March 18, 2015
NORDIC SHIPHOLDING A/S
Company Announcement: 01/2015
Published via NASDAQ OMX on March 18, 2015
Nordic Shipholding A/S – Annual Report 2014
Summary
Nordic Shipholding A/S made a profit of USD 2.3 million in 2014 due to improved earnings and a one-off gain of USD 5.2 million arising from the reversal of impairment loss on Nordic Anne previously recognised, which was slightly above expectations. Excluding this gain, the Group incurred a net loss of USD 2.8 million for 2014.
The Board of Directors of Nordic Shipholding A/S has approved the Annual Report for 2014 on March 18, 2015.
2014 in brief:
- All the 6 vessels were transferred to separate wholly-owned legal entities in Singapore as part of the restructuring completed on 19 December 2013. At the same time, the change of technical managers for all the vessels was also completed with two new technical managers, each managing 3 vessels.
- In December 2014, the Group repaid the short-term working capital facility of USD 4.0 million extended by the lending banks as part of the restructuring.
- Gross revenue earned by the 6 vessels reached USD 50.1 million, which resulted in a TCE revenue of USD 27.1 million and an EBITDA of USD 6.8 million. Equity totalled USD 30.6 million.
- The Group reversed partially the impairment loss previously recognised in 2012 on Nordic Anne of USD 5.2 million to bring the carrying value of Nordic Anne at the consolidated Group level to market value assessed by independent brokers.
- For the rest of the 5 vessels, the impairment test did not reveal a need for further write-down or reversal in 2014.
- The restructuring that was completed on 19 December 2013, and various operational changes implemented in 2014 have strengthened the financial position of the Group. For 2015, barring unforeseen circumstances, the Group is expected to post a modest profit arising mainly from the operations of the 6 vessels.
Forecast for 2015:
- For 2015, 5 of the Group’s 6 vessels will remain commercially deployed on a pool basis. One vessel is time-chartered under a minimum 3-year time-charter arrangement. As rates in 2015 are forecasted to improve compared to 2014, the TCE revenue from the 5 product tankers in the pool and the time charter income from Nordic Anne are expected to be in the region of USD 29.0 – USD 32.0 million.
- After taking into account the operating expenditure budgeted by the respective technical managers, the Group expects EBITDA (earnings before interest, tax, depreciation and amortisation) to be in the range of USD 13.0 – USD 16.0 million.
- The result before tax is expected to be between USD 3.0 – USD 6.0 million. The Group does not expect any write-downs of vessels’ carrying value unless significant weakness in the product tanker sector sets in.
- In terms of cash flow, the Group’s cash flow is expected to be between USD 5.0 – USD 8.0 million after accounting for USD 4.0 million of loan amortisation in 2015. Under the loan agreement with the lending banks, cash in excess of USD 6.0 million will be used to pay down the long-term facility. Such cash sweep is anticipated to be activated in 2015 whereby approximately USD 3.0 – USD 6.0 million of excess cash is expected to be used to pay down the loan in 2015. This is in addition to the regular loan amortisation. The Group is also expected to meet the various covenants imposed under the loan agreement during this period.
- The forecast for 2015 is based on various assumptions as set out in the Annual Report.
The Board of Directors proposes to elect Mr Kanak Kapur as a new member to the Board of Directors at the coming Annual General Meeting. Mr Kanak Kapur is nominated by the Company’s main shareholder, Nordic Maritime S.à.r.l.
The Board continues to source for suitable investment opportunities to grow the Company and seeks to maximize returns for shareholders.
For further information please contact:
Knud Pontoppidan, Chairman of the board, Nordic Shipholding A/S: +45 39 29 10 00
