May 30, 2017
NORDIC SHIPHOLDING A/S
Company Announcement: 04/2017
Published via NASDAQ OMX on May 30, 2017
Q1 Result 2017
Chairman Knud Pontoppidan comments:
“In line with expectations the softer tanker market continued in the first quarter of 2017 with a decrease in TCE revenue from USD 8.5 million in first quarter 2016 to USD 6.8 million in first quarter of 2017. First quarter of 2016 was the last strong quarter before the tanker market softened. This led to a close to zero result for first quarter of 2017 compared to a profit of USD 1.5 million for the same period last year.”
Summary
The comparison figures for period ended 31 March 2016 are stated in parenthesis.
In Q1 2017, the average daily Time Charter Equivalent (“TCE”) rate earned by the vessels in the two pools was marginally lower than the forecasted daily rate, whilst the LR1 vessel (Nordic Anne) tracked the forecasted daily rate.
Expenses relating to the operation of vessels in Q1 2017 inched up to USD 4.0 million (USD 3.8 million) mainly due to increased expenditure on spares and repairs of vessels.
EBITDA fell to USD 2.3 million (USD 4.2 million) due to the reduction in TCE revenue and higher vessel operating cost in Q1 2017.
The Group did not make any impairment nor reversal of impairment during the quarter.
After accounting for depreciation, interest expenses and other finance expenses, the loss after tax in Q1 2017 was USD 0.2 million (profit after tax of USD 1.5 million).
Under the loan agreement, cash in excess of USD 6.0 million will be used to pay down the loan facility. As the cash balance did not exceed USD 6.0 million, there was no cash sweep for this quarter (cash sweep of USD 2.7 million), in addition to the regular loan amortisation.
Between 31 March 2016 and 31 March 2017, equity decreased from USD 45.6 million to USD 39.1 million as a result of the cumulative loss during the period. Consequently, the equity ratio decreased from 34.3% to 33.0% between 31 March 2016 and 31 March 2017.
During the financial period, cash flow generated from operations was USD 1.3 million (USD 3.8 million) mainly from earnings by the two pools and time-charter income received for Nordic Anne, offset by payment of periodic interest expenses on the term loan. During the financial period, the Group did not invest in dry-docking (USD 0.2 million). The Group made a partial repayment of USD 1.7 million (USD 4.0 million, including a USD 2.7 million cash sweep) on the term loan facility.
As at 31 March 2017, cash and cash equivalents was USD 4.6 million (USD 6.3 million).
For 2017, the 5 handysize vessels are expected to 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). We will explore employment options during H2 this year.
As indicated in the 2016 Annual Report, 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 Board will look at growth and consolidation opportunities that are accretive to the Company.
For further information please contact:
Knud Pontoppidan, Chairman of the board, Nordic Shipholding A/S: +45 39 29 10 00
