March 31, 2017
NORDIC SHIPHOLDING A/S
Company Announcement: 01/2017
Published via NASDAQ OMX on March 31, 2017
Nordic Shipholding A/S – Annual Report 2016
Chairman Knud Pontoppidan comments:
“Nordic Shipholding’s 2016 performance was in line with the revised guidance disclosed in Q3 2016. Despite the weak freight market which stretched over mainly the last 3 quarters, the Group posted a modest profit of USD 0.3 million for 2016. However, a one-time recognition of an impairment of
USD 5.1 million – being part of the USD 5.8 million impairment reversed in 2015 – led to a loss of
USD 4.8 million for the year.”
Summary
Nordic Shipholding A/S incurred a net loss after tax of USD 4.8 million in 2016 due to a weakening in the market that started in Q2 2016 continued through the rest of the financial year and a one-off impairment of USD 5.1 million on the handysize vessels deployed in the various pools. The result was in line with the revised expectations as indicated in Q3 2016 Interim Report. Excluding this one-off impairment of USD 5.1 million (2015: reversal of impairment of USD 5.8 million), the Group generated a modest profit of USD 0.3 million for 2016 (2015: USD 7.8 million).
The Board of Directors of Nordic Shipholding A/S has approved the Annual Report for 2016 on
March 31, 2017.
2016 in brief:
- The Group with its six vessels, continues to be a tonnage provider in the product tanker segment in 2016. The five handysize tankers were successfully and without any loss of time transferred to the UPT Handy Pool (Nordic Agnetha, Nordic Amy and Nordic Ruth) and Hafnia Handy Pool (Nordic Pia and Nordic Hanne). The 73,000 dwt LR1 Nordic Anne is fixed on a 3-year time-charter which will expire in November 2017.
- Gross revenue earned by the 6 vessels reached USD 35.7 million, which resulted in a TCE revenue of USD 27.7 million and an EBITDA of USD 10.8 million. Equity totalled USD 39.4 million and equity ratio reached 32.7%.
- The weaker performance as compared to FY2015 was primarily due to lower than forecasted daily TCE income from the vessels deployed in the various handysize pools. The TCE revenue from the 3-year time-charter locked in for Nordic Anne tracked the forecasted daily rate.
- After accounting for depreciation and financial income and expenses, the Group generated a modest profit of USD 0.3 million. However, an impairment of USD 5.1 million recognised in Q3 2016 resulted in an after tax loss of USD 4.8 million for the full year.
- In the first quarter of 2016, the cash sweep mechanism under the loan agreement was activated. Excess cash amounting to USD 2.7 million was used to pay down the loan in addition to the USD 5.0 million regular loan amortisation.
- The actual financial performance for 2016 was in line with revised expectations of the Board, as indicated in Q3 2016 Interim Report.
Forecast for 2017:
- Based on current estimates and barring unforeseen circumstances, the Group is forecasting to breakeven or to post a modest profit (not taking into account any reversal or write-down of impairment).
- The 5 handysize vessels will remain commercially deployed in the UPT Handy Pool and Hafnia Handy Pool respectively. The current time charter for the LR1 vessel will expire in November 2017 (if the charterer does not exercise its one-year extension option). The current plan is to continue deploying the vessel in the time charter market. The projected TCE revenue from the 5 product tankers in the pools and the income from the LR1 vessel are expected to be in the region of USD 25.5 – USD 28.5 million.
- After accounting for 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 8.0 – USD 11.0 million.
- The result before tax is expected to be between USD -1.0 – USD 1.0 million. This outlook for 2017 does not take into account any write-downs of vessels’ carrying values.
- The Group is expected to meet the various covenants imposed under the loan agreement during this period.
The Board will look at growth and consolidation opportunities that are accretive to the Company. The Company believes that the experience and expertise of the Board, coupled with the financial strength of the majority shareholder will result in compelling opportunities.
For further information please contact:
Knud Pontoppidan, Chairman of the board, Nordic Shipholding A/S: +45 39 29 10 00
