J. Lauritzen A/S Investor Update Interim Financial Report 2016 Q2

Transcription

1 J. Lauritzen A/S Investor Update Interim Financial Report 216 Q2 August 216 Please read the disclaimer placed as the last slide in this presentation. Thank you. Oceans of know-how

2 216 H1: As expected; guidance unchanged - Continued depressed dry cargo markets causes an EBITDA unsatisfactory low - Cash improving initiatives causing additional write-downs, negatively impacting the net results Markets Dry bulk markets (BHSI) on average down 8% on same period last year; despite some improvements in 216 Q2 markets remained at historically depressed levels Vessel values on average down 9% since end-215; Dry bulk down 24%; Small gas carriers down 5% Business Activity: 127 vessels on average in 216 Q2; down 6% on same period last year Cash improving initiatives continued, including reduction in new building programme Mr. Mads P. Zacho appointed new CEO; taking over from Jan Kastrup-Nielsen on 19 September 216 Financials Key messages LTV inclusive undrawn facilities at 73% of market values NIBD of USDm 173 at 44% of market values Cash and committed, undrawn credit facilities stood at USDm 157 Net results of USDm (3.7) in 216 H1; hereof USDm (22.4) in Q2 Up USDm on 215 H1. EBITDA guidance unchanged Baltic Exchange Handysize Index (BHSI) Jan-15 Apr-15 Jul-15 Oct-15 Jan-16 Apr-16 Jul-16 Source: Bloomberg USDm 35 Net interest bearing debt and cash incl. unused RCFs Q1 Q2 Q3 Q4 Q1 Q Net interest bearing debt Cash incl. unused facilites Q2 Interim Financial Report Investor Update

3 216 H1 Net results of USDm (3.7) up on 215 H1 - EBITDA before special items suffered from weak dry cargo markets - EBIT before special items at USDm (47.7), slightly down on 215 H1 1 5 (5) (1) (15) (2) (25) EBITDA per quarter in USDm Q1 Q2 Q3 Q4 Q1 Q Lauritzen Bulkers Lauritzen Kosan Total Comparing H1-216 to H1-215 Income statement 1 st half USDm EBITDA Lauritzen Bulkers (24.9) (34.9) Lauritzen Kosan Not allocated a.o. (4.1) (5.6) EBITDA (18.) (3.1) Sale of assets (.) (.) Depreciation (23.4) (15.2) Joint ventures.3 (2.3) EBITDA down USDm 12.1 to USDm (3.1) Lauritzen Bulkers down USDm 1. to USDm (34.9) Lauritzen Kosan down USDm.8 to USDm 1.4 Depreciation improved USDm 8.2 to USDm (15.2) Due to sale of vessels and impairment losses Special items improved by USDm 93.m to USDm 7. Finance net up USDm 27.4 to USDm 1. Profit from sale of non-strategic assets Operating income (EBIT) before special items (41.) (47.7) Special items (86.) 7. Net financial items (17.4) 1. Results before tax (144.4) (3.7) Tax (.1). Discontinued operations and minorities (.1). Net results (144.6) (3.7) Net results up USDm to USDm (3.7) Q2 Interim Financial Report Investor Update

4 Special items - One-off items: Sale of claims, settlements, compensation for contract termination - Write-downs, impairment losses and provisions Impairment losses related to sales of two owned newbuildings for delivery to new owners ex yard (cash preserving effect) Use of provisions related to onerous contracts (no cash effect) Notable items Break-down of special items Condensed income statement with special items in operating profit USDm 215 H1 216 H1 USDm 215 H1 216 H1 One-off revenue from sale of claims and claim settlements, contract termination Sale of vessels as a consequence of counterparty defaults - - Impairment losses on vessels and vessels under construction (151.6) (16.3) Provisions and use of provisions for onerous contracts Impairment losses on vessels owned by joint ventures (14.9) (5.5) Financial items related to contract termination (3.3) 1. Special items, net (86.) 7. EBITDA 65.9 (.3) Sale of assets. (.) Depreciation and impairment losses (175.) (31.5) Joint ventures (14.6) (7.8) Operating income (123.8) (39.6) Net financial items (2.7) 9. Results before tax (144.5) (3.7) Q2 Interim Financial Report Investor Update

5 Balance sheet at end 216 Q2 - Cash and undrawn committed facilities totaled USDm Net interest bearing debt USDm 173, corresponding to 44.6% of vessel market values Key messages Total assets at USDm 626. down from USDm at year-end 215 Solvency at 37.1% up from 31.5% at year-end 215 NIBD/EBITDA at (2.9); reflecting negative EBITDA Cash including undrawn RCFs USDm up from USDm at year-end 215, Sales of newbuildings has reduced CAPEX commitments on owned newbuildings to nil (down from USDm 9 at year end-215) Two owned new buildings cancelled during 216 Q1 and one part-owned newbuilding cancelled in 216 Q3 A further two owned newbuildings sold during 216 Q2 with delivery to new owners during 216 Q3 ex yard Now remaining: One part-owned newbuilding with delivery pushed into 218 (CAPEX USDm.5 in 217 and USDm 1.5 in 218) Eight time-chartered newbuildings all for delivery 217 Off-balance commitments related to chartered fleet was USDm 61.5 (gross), down USDm 89 or 13% since year-end 215 Further details on slide 14 Balance sheet USDm 215YE 216 Q1 216 Q2 Fixed assets - Vessels a.o Investments in joint ventures Current assets - Assets held for sale Cash * Total assets Equity Non-current liabilities Current liabilities Solvency 31.5% 33.8% 37.1% ROE (62.%) 28.6% (24.4%) NIBD/EBITDA (6.9) (2.5) (2.9) ROIC (32.6%) (.1%) (17.4%) Notes: * Does not include undrawn committed facilities (USDm 64.6 at end-june 216) Q2 Interim Financial Report Investor Update

6 Average fleet LTV 72.8% (7% at year-end 215) - Vessel values down 9% in 216 H1 (Dry bulk down 24%. Small gas carriers down 5%) - Approx. USDm 8 to be pledged as additional cash security during 216 Q3 USDm Fully owned fleet - Values and debt in USDm as per end 216 Q2 Gas carriers Market value end-215 Dry bulk - 5, 1, 15, 2, 25, 3, 35, Average age in years Market Value (June 216) Debt (commitment) Book Value Total owned fleet 9.4 Dry bulk carriers 5.4 Gas carriers Q2 Interim Financial Report Investor Update

7 - 216 H1 EBITDA down USDm (1.) compared to 215 H1 - Activity in 216 H1: Average 93 vessel. Expected activity in vessels Activity & fleet Total activity averaged 93 vessels in 216 H1 Core fleet totalled 4 at end 216 Q2 Five vessels sold at year-end 215 delivered to new owners during 216 H1 and a further two part-owned vessels sold in 216 H1 Pool unwound; tonnage replaced by spot chartering Last cape vessel redelivered to owners in July 216 Sale of two newbuilding orders (delivery pending) and cancellation of three newbuilding orders in 216 H1 Coverage in supramax and handysize increased Activity (avg. no. of vessels) Core fleet at end 216 Q2* Cover for rest of the year H New buildings Total Capesize Supramax Handysize Total * Owned 1 1 2* Part-owned 2 2 2* B/B in T/C in ** Pool, etc. 9% Supramax 7% 58% Handysize 45% % 25% 5% 75% 1% Handysize Capesize Supramax Total Note: * Table include sold newbuildings not yet delivered to new owners and one cancellation agreed in 216 Q3. ** Not including time-charters with a duration < 12 months Note: End-June CoAs included in the cover with expected requirement Q2 Interim Financial Report Investor Update

8 Dry Bulk outlook: Rest of Dry bulk markets expected to continue suffering: Modest demand growth and oversupply of tonnage - Much is still dependent on scrapping activity, but Q2 showed that any significant movements in rates may hinder this Markets Overall dry bulk demand growth is expected to remain modest in 216 Demand for iron ore, minerals and soybeans is expected to be drivers of dry bulk demand, while decreased demand for coal, fertilizer and wheat is expected to have a negative effect on demand for tonnage Demand prospects for dry bulk commodities are modest in 216. However, a small growth in demand will continue to be off-set by the oversupply of dry bulk vessels World fleet Scrapping activity; 8.2m DWT in 216 Q2; down almost 6% vis-àvis 216 Q1. This happened concurrently with a Q2 rise in freight rates, indicating that scrapping activity is subdued as soon as rates improve In 216 H1, contracting was minimal: Only one new Handysize vessel has been ordered, while no new Supramax vessels has been ordered. (Capes has been ordered though) Main concern is if scrapping activity will fall even further in 216 H2 by any hints of a recovery of and/or small increases in freight rates Spot market rates (USD/day) 2. Age profile and order book 1% 1% % 6% 4% 2% 8% 6% 4% 2% % Capesize Supramax Handysize % Average of the 6 T/C Routes for the Baltic Handysize Index 25 years or more years -15 years Orderbook % Average of the 6 T/C Routes for Baltic Supramax Index Source: Clarkson Research Services Source: Own analysis based on data from Clarkson Research Services Q2 Interim Financial Report Investor Update

9 - Activity decrease by 6%, as expected, causing EBITDA to come in lower than in 215 H1 (down 7%) - Expected activity in vessels Activity & fleet Controlled fleet averaged 34 vessels in 216 H1 Coverage increased in the fully-pressurised (F/P) and ethylene segments Activity (avg. no. of vessels) Fleet at end 216 Q2 Cover for rest of the year Total >> New buildings Total Fully-pressurised Ethylene Semi-refrigerated Total Owned Ethylene S/R 38% 53% 53% 57% H1 Semi-refrigerated Ethylene Fully-pressurised Total (RHS) Part-owned 3 3 B/B in 4 4 T/C in Pool, etc. 2 2 F/P 58% 75% % 25% 5% 75% 1% Note: End-June CoAs included in the cover with expected requirement Q2 Interim Financial Report Investor Update

10 Number of vessels Small gas carriers: Rest of Economic indicators suggest continued growth in industrial production in North America and Europe - China s industrial production is expected to grow at app 6 % pa. - Strength of JPY putting pressure on Japanese industrial activity with slightly stronger outlook for Taiwan and South Korea Solid demand growth for seaborne transportation of LPG and petrochemicals anticipated Car sales and construction activity near-term driving factors for demand Supply side developing favourable: Substantial scrapping potential to absorb existing order book Opportunities in Iran not expected before 217 Improving market balance Spot rates (1, USD/month) 7 Order book of small gas carriers by delivery month and type Note: Unadjusted for waiting time, if any. Source: Clarkson Research Services F/P (3,5 cbm., trading east of Suez) F/P (3,5 cbm., trading west of Suez) Semi-refrigerated (6,5 cbm) Ethylene (1, cbm) 2 Q3 216 Q4 216 Q1 217 Q2 217 Q3 217 Q4 217 Q1 218 FP SR ETH Q2 218 Q3 218 Q4 218 Source: Own analysis based on data from Clarkson Research Services. Chart excludes certain orders on Sinopacific to reflect expected very low probability of actual delivery Q2 Interim Financial Report Investor Update

11 Financing - Bank facilities unchanged; No refinancing of bank facilities necessary until 219 Outstanding debt in USDm, at end-of-year Repayment profile in USDm H Term loans Revolving credits (drawn) Revolving credits (undrawn) Bonds Repayments Expiry of undrawn revolving credits Bullets (bank loans) Bonds Notes: Data as per end-july 216 Data reflects agreement to sell newbuildings and cancel related financing commitment All numbers shown are forecasts and can change e.g. in case of sale of a vessel, prepayment, change in use of revolving facilities, etc. Bond debt at hedged value less JL s own bond holding (JL holds nom. NOKm 46 of JLA 2) Q2 Interim Financial Report Investor Update

12 Summary - Guidance unchanged Markets are highly challenging Dry bulk markets still hovering at historically depressed levels 216 earnings and cash generation still expected to be unsatisfactory Payment and transfer of non-strategic assets to be completed during 216 Q3 Guidance (unchanged) * EBITDA for 216 expected at levels similar to 215 (in 215: USDm (41)) Freight rate sensitivities +/- USD 1/day in Lauritzen Bulkers: 216 FY P/L impact of +/- USDm 2.4 +/- USD 5/day in Lauritzen Kosan: 216 FY P/L impact of +/- USDm.7 Negative EBITDA partly offset by special items (use of provisions) Depreciations lower du to sale of assets and write downs; and lower financial costs due to deleveraging and sale of financial assets. *) In general currency and interest rate fluctuations as well as effects from sale of assets, if any, may also impact the results Q2 Interim Financial Report Investor Update

13 Appendix Charter obligations Contact details Disclaimer Q2 Interim Financial Report Investor Update Oceans of know-how

14 Charter obligations - Charter obligations decreased USDm 89.5 since year-end 215 Operational lease liabilities (time charter and bare boat contracts) at end June 216 Bulkers Kosan Total USDm No. of vessels (full year equiv.) USDm No. of vessels (full year equiv.) USDm No. of vessels (full year equiv.) < 1 Year Year Year Year Year > 5 Year Total At end June 216, JL had purchase options on 24 dry bulk carriers Note: Above does not include income from contracts of affreightment (COAs) Q2 Interim Financial Report Investor Update

15 Contact details Investor relations Jacob Winthereik Financial Investor Relationship Manager Phone: Web: Press & Media Jens Søndergaard Senior Vice President, Strategic Planning & Executive Communications Phone: Web: Q2 Interim Financial Report Investor Update

16 Disclaimer This presentation contains forward-looking statements concerning J. Lauritzen A/S ( J. Lauritzen, JL or the Group ) and its financial condition, results of operations and business. All statements other than statements of historical fact are, or may be deemed to be, forward-looking statements. Forward-looking statements are statements of future expectations that are based on management s current expectations and assumptions and involve known and unknown risks and uncertainties that could cause actual results, performance or events to differ materially from those expressed or implied in these statements. Forward-looking statements include, among other things, statements concerning J. Lauritzen s potential exposure to market risks and statements expressing management s expectations, beliefs, estimates, forecasts, projections and assumptions. There are numerous factors that could affect J. Lauritzen A/S future operations and could cause J. Lauritzen A/S results to differ materially from those expressed in the forward-looking statements included in this presentation. All forward-looking statements contained in this presentation are expressly qualified by the cautionary statements contained or referenced to in this statement. Undue reliance should not be placed on forward-looking statements. Each forward-looking statement speaks only as of the date of this presentation. J. Lauritzen does not undertake any obligation to publicly update or revise any forward-looking statement as a result of new information or future events other than required by applicable law. In light of these risks, results could differ materially from those stated, implied or inferred from the forward-looking statements contained in this presentation. Some of the statistical and graphical information contained in the presentation is supplied from the Clarkson Research Services Limited ( CRSL ) database and other sources. CRSL has advised that (i) some information in CRSL s database is derived from estimates or subjective judgments, (ii) the information in the databases of other maritime data collection agencies may differ from the information in CRSL s database, (iii) whilst CRSL has taken reasonable care in the compilation of the statistical and graphical information and believes it to be accurate and correct, data compilation is subject to limited audit and validation procedures and may accordingly contain errors, (iv) CRSL, its agents, officers and employees cannot accept liability for any loss suffered in consequence of reliance on such information or in any other manner, and (v) the provision of such information does not obviate any need to make appropriate further enquiries. Any use of such data and graphical information appear with reference to Clarkson Research Services Limited While the information in the presentation is believed to be accurate, no representation or warranty, express or implied, is or will be made in relation to the accuracy or completeness of this presentation or any other written or oral information transmitted or made available to any person or its advisors in connection with any investigation of the Group and no responsibility or liability is or will be accepted by the Group or any of their respective affiliates and representatives. In particular, no representation or warranty, express or implied, is or will be given as to the achievement or reasonableness of any statements, estimates and projections with respect to the anticipated future performance of the Group and the market for the Group s products and services Q2 Interim Financial Report Investor Update