. Barring unforeseen circumstances, the forecasted financials indicated in the 2013 Annual Report remains unchanged.
As announced on 19 May 2014, the Company’s main shareholder has established a joint venture with BW Group in the product tanker segment. The Company is not a party to this venture and it is too early to say whether Nordic Shipholding will be impacted by this new venture.
The Board is continually seeking suitable investment opportunities in the product tanker segment to grow the Company and maximise shareholder returns.
For further information please contact:
Knud Pontoppidan, Chairman of the board, Nordic Shipholding A/S: +45 39 29 10 00
