Key figures of first half-year of 2013

Transcription

1 Half-year report 2013 Interim Group Management Report A half-year report 2013

2 Key figures of first half-year of 2013 Key performance indicators for the Rickmers Group in million H H H vs. H Revenues % EBITDA % EBIT % Net income % Cash flow from operating activities % in million 30/06/ /12/ /06/13 vs. 31/12/12 Balance sheet total 2, , % Equity % Equity ratio in % pp Net debt 1, , % Number of employees 1 3,201 3, % Maritime Assets in million H H H vs. H Revenues % EBITDA % EBIT % Number of employees (prior year as at 31/12) % Maritime Services in million H H H vs. H Revenues % EBITDA % EBIT % Number of employees 1 (prior year as at 31/12) 2,836 3, % Rickmers-Linie in million H H H vs. H Revenues % EBITDA % EBIT % Number of employees (prior year as at 31/12) % 1 Including employees at sea from external crewing agencies

3 The Rickmers Group is an established international provider of services for the shipping industry with its business segments Maritime Assets, Maritime Services and Rickmers-Linie. We have a reputation for reliability, quality and efficiency. Adaptability and an entrepreneurial mind-set have been a family tradition at Rickmers throughout its 179-year history. We operate a fleet of 92 ships, with over 2,680 seafarers and currently around 500 staff ashore. The group of consolidated companies comprises 113 firms. Rickmers is internationally represented through more than 20 offices and over 50 sales agencies. This network and a strong global management team secure the success of the company which remains true to its core values: Leadership. Passion. Responsibility. Contents 2 Foreword 4 Rickmers Bond 6 Interim Group Management Report 17 Interim Consolidated Financial Statements 32 Further Information

4 2 Foreword Rickmers Group Foreword Bertram R. C. Rickmers Chairman Rickmers Group Ronald D. Widdows CEO Rickmers Group and CEO Rickmers-Linie Dr. Ignace Van Meenen Deputy CEO and CFO Rickmers Group Ladies and Gentlemen, Dear Business Partners, Market conditions continue to be challenging due to the combination of general economic turmoil globally and the structural oversupply of capacity that affects all sectors of shipping. Freight rates as well as short-term charter rates reflect this difficult environment, which is likely to continue for some time. Rickmers own portfolio of vessels with a weighted average charter tenor of about five years with our larger assets of 13,100 TEU loading capacity under residual charter tenors of approximately eight years continues to insulate the Group from much of the volatility in the short-term charter market, and, as a result, cash flows from our asset business have remained stable. Unavoidably, the overall market conditions do have some effect on the Rickmers Group. However, in spite of the challenging environment, which has impacted the heavylift/project cargo business of Rickmers-Linie, the Maritime Assets and Maritime Services segments continue to make a substantial and stable contribution to Group business. This enabled the Group s H1 results for 2013 to remain positive with consolidated revenue of million and profit from operating activities (EBIT) of 37.7 million having been achieved. An important milestone in the past half-year was the successful issuance of the first Rickmers bond which now trades on the Frankfurt Stock Exchange, bringing Rickmers Holding to the capital markets for the first time. In fact, this is a first for the German shipowning sector in the small to mediumsized enterprises segment, and with a volume of 175 million, also one of the largest issues in this segment.

5 Half-year report 2013 Foreword 3 The transformational work that we began nearly two years ago creating a new financial structure, systems and controls, and a new approach to governance and compliance has enabled the Group to successfully open up this new option and represents an essential instrument for us in the further pursuit of our long-term growth strategy and in tapping the opportunities that arise in the market in the short term. In the Maritime Assets segment, we are pursuing a multi-level growth strategy. We are advancing newbuild projects, for example by offering our expertise and associated services to a private equity investor to build 5,400 TEU container ships, and are acquiring assets from the secondary market at attractive prices, as we recently purchased five 2,200 TEU geared ships a segment we expect to be in high demand when markets begin to recover and which adds to the portfolio of ships managed by our Maritime Services segment. We will also grow the Maritime Services business segment in the future by expanding our services for third parties, recently bringing three 1,700 TEU container ships owned by the China Navigation Company under Rickmers ship management, for example; a further five 4,700 TEU container ships from Hanseatic Lloyd will follow in H In spite of very demanding industry conditions for the heavylift/project cargo sector, we have continued our focus on expanding the scope of services and products with the launch of our new Westbound Round-The- World Service, which adds scope to the Rickmers-Linie service offering in Asia/Africa/South America. This service also enables Rickmers-Linie to offer capability in some key intra-asia lanes as well. In addition to new services, the Group has continued to invest in capabilities across our network of offices, establishing an own office in Singapore and adding general management and sales staff in Asia, the US and Latin America to complement our strong presence in Europe. Financial results for Rickmers-Linie in H were negative and reflect the effects of soft market conditions in a number of key trade lanes (Europe to Asia in particular) which have negatively impacted utilisation levels and ongoing freight rate pressure due to oversupply of heavylift capacity and competition for heavylift and breakbulk cargoes from other sectors also struggling with utilisation gaps, such as the container sector. We envisage these challenging market conditions continuing for some time and the situation will only improve as the oversupply begins to work itself out over the next few years. The Group maintains its view that this business will see recovery as the structural oversupply in the sector resolves itself over the next two years, that the pace of consolidation in the sector will continue and that over the longer term significant opportunities will exist in the heavylift/project cargo space. Yours sincerely, Bertram R. C. Rickmers Ronald D. Widdows Dr. Ignace Van Meenen

6 4 Rickmers Bond Rickmers Group Rickmers Bond 1 Trend on the Global Bond Markets According to Thomson Reuters, the total volume of corporate bonds issued in the first half-year of 2013 amounted to roughly USD 3 trillion, a slight downturn year on year and the lowest value within a first half-year since In contrast, within this overall volume, the volume of issues in the corporate bond segment without investment-grade rating (high yield) increased sharply. In the first half-year, highyield bonds totalling USD billion were issued worldwide, up 49 percent compared to the first six months of the prior year. This is an all-time high for issues in the first half-year since Thomson Reuters first started recording such data in Trend in SME Bonds in Germany At stock exchanges in Frankfurt (Entry/Prime Standard), Stuttgart (Bondm) and Düsseldorf (der mittelstandsmarkt) a total of 17 new SME bonds were placed in the segment for medium and small-sized enterprises between January and June At 630 million, this is a record since the first SME bonds were issued in Germany in The bond index MiBoX (Micro Bond Index), which maps the prices of SME corporate bonds listed on German markets, started 2013 at points. Despite relatively high volatility, the index followed an upward trend, reaching its current high for the year of on 31 May. At the end of the period under review the index closed on 28 June at , up 1.9 percent on the year. 3 The Rickmers Bond On 5 June 2013, placing was prematurely concluded on the first corporate bond issued by Rickmers Holding GmbH & Cie. KG. At an annual interest rate of percent, the issue volume amounted to 175 million. Since 6 June 2013, the bond has been traded on the Frankfurt Prime Standard for corporate bonds on a when-issued basis with a term of five years and has been officially listed since its date of issue of 11 June Since trading commenced, the Rickmers bond has moved back and forth around the issue price and closed trading at the end of H at The price has now stabilised above the 100-percent threshold, amounting to percent at the close of trading on 28 August, when this report was compiled. The yield at this point in time equated to around 8.84 percent. Price and trading volume Price in % Trading volume in thousand (nominal, accumulated 5 days' trading) ,500 9,000 7,500 6,000 4,500 3,000 1, /06/13 14/06/13 21/06/13 28/06/13 05/07/13 12/07/13 19/07/13 26/07/13 02/08/13 09/08/13 16/08/13 23/08/13 0

7 Half-year report 2013 Rickmers Bond 5 Average daily volumes traded between 6 and 28 June in Frankfurt amounted nominally to 785,000, with the usual significant levels of turnover in the initial days trading having exceptionally high effects. Taking into account the period until 28 August, the daily nominal trading volume averaged 344, Investor Relations The Rickmers Group pursues ongoing dialogue with investors and players on the capital market. While the Rickmers bond was being placed, the management team personally contacted a number of investors as part of a roadshow. Since then contact points for Investor Relations are available to deal with queries and requests for information. In addition, pertinent information relating to the company and the bond can be retrieved from the website of the Rickmers Group ( The company is looking to maintain open dialogue with the capital market as part of capital market conferences and discussions with investors and is going to provide regular information on current trends within the company. Investor Relations Contact: Rickmers Group Neumühlen 19, Hamburg Prof. Dr. Mark-Ken Erdmann Deputy CFO Tel.: Fax: mk.erdmann@rickmers.com Frank Bünte Chief Treasury & Risk Officer/Head of Capital Markets Tel.: Fax: f.buente@rickmers.com 5 Bond profile Issuer Volume Interest rate Rickmers Holding GmbH & Cie. KG 175 million percent p.a. Term 5 years (from 11 June 2013 to 11 June 2018) Rating BB (Creditreform Rating AG, May 2013) Denomination 1,000 Minimum investment 1,000 ISIN Securities identification number (WKN) Stock market code DE000A1TNA39 A1TNA3 RC1H Subscription period 27 May to 5 June 2013 (17.00) Freiverkehr of the Frankfurt Stock Exchange (Open Market, Entry Standard), with participation in Inclusion to trading the Prime Standard for Corporate Bonds Start of trading Trading on when-issued basis on 6 June 2013/Date of issue: 11 June 2013 Issue price 100 percent Interest payments Annually, subsequently on 11 June of each year (initially on 11 June 2014) Repayment 11 June 2018 Status Right of cancellation Applicable law Securitisation Prospectus Sole global coordinator and sole bookrunner Co-lead manager Capital market partner and financial advisor Unsubordinated, unsecured (negative pledge for new capital market liabilities) No ordinary right of cancellation on behalf of the issuer, creditor s right of cancellation, amongst other things for change in control and in other cases described in the terms and conditions German law Global securitisation at Clearstream Banking AG, Frankfurt am Main Prospectus approved by CSSF (Luxembourg), with notification issued to the German Financial Services Regulatory Authority (BaFin) and Austrian Financial Market Authority (FMA) Close Brothers Seydler Bank AG, Frankfurt am Main TUSK Capital Management Ltd., London Conpair Corporate Finance GmbH, Essen

8 6 Konzernzwischenlagebericht Interim Group Management Report 7 The Rickmers Group 7 Economic Environment 10 Business Performance 11 Financial Performance 12 Cash Flows and Financial Position 13 Employees 13 Risk and Opportunity Report 14 Events after the Reporting Date 14 Forecast

9 Half-year report 2013 Interim Group Management Report 7 1 The Rickmers Group 2 Economic Environment 1.1 Business operations 2.1 Overall economic situation The Rickmers Group is an established international provider of services for the maritime industry, vessel owner and ocean carrier. The Rickmers Group s business is divided in the business segments Maritime Assets, Maritime Services and Rickmers-Linie. In the business segment Maritime Assets, the Rickmers Group acts as an asset manager for its own and thirdparty vessels and initiates and coordinates vessel projects, arranges financing, acquires, charters out and sells vessels. The segment Maritime Assets also comprises the vesselowning companies of Rickmers Group. In the business segment Maritime Services, the Rickmers Group provides ship management for the Rickmers Group s own and third-party vessels, including technical and operational management, crewing, newbuild supervision and advisory and insurance-related services. In the business segment Rickmers-Linie, the Rickmers Group offers global breakbulk, heavy lift and project cargoes liner services (such as the Round-The-World Pearl String Service) and individual sailings complementing the liner services. The fleet operated in this segment consists of multi-purpose heavy lift vessels with onboard cranes. As the group parent company, Rickmers Holding provides its business segments with interdisciplinary services and serves as a management holding company for the Rickmers Group. Amongst other things, this means acquiring, holding and selling investments in other shipping companies and related maritime businesses. Moreover, Rickmers Holding manages financing for the business segments. Steady growth in global economy despite risks According to the World Trade Organization (WTO), production indicators, corporate sentiment and the employment situation in the first quarter of 2013 combined to paint a mixed picture where economic conditions are concerned. In its report published in July 2013, the International Monetary Fund (IMF) forecast annual growth of 3.1 percent for the global economy in Based on developments during the first half year of 2013, this is in line with the previous year (2012: 3.1 percent). At the beginning of the current calendar year, the IMF assumed that the global recovery would gather momentum for the remainder of this year and throughout next year. However, towards the middle of the year, economic prospects weakened. As reasons for this, the IMF named, amongst other things, the deepening recession in Europe, a slowdown in the pace of growth in the emerging economies and additional risks in the US that could arise from exiting its loose monetary policy. By contrast, the IMF raised its forecasts for Japan: this year the Japanese economy is expected to grow by 2 percent, up from the 1.5 percent the IMF was still forecasting in April The growth reflects the positive effects of the new Japanese government s expansionary monetary and fiscal policy. Weakened momentum in growth markets In its July report, the IMF anticipated growth of 5.0 percent for emerging and developing economies, including the four BRIC states (Brazil, Russia, India and China). Compared to its January forecast, this correction is based among other things on falling prices for raw materials and declining demand in the more advanced economies.

10 8 Interim Group Management Report Rickmers Group 2.2 International trade Trade growth paints mixed picture Purchasing managers indices indicate that the downswing in the eurozone is picking up pace despite Germany s resili - ence. At the same time, the US recorded a strong upswing in manufacturing. By contrast, Japan and China recorded only modest growth in production. Overall, these indicators point to weak import demand in Europe, despite the gradually improving conditions. Given the significance of the EU for worldwide imports, the WTO anticipates a slowdown in the growth in world trade for the first half of Container shipping grows and overcapacity Clarkson Research has revised its growth forecasts for container ship-borne international trade downward for the fourth time this year and currently expects growth of 5.0 percent. Maersk is only expecting growth in the global demand for container shipping to reach between 2 and 4 percent. Current trade statistics indicate that market recovery is unlikely in the coming months. The latest figures from Container Trade Statistics indicate that container volumes on main routes will not rise above the figure for the first quarter of the previous year. Following a downturn in imports of 4 percent in 2012, European import volumes again fell below pre-crisis levels of In brief, it is clear that the market has failed to absorb the numerous mega container newbuild deliveries of the past few years. European imports in general and the trading routes between Asia and Europe in particular were largely affected by overcapacity. Analysts are assuming that 2012 marked a turning point for Chinese trade and highlight falls in Chinese exports as a sign that globalisation and outsourcing have passed their peak. In-sourcing back to Europe and the USA and nearsourcing to Eastern Europe and Mexico have dampened the growth in Chinese exports over the last year. This raises fears that a structural downturn could occur in both Asia Europe and transpacific traffic. 2.3 Developments in the industry Freight rates falling Following a difficult 2012 which saw the majority of container lines posting an operating loss for the second year in succession, the profitability of container lines in the first half of 2013 was again under pressure. In the last three months of this period, freight rates from Asia to northern Europe plummeted by over 60 percent, falling from USD 1,400 per TEU mid-march to just USD 530 by the end of June the lowest rates since 2011 and also their steepest fall. By the end of July, freight rates from Asia to Australia and Brazil had reached an all-time low. This drop in freight rates from Asia to northern Europe is likely to have a significant effect on the financial results of container lines in the second quarter, following a first quarter in which their performance was already mixed. Also, freight rates attained for heavylift, breakbulk and project cargoes remained below their average levels. This was due in part to the low prices paid for raw materials, which have, in particular, led to a slowdown in mining investment. In addition, competition from other shipping segments intensified in the light of sustained low freight rates for containers and bulk cargo. Small tonnage charter rates rise At the beginning of 2013, the trend in charter rates for the container segment was similar to the previous year. Historically, rates remain low, despite the small upwards movements across a range of segments witnessed over the past few months. The proportion of laid-up vessels held by tramp shipping companies continues to put pressure on the charter market. The market is still far from being balanced and far from developing a new impetus. In post-panamax segments there is currently a scarcity of capacity, at least where tramp shipping companies are concerned. On the other hand, there are some container lines that are willing to sub-charter out their own tonnage. This picture is likely to continue up to the end of the year, limiting the time charter rates that can be achieved. The order book for this segment will put pressure on the balance between supply and demand for the remainder of the year, especially as container lines favour deploying their largest newbuilds.

11 Half-year report 2013 Interim Group Management Report 9 Larger Panamax wide-beam designs of 4,600 to 5,000 TEU achieved significantly better charter rates than traditional Panamax vessels. This increase in charter rates could not be carried over to the smaller Panamax sizes. Such vessels are the first to be pushed out from firm employment to make space for a line s own vessels or those with longer-term employment. Given the limited order book for sub-panamax sizes of between 1,300 and 3,000 TEU with their relatively advanced age profile, the related high level of ship breaking and the continued commercial necessity to deploy units of this size, there has been a shortage of tonnage in some regions in the last few months. Bunker prices constant higher rates for energy-efficient vessels Bunker prices were stable on a high level over the first few months of Shipping companies recognise the bene fits of ordering more economical vessels. They are also aware of the fact that it takes time for a critical mass of vessels with these specifications to become available on the market. The positive difference in rates that can be achieved by modern, energy-saving tonnage will widen even further in the future with the imminent arrival of ever more economical newbuilds. For example, based on a bunker price of USD 750 per tonne and assuming cruising speeds of 19 knots, the classification society Germanischer Lloyd estimates that new, fuel-efficient 9,000 TEU vessels are 35 percent more cost-effective. 380 CST bunker prices (Rotterdam) in USD per tonne / / / / / / / / /2013 Favourable order book/fleet ratio The container ship fleet grew by a modest 2.7 percent (0.43 million TEU) in the first half of By the end of the first half of the year, the order book relative to the fleet at sea was at an extremely low level (19.5 percent). Therefore, it should be possible to achieve a balanced supply-demand structure in the coming years. Howe Robinson has calculated that the cost of newbuilds is today at an historic low, and consequently ascribe the latest wave of container ship orders to this fact. Clarkson Research estimates that prices of newbuilds have bottomed out; a further significant price fall is not expected. In fact, given the increasing number of orders for newbuilds, prices could rise again soon. Feeder ships in demand on the second-hand market The mood in the second-hand market remains upbeat. Financially strong European buyers are waiting for the right sales candidates. There is a clear preference for vessels of 1,100-2,500 TEU with lifting gear. The prices in many sectors are at an historic low. Nevertheless, many market players have become increasingly critical about purchasing Panamax tonnage - even attractive saleand-charter-back projects or financially tempting transactions initiated by banks are not finding sufficient takers in this segment. On the other hand, healthy demand in the sub-panamax segment is starting to push second-hand prices up. Scrappings reduce laid-up fleet In total, 232,000 TEU went for scrap in the first half of By the end of the year, scrappings will probably total 450,000 TEU (2.5 percent of the fleet). This would represent a rise of 80,000 TEU on the previous all-time high of There is a tendency to scrap younger (16-20 years old) and larger (2,000-4,000 TEU) vessels. USD per tonne Source: Clarkson Research based on data from OceanConnect

12 10 Interim Group Management Report Rickmers Group The number of laid-up container ships fell in May to below 200 units and is presently at the lowest level since October Total tonnage laid up halved over the last three months. High ship breaking levels for vessels from non-operating owners and increased charter activity cut the share of non-operating owners in the laid-up fleet in May to just 57 percent, the lowest level for nearly one year. Surplus of vessels over 7,500 TEU The growth in the container fleet is expected to exceed growth in demand for transport capacity slightly in the current year. The distorted order book with an excess of orders for vessels over 7,500 TEU combined with weak trading volumes on main routes means a tough fight for profitable freight rates for container lines. The continuing shortage of orders for smaller newbuilds combined with high scrapping rates is likely to lead to a gradual shortage of tonnage in traditional charter market sizes below 4,000 TEU. Steady trend in heavylift segment There is no unique indicator to assess the Rickmers-Linie field of business, which comprises embraces breakbulk, heavylift and project cargoes. Therefore the focus on global investment activities, which by and large have remained stable, has shown itself to be reliable. The World Investment Report 2013 reveals that initial indicators for the first quarter of 2013 point to a lower level of available liquid funds from large transnational enterprises year on year. The data on new investments and inter national M&A in the first few months of 2013 has not revealed any upwards trend. 3 Business Performance 3.1 Statement from the management The markets we are engaged in continue to be dominated by uncertainty and dampened demand. Despite the weak state of the market, the Rickmers Group bettered its financial performance at operational level in the first half of Although consolidated revenue fell slightly by 4.4 percent to million, profit from oper ating activities before depreciation and amortisation (EBITDA) rose by 13.1 percent. However, without the support ive special effects from the prior year, EBIT sank by 29.1 percent to 37.7 million (2012: 53.2 million). 3.2 Significant events The Rickmers Group successfully placed a corporate bond on the Frankfurt Stock Exchange. Details can be found on pages 4 and 5 of the half-year report The subgroup Rickmers Maritime, Singapore, raised capital amounting to 62.4 million in H The Rickmers Group participated in the transaction in proportion to its 33.1 percent stake in the company with the increase in capital stock being concluded on 27 May Maritime Assets In the period under review, the Maritime Assets segment pursued a range of activities to tap market opportunities arising from consolidation within the industry. This led, for example, to the purchase of five 2,200 TEU vessels. Because the legal transfer of the vessels took place in July 2013, they will only be included in the Rickmers Group s scope of consolidation for the first time in the 2013 annual financial statements. Moreover, in the period under review Maritime Assets oversaw the disposal of 20 KG-fund vessels on behalf of the KG-fund. This measure helped to remove the older container ships from the fleet of KG-fund vessels.

13 Half-year report 2013 Interim Group Management Report 11 Maritime Services Maritime Services supported the sale of 22 KG-owned vessels while at the same time taking over the management of a further two vessels, bringing the total fleet under management by Maritime Services to 89 by the end of H In the period under review, Maritime Services decided to re-establish Rickmers Marine Agency Philippines as part of their own crewing network. Furthermore, the segment continuously works on processes and procedures to further strengthen operational performance, including energy efficiency, and cost efficiency. Furthermore, Rickmers Shipmanagement Singapore Pte. Ltd., Singapore, has relocated to new premises. Rickmers-Linie Since the first quarter of 2013, Rickmers-Linie has been offering a westward bound liner service that currently deploys three multi-purpose heavylift freighters to connect Asia with South and North America. In addition, two other vessels were chartered to expand the Europe-India service and to ensure the scheduling reliability of the eastbound Round-The-World Service. By contrast, two vessels whose charter contracts expired during the course of the reporting period were returned to the charter operator. The first half of 2013 saw a significant expansion in Rickmers-Linie sales activities, particularly in Asia and in North and South America: on the one hand, a dedicated office was opened in Singapore; on the other hand, sales agents were appointed for Hong Kong, south and central China. Sales points were also established in New York and Chicago. Furthermore, preparations were made to appoint a sales agent in Brazil. In the period under review, competition in breakbulk/ project cargoes increased because of container lines, which resulted in lower utilisation of capacity, particularly in europe-asia and in Asia-America traffic. The sluggish Chinese economy and the strained economic environment in the USA contributed to a decline in demand for transports to and from China. 3.3 Changes to the scope of consolidation In the first half-year of 2013, the following companies were added to the group of consolidated companies of the Rickmers Group in the course of their full consolidation: 1. Rickmers Asia Pte. Ltd., Singapore, brings together the holding functions of the Rickmers Group in Singapore. 2. Rickmers-Linie (Singapore) Pte. Ltd., Singapore, was included as part of the strengthening of the business in Asia. In order to achieve improvements in process organisation, ESSE Expert Shipping Service GmbH & Co. KG, Hamburg, was reassigned from the Maritime Services segment to Maritime Assets. 3.4 Key personnel changes On 10 January 2013, Björn Sprotte was named Global Head of the business segment Maritime Services. He succeeds Jens Lassen who has left the company. 4 Financial Performance 4.1 Performance data In the period under review, the number of Group-owned vessels in the fleet remained unchanged at 53. Due to sales of KG-fund vessels, the size of the fleet managed by the Maritime Assets segment contracted by 20 down to 29. The on-going sales process helped to remove older container ships from the fleet. In the light of sales of KG-fund vessels, the number of ships managed by Maritime Services also fell. The average availability of ships in the first half of 2013 was 98.5 percent, or approximately 180 days. The transport volumes of breakbulk, heavylift and project cargoes at Rickmers-Linie amounted to 0.9 million freight tonnes, which Rickmers-Linie carried using 18 long-term charter vessels and up to a further 7 additional charter ships.

14 12 Interim Group Management Report Rickmers Group 4.2 Revenues The Rickmers Group achieved revenue of million, slightly down on the same period of the prior year (-4.4 percent). The Rickmers-Linie ( 91.7 million, percent) and Maritime Services ( 22.9 million, percent) segments suffered falls in revenue. Rickmers- Linie suffered from the effects of weak freight rates and falls in capacity utilisation during the first half-year. At Maritime Services, the planned sale of old KG-vessels was apparent. By contrast, the Maritime Assets segment grew revenue by 19.0 percent. This is largely attributable to the complete inclusion of the Rickmers Maritime sub-group, which, within the scope of its transitional consolidation on 23 April 2012, contributed to the comparable period of the previous year for just two months. Revenue generated by third parties by segment, H in million 4.3 Earnings EBITDA of the Rickmers Group increased year on year by 13.1 percent to million (2012: 95.7 million) with the EBITDA margin rising 5.8 percent points to 37.5 percent (2012: 31.8 percent). However, the positive trend in EBITDA did not carry through to the other earnings levels. Thus, EBIT fell from 53.2 million last year to 37.7 million (-29.1 percent). Net income for the Rickmers Group also declined (-85.6 percent), amounting to 1.6 million (2012: 11.1 million). The decrease in Group net income is largely attributable to the deterioration in Rickmers-Linie earnings and the non-recurring expenses incurred in issuing the Rickmers Group s first corporate bond. Additionally there was also the increased impact of interest expenses of 6.5 million compared to the first half of Expenses arising from impairments on receivables and other assets relating to KG-vessels were significantly lower due to the advanced sales. This was also supported by the reversal of trade tax provisions of 12.9 million (32%) (60%) Maritime Assets Maritime Services Rickmers-Linie 5 Cash Flows and Financial Position 22.9 (8%) Revenue generated by third parties by segment, H in million 5.1 Balance sheet total The balance sheet total for the Rickmers Group rose by 88.1 million, or 3.2 percent, to 2,853.1 million. 5.2 Assets (34%) (48%) Maritime Assets Maritime Services Rickmers-Linie The assets side of the balance sheet is dominated by the value of the fleet which, at 2,493.0 million, is 33.0 million (-1.3 percent) below the value of 31 December This is due to depreciation and currency effects. Financial assets fell by 2.8 million to 19.7 million (17%) Given the rise in liquidity, current assets increased by million (62.6 percent) to million. The key reason for this growth lies in the net cash generated by the bond of million.

15 Half-year report 2013 Interim Group Management Report Equity and liabilities Equity rose by 47.0 million, or 6.5 percent, to million. This is primarily attributable to the minority interest in the capital increase carried out by the Rickmers Maritime sub-group in the first half-year The equity ratio rose nearly one percentage point to 26.9 percent (2012: 26.0 percent). Overall, liabilities increased slightly from 1,956.1 million at the end of 2012 to 2,011.5 million, or 2.8 percent ( 55.4 million). Liabilities to banks fell by million (-6.5 percent). At the same time, gross debt rose by million due to the issuance of the corporate bond. At 66.5 percent, the debt-equity ratio, based on interestbearing loans from banks and bondholders in relation to the balance sheet total, remained virtually unchanged compared to the 2012 value of 66.6 percent. 5.4 Cash Flows Overall, cash in hand and credit balances at banks rose in the reporting period by million to million (30 June 2012: 80.7 million). Cash and cash equivalents at the beginning of the period amounted to 73.1 million. Cash flow from operating activities amounted to 43.8 million in the first half-year While the Maritime Assets segment was able to generate a positive operating cash flow from charter revenue and asset management fees of 68.7 million, the Rickmers-Linie segment incurred a negative operating cash flow of -7.9 million. In add ition, the Other segment, which comprises holding functions, posted a negative operating cash flow of million. The positive cash flow from investing activities of 24.4 million (2012: 3.1 million) was heavily influenced by the payment of refunds for cancelled orders for ships amounting to 45.7 million. 6 Employees The Rickmers Group had an average of 3,201 employees, including people employed at sea, in the first half-year 2013 (2012: 3,494). The decrease in staff is due primarily to the sale of KG-fund vessels and the related decline in the numbers of seafarers. Staff changes, 2011, 2012 and H ,000 3,500 3,000 2,500 2,000 1,500 1, Ashore 3,409 At sea 3,494 Crewing agencies 3, First half-year Of the total 3,201 employees, 515 were based on shore and 2,686 at sea. Of the staff employed at sea, 1,884 were employed directly by the Rickmers Group and 802 by crewing agencies worldwide. 7 Risk and Opportunity Report Since the preparation of the Rickmers Group 2012 annual Report, there have been no significant changes to the available opportunities nor any new risks. A detailed presentation is contained in the 2012 Annual Report starting on page 60. The cash flow from financing activities amounted to 66.9 million (2012: million). The most significant drivers of this trend were in particular payments received from the issuance of the bond of million and 41.7 million raised from other partners within the scope of the capital increase at Rickmers Maritime. Payments made to settle financial obligations of million had a countering effect. The Rickmers Group estimates that the following opportunities mentioned in the 2012 Annual Report have become slightly more likely since the end of the year. The likelihood of a further consolidation within the industry has increased due to the ongoing shipping crisis. Thanks to the successful bond issuance and the favourable positioning of the Rickmers Group, the opportunity for the Group to actively exploit this situation has improved.

16 14 Interim Group Management Report Rickmers Group Moreover, the successful issuing of the Rickmers bond on the capital markets opens up additional opportunities for the Rickmers Group to optimise its maturity profile in respect of its liabilities to banks. In some areas, the Rickmers Group views the risks described as being slightly reduced. Business risks have been reduced through the continuing sale of KG-funds during the first half of the year. The risks arising from possible write-downs of these fund companies have hence been reduced. For a selection of five vessels, a process plan was drawn up to avoid insolvency proceedings on behalf of KG-funds. Within the scope of this plan, limited partners will make funds available, amongst other things to cover obligations arising from ship operations, thus avoiding the need for the Rickmers Group to recognise value impairments on receivables and loans to KG-funds vessels. Additional bad debt risks likewise arise from the existing pressure caused by the shipping crisis and the resulting requests for charter reductions. Given the existence of contracts, there is no legal basis for the renegotiation of charters. The changes to insurance tax legislation that have recently been discussed are not being incorporated for the time being. This accordingly reduces the risk for the Rickmers Group. Through the overall assessment of the risk situation, and based on information currently available, it can be stated that no risks exist that would threaten the continued existence of the Rickmers Group. 8 Events After the Reporting Date In August 2013, Rickmers-Linie strengthened its presence in the South American market by appointing a sales agent in Brazil. 9 Forecast 9.1 Overall economic situation Global economy gains momentum Estimates published by the International Monetary Fund indicate that the global economy will probably record a slow recovery during the course of Overall, the IMF anticipates worldwide economic growth of 3.1 percent. For 2014, the Fund is forecasting growth of 3.8 percent. In particular the EU, but also the USA, represent obstacles to faster growth. The IMF sees the eurozone as being in a recession and is anticipating an economic contraction of 0.6 percent, with expectations for 2014 indicating a modest increase of 0.9 percent. While Germany is expected to grow by 0.3 percent this year, major economies such as France, Italy and Spain will continue to shrink. The IMF has forecast US growth of 1.7 percent this year and 2.7 percent next year. The reason for this cautious forecast lies largely in public austerity measures that came into force at the beginning of the year. Emerging economies continue to drive growth Following a fairly muted first half of 2013, the IMF is forecasting growth in real GDP of 1.2 percent for the advanced economies and 2.1 percent in 2014, stabilised by growth in the USA and in Japan. For the emerging and developing economies, the IMF is expecting growth of 5.0 percent in 2013 and 5.4 percent next year. 9.2 International trade Further growth in world trade expected The World Trade Organization has cut its 2013 world trade growth forecast from 4.5 percent to 3.3 percent. Amongst others, the reasons for this were the risks emerging from the eurozone and fears of increased protectionism. The IMF is expecting trade growth of 3.1 percent in 2013 and 5.4 percent in 2014.

17 Half-year report 2013 Interim Group Management Report 15 Growth in secondary routes dominates Where container trade on the Far East-Europe route is concerned, disappointing growth is once again expected due to sustained economic problems in Europe, the key driver for this route. According to DVB Bank, growth in vessel sizes will exceed growth in freight volumes on this trading route for the foreseeable future. The transport market from the Far East to North America also looks to be facing another turbulent year. For the main season this year, capacity on the transpacific route is likely to rise by 6.8 percent. These expansion in capacity is limiting the chances of liner services to push through price increases. The greatest growth in container trade in 2013 will again be found on the secondary routes. Robust demand from emerging economies will lead to the expansion of North- South routes by an anticipated 6 percent this year. The main stimulus for growth has been delivered by intra- Asia, China-Africa and Latin American routes. Another less obvious but promising trade is the routes between Asia and the Middle East. For trade between Asia and the southern hemisphere, Clarkson is projecting strong growth of 7.4 percent. Such growth will help absorb the considerable tonnage driven from the more sluggish main routes. However robust this demand may be, some market observers doubt whether it is sufficient to fully counter the impact of cascade effects (i.e. driving smaller vessel sizes from the market by the deployment of increasingly larger vessels). 9.3 Developments in the industry Shipping lines need greater discipline to increase freight rates According to Drewry, this year s main season will be decisive for the profitability of container lines. They have only a narrow time band in which either to act in a coordinated manner or to run the risk of making heavy losses. Whether shipping companies are able to exert discipline in holding freight rates at a healthy level remains to be seen. As the second quarter has shown, liners are still prepared to allow freight rates to fall to non-profitable levels just to guarantee their ships sail at capacity. The industry could therefore be heading towards a new rates war. We estimate that more than 2,000,000 TEU need to be removed from the market to lift freight rates in the long term. Overcapacity remains in focus The ratio of order book tonnage to at-sea tonnage is expected to fall to around 16 percent by the end of the year. This assumes that 300,000 to 350,000 TEU of planned deliveries will be postponed from 2013 to the following year. The long-standing excess supply of container tonnage represents a constant threat to the financial situation of the industry. To date, this threat has been countered by a combination of slow steaming, postponed deliveries, cascading, scrapping and lay-up programmes. The gap between supply and demand in container shipping will probably widen this year. Demand on the main trade routes is expected to grow by 3 percent in 2013, while the worldwide fleet of container ships is expected to grow (taking account of postponed deliveries, cancellation of newbuilds and scrapping) by around 7 percent. The researchers at Danish Ship Finance assume that this supply gap will widen by a further two percentage points in In view of the considerable number of very large container ships of over 10,000 TEU to be delivered in the next twelve months, no significant increase in time charter rates and shipping values can be expected in the short term. It is to be expected that charter rates will gradually improve in 2014 due to the continual increase in scrappings before they break through their long-term historic average in 2015.

18 16 Interim Group Management Report Rickmers Group Further consolidation anticipated Estimates from the World Investment Report suggest that global investment activity will not be significantly greater than in the previous year. In particular, the development of highly promising LNG projects in Australia will not be sufficient to generate the desired cargo volumes. The mood in the American housing market, which is a key factor for the US economy, reached a 7-year high in June, providing a positive outlook for future investment. The associated demand and the possibility of establishing an American-European free trade zone are set to stimulate container and heavylift traffic to the USA. For the coming year, the Rickmers Group is expecting the consolidation of the heavylift, breakbulk and project cargoes market to continue. In its line of business, Rickmers-Linie is looking to strengthen its services by expanding its business, especially in Asia and South America, and by expanding its global network. To enhance its services still further, Rickmers-Linie also intends to increase the number of operating vessels. 9.4 Sales and earnings The Rickmers Group expects that the Group s performance will continue to be affected by the ongoing challenging market environment in the second half of the financial year For the rest of the year, the Maritime Assets business segment is expected to achieve growth in sales, primarily through the acquisition of more vessels in Asset Management. These additional vessels in the Group should have a corresponding stabilising effect on sales and revenue for the Maritime Services business segment in Ship Management, which should compensate for the disposal of KG vessels. In order to stabilise and increase sales, Rickmers-Linie will focus on intensifying sales activities in growth markets and on building on its own sales network in other regions such as Asia, North and South America and the Middle East. 9.5 Financing The successful issue of the corporate bond has secured Rickmers Group s financing. Moreover, the Rickmers Group is exploring and evaluating other financial options that will continue to secure growth. 9.6 Capital expenditures The Group is continuing to analyse investments in attractive newbuilds and second-hand vessels to exploit further opportunities on the market. In particular, we are optimistic about the positive prospects in the 2,000-3,000 TEU size class.

19 Interim Consolidated Financial Statements 18 Consolidated Balance Sheet 20 Consolidated Income Statement 21 Consolidated Cash Flow Statement 22 Segment Reporting 28 Notes

20 18 Consolidated Balance Sheet Rickmers Group Consolidated Balance Sheet as at 30 June 2013 Assets in thousand 30/06/ /12/2012 Fixed assets Intangible assets Purchased concessions, industrial property and similar rights and assets 2, Payments on account 443 2,308 2,598 2,914 Tangible assets Vessels 2,493,023 2,526,045 Other equipment and office equipment 3,432 3,499 2,496,455 2,529,544 Financial assets Shares in affiliated companies 1,466 1,541 Investments in associated companies 6,228 6,851 Other participations 7,345 8,083 Loans to companies in which the company has a participating interest 2,839 3,584 Other loans granted 1,815 2,445 19,693 22,504 2,518,746 2,554,962 Current assets Inventories Raw materials, consumables and supplies 15,290 14,184 Work in progress Expenses for unfinished voyages 18,093 15,578 Finished goods and goods for resale Payments on account 2,403 1,958./. Payments received -18,466-15,878 17,603 16,104 Receivables and other assets Trade receivables 11,375 9,620 Receivables from affiliated companies Receivables from companies in which the company has a participating interest 15,370 16,244 Other assets 63,488 79,602 90, ,481 Cash and cash equivalents 208,570 73, , ,709 Deferred expenses 15,911 12,681 Deferred tax assets 1,786 2,660 Total assets 2,853,118 2,765,012

21 Half-year report 2013 Consolidated Balance Sheet 19 EQUITY AND LIABILITIES in thousand 30/06/ /12/2012 Equity Subscribed capital 6,405 6,405 Reserve accounts 344, ,359 Withdrawal accounts -85,896-82,699 Retained earnings 158, ,934 Revenue reserves generated 161, ,891 Positive consolidation difference -2,958-2,957 Balance from currency conversion 2,572-2,893 Parent company's income special account -12,280-9,582 Minority interests 351, , , ,512 Difference from capital consolidation 8,063 8,063 Provisions Provisions for pensions and similar obligations 1,458 1,458 Provisions for taxes 4,357 18,054 Other provisions 55,343 53,748 Liabilities 61,158 73,259 Bonds 175,808 0 Liabilities to banks 1,721,635 1,841,897 Payments received on account Trade payables 20,741 20,068 Liabilities to affiliated companies Liabilities to companies in which the company has a participating interest 3,351 3,815 Other liabilities 89,716 89,438 thereof tax liabilites thereof liabilities relating to social security ,011,524 1,956,105 Deferred income 3,464 5,544 Deferred tax liabilities 2,457 2,529 Total equity and liabilities 2,853,118 2,765,012

22 20 Consolidated Income Statement Rickmers Group Consolidated Income Statement for the period from 1 January to 30 June 2013 in thousand H H Revenues 288, ,428 Increase/decrease in finished goods and work in progress 2,533 5,274 Total output 290, ,702 Other operating income From currency conversion 10,463 9,570 Other 15,622 24,311 Cost of materials 26,085 33,881 Cost of raw materials, consumables and supplies -33,946-38,930 Cost of purchased services -106, ,647 Personnel expenses -140, ,577 Wages and salaries -32,732-34,124 Social charges and costs for retirement pensions and other employee benefits -3,160-3,596 Depreciation of fixed intangible and tangible assets -35,892-37,720 Amortisation and depreciation of intangible and tangible assets -67,031-51,952 Write-downs of current assets insofar as this exceeds the company s customary depreciation -2,493 0 Other operating expenses -69,524-51,952 From currency conversion -7,990-9,436 Other -24,590-32,179-32,580-41,615 Subtotal 38,219 50,719 Income from investments Result from associated companies ,974 Income from other securities and long-term loans Other interest and similar income 940 1,110 Write-downs of financial assets -1,036-3,623 Interest and similar expenses -47,907-41,368 Result from ordinary activities -9,233 13,368 Taxes on income 10,833-2,279 Other taxes Group net income/net loss for the year 1,555 11,053