March 16, 2016
NORDIC SHIPHOLDING A/S
Company Announcement: 01/2016
Published via NASDAQ OMX on March 16, 2016
Nordic Shipholding A/S – Annual Report 2015
- Profit soared to USD 13.6 million (2014: USD 2.4 million)
- Equity ratio rose to 32.2% (2014: 22.4%)
Chairman Knud Pontoppidan comments:
“Nordic Shipholding performed strongly in 2015. A robust freight market, lower operating cost and an impairment reversal led to a profit of USD 13.6 million for 2015, compared to a profit of USD 2.4 million in the previous year.
This has enabled substantial repayments on the loan facilities, resulting in an improved equity ratio to 32.2% from 22.4%. For 2016, barring unforeseen circumstances and assuming the market holds, the Group’s performance is expected to be in line with 2015’s performance (without taking into account any reversal or write-down of impairment loss).”
Summary
Nordic Shipholding A/S made a profit of USD 13.6 million in 2015 due to improved TCE revenue, reduced vessel operating expenses and a one-off gain of USD 5.8 million arising from the reversal of impairment loss for the vessels deployed in the Handytankers Pool previously recognised. The result was within expectations. Excluding this one-off gain of USD 5.8 million (2014: USD 5.2 million), the Group generated a net profit of USD 7.8 million for 2015 (2014: a loss of USD 2.8 million).
The Board of Directors of Nordic Shipholding A/S has approved the Annual Report for 2015 on March 16, 2016.
2015 in brief:
- The Group with its six vessels, continues to be a tonnage provider in the product tanker segment in 2015. The five 37,000 dwt handy tankers remain commercially managed by the Maersk Group in the Handytankers Pool, whilst the 73,000 dwt LR1 Nordic Anne is fixed on a 3-year time-charter from December 2014.
- Gross revenue earned by the 6 vessels reached USD 46.8 million, which resulted in a TCE revenue of USD 35.1 million and an EBITDA of USD 18.2 million. Equity totalled USD 44.2 million and equity ratio reached 32.2%.
- The improved TCE revenue of USD 35.1 million was due to higher TCE revenue for the vessels in the Handytankers Pool arising primarily from higher gross freight rates and reduced bunker expenses. The TCE revenue from the 3-year time-charter locked in for Nordic Anne was also higher than her share of the LR1 pool earnings in 2014.
- The improved performance resulted in an after tax profit of USD 13.6 million, after accounting for a USD 5.8 million reversal in impairment loss as disclosed in Q3 2015 Interim Report.
- In 2015, arising from the improved performance, the cash sweep mechanism under the loan agreement was activated. Excess cash amounting to USD 9.6 million was used to pay down the loan in addition to the USD 4.0 million regular loan amortisation.
- The actual financial performance for 2015 was generally in line with revised expectations of the Board, as indicated in Q3 2015 Interim Report.
- For 2016, barring unforeseen circumstances, the Group’s performance is expected to be similar to 2015’s performance (not taking into account any reversal or write-down of impairment loss).
Forecast for 2016:
- For 2016, 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 the rates in 2016 are forecasted to remain on par with the actual rates in 2015, 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 33.0 – USD 36.0 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 17.0 – USD 20.0 million.
- The result before tax is expected to be between USD 7.0 – USD 9.0 million. This outlook for 2016 does not take into account any further reversal of impairment loss nor any write-downs of vessels’ carrying value unless significant weakness in the product tanker sector sets in.
- The Group is expected to meet the various covenants imposed under the loan agreement during this period.
As an attractive platform for growth, the Board continues to seek and assess suitable investment and consolidation opportunities to expand the Company.
For further information please contact:
Knud Pontoppidan, Chairman of the board, Nordic Shipholding A/S: +45 39 29 10
