May 27, 2015
NORDIC SHIPHOLDING A/S
Company Announcement: 04/2015
Published via NASDAQ OMX on May 27, 2015
Q1 Result 2015
Summary
The comparison figures for period ended 31 March 2014 are stated in parenthesis.
This Q1 report covers the period 1 January 2015 to 31 March 2015.
The Group made a good result in Q1 2015, generating a profit before tax of USD 2.7 million as compared to a loss before tax of USD 1.1 million in the same quarter last year. The better performance in Q1 2015 was due to higher average rates from the vessels deployed in Handytankers Pool, higher TCE income from the 3-year time-charter locked in for the LR1 vessel (Nordic Anne) and lower vessel operating expenses.
Gross revenue earned in Q1 2015 decreased slightly by 4.6% as the Q1 2015 revenue comprised freight income from the vessels in the Handytankers Pool and time-charter income which is net of voyage expenses from the LR1 vessel (Nordic Anne), whilst the Q1 2014 gross revenue represented freight income from the 2 pools.
TCE earnings rose 24.9% to USD 9.2 million (USD 7.3 million) in Q1 2015 due to higher TCE earnings for the vessels in the Handytankers Pool arising from reduced bunker expenses and higher TCE income from the 3-year time-charter locked in for Nordic Anne.
Expenses relating to the operation of vessels in Q1 2015 decreased 27.9% to USD 3.4 million (USD 4.7 million). The significant cost savings in Q1 2015 was attributed to the change of technical managers in 2014 and one-off cost incurred in 2014 (USD 0.6 million) relating to the change of technical managers.
EBITDA increased to USD 5.2 million (USD 1.2 million) as a result of improved earnings in Q1 2015 and one-off costs incurred in Q1 2014 arising from the change of technical managers amounting to USD 0.6 million and higher professional fees due to the restructuring in December 2013.
Depreciation amounted to USD 1.7 million (USD 1.5 million).
Net finance expenses were slightly lower at USD 0.8 million (USD 0.9 million) as the working capital loan was repaid in full in December 2014.
The result after tax improved significantly in Q1 2015 to USD 2.7 million as compared to Q1 2014 (-USD 1.1 million).
Under the loan agreement, cash in excess of USD 6.0 million will be used to pay down the loan facility. During Q1 2015, this cash sweep mechanism was activated and USD 1.1 million was used to pay down the loan, in addition to the regular loan amortisation.
Cash flow generated from operations was USD 5.2 million (USD 1.1 million) mainly from the distributions earned by the Handytankers Pool and time-charter income received for Nordic Anne, offset by payment of periodic interest expenses on the term loan. The Group invested USD 0.2 million in dry-docking and made a partial repayment of USD 2.1 million on the term loan facility.
Cash balance as at 31 March 2015 was USD 7.4 million (USD 6.3 million).
In Q1 2015, the average daily TCE rate earned by the vessels in the Handytankers Pool was better than the forecasted daily rate, whilst the TCE rate earned by the LR1 vessel (Nordic Anne) tracked the forecast.
Despite the Q1 2015 result, the full year forecasted financials remain unchanged, as uncertainty exist for the full year, which is also in line with the commercial managers’ forecast. Barring unforeseen circumstances, the Group expects the TCE revenue from the 5 product tankers in the pool and the time-charter income from Nordic Anne to be in the region of USD 29.0 million – USD 32.0 million for 2015. The EBITDA (earnings before interest, tax, depreciation and amortisation) is expected to be in the range of USD 13.0 million – USD 16.0 million while result before tax is expected to be between USD 3.0 million – 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.
The Group’s cash flows is expected to be USD 5.0 million – 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 loan facility. This cash sweep mechanism was activated in Q1 2015 and is anticipated to be also activated after Q1 2015. As mentioned in 2014 Annual Report, approximately USD 3.0 million – USD 6.0 million of excess cash is expected to be used to pay down the loan in 2015. This loan prepayment arising from the cash sweep is in addition to the regular loan amortisation.
The Board continues to source for suitable investment opportunities to grow the Company and seeks to maximise returns for shareholders.
For further information, please contact:
Knud Pontoppidan, Chairman of the board, Nordic Shipholding A/S: +45 39 29 10 00
