Second Quarter 2013 Results Oslo 23 August 2013
Agenda Highlights Financials Operational review Market update and prospects Summary Q&A session 2
Highlights Highlights EBITDA of USD 36 million compared to USD 27 million in first quarter Improvement reflects a better utilization of our chemical tanker fleet and a somewhat better market Time-charter results up 8% compared with last quarter Best quarter for chemical tankers since third quarter 2008 Delivery of Bow Pioneer, the world s largest chemical tanker USD mill Index 1990=100 350 300 250 200 150 100 50 0 200 150 100 50 Annual EBITDA actual ownership 04 05 06 07 08 09 10 11 12 13 Chemical tankers Tank terminals ODFIX 0 03 04 05 06 07 08 09 10 11 12 13 3
Highlights Highlights Finalization of agreements with Lindsay Goldberg to expand our existing partnership to include substantially all tank terminal assets New tank terminal projects in China, USA and Europe 4
Financials Income statement - Second quarter 2013 USD mill 2Q13 1Q13 Gross revenue 294 291 Voyage expenses (116) (122) TC expenses (39) (44) Operating expenses (69) (68) General and administrative expenses (34) (32) Operating result before depr. (EBITDA) 36 27 Depreciation (31) (31) Capital gain/loss on fixed assets 3 (1) Operating result (EBIT) 8 (6) Net finance (10) (6) Taxes (0) (2) Net result (2) (13) 5
Financials Quarterly figures - from continued operation USD mill Gross Revenue EBITDA 350 300 250 45 40 35 30 USD mill 200 150 100 50 USD mill 25 20 15 10 5 0 2011 2012 2013 0 2011 2012 2013 Increase in EBITDA of USD 9 million compared to last quarter reflecting better utilization of the chemical tanker fleet 6
Financials Quarterly figures - from continued operation USD mill USD mill USD mill 15 10 5 0-5 -10-15 -20-25 -30 10 5 0-5 -10-15 -20-25 Operating Result (EBIT) 12 11 8 2 2 2 1 5 23 25 2011 2012 2013 9 10 10 11 12 12 13 13 12 11 2 5 Net Finance 0 9 2011 2012 2013 Net interest 3 6 6 8 6 1 Other financial/currency USD mill Increase in EBIT of USD 14 million 300 250 200 150 100 50 0-50 -100 compared to last quarter Stable net interest Capital gain of USD 5.4 million following the LG transaction this quarter Capital loss of USD 2.6 million on vessel sale 11 5 261 8 Net Result 4 13 2 28 39 40 2011 2012 2013 7
Financials Balance sheet 30.06.2013 USD mill - Assets Ships and newbuilding contracts 1 312 Tank terminals and intangible assets 561 Other non-current assets/receivables 171 Total non-current assets 2 044 Available-for-sale investments and cash 235 Other current assets 188. Total current assets 423 Assets held for sale 173 Total assets 2 641 Equity and liabilities Total equity 832 Non-current liabilities and derivatives 138 Non-current interest bearing debt 1 095 Total non-current liabilities 1 233 Current portion of interest bearing debt 244 Other current liabilities and derivatives 162 Total current liabilities 406 Liabilities held for sale 171 Total equity and liabilities 2 641 Cash balance of USD 235 million + USD 11 million cash in «held for sale assets» 9.8% of own shares held as treasury shares Equity ratio 31.5% 8
Financials Debt development Secured refinancing of three second hand vessels in the total amount of USD 75 million Refinancing of loan balloons expected to be finalized in third quarter Financing of newbuilding program in Korea expected to be completed in third quarter Evaluating refinancing of bond maturing in December, NOK 350 million USD mill 1,400 1,200 1,000 800 600 400 Debt Portfolio USD mill 300 250 200 150 100 Planned Debt Repayments 200 50 0 2Q13 2014 2015 2016 2017 0 2Q13 2014 2015 2016 2017 Ending balance Repayment Secured loans Balloon Leasing NOK bond 09/13 NOK bond 12/15 NOK bond 12/17 9
Financials Capital expenditure programme Odfjell s share In USD mill Per 2Q13 2014 2015 2016 2017 Hyundai Mipo, 4 x 46,000 DWT 8 110 Docking 14 27 27 27 27 Terminals 1) 78 51 39 20 20 Total 100 188 66 47 47 1) Planned not commited Odfjell s share post Lindsay Goldberg global partnership agreement Keel laying of two of the newbuildings at Hyundai Mipo 10
Financials Income statement 2Q13 chemical tankers and LPG/Ethylene USD mill 2Q13 1Q13 Gross revenue 258 257 Voyage expenses (116) (122) TC expenses (39) (44) Operating expenses (48) (49) General and administrative expenses (26) (25) Operating result before depr. (EBITDA) 29 18 Depreciation (23) (22) Capital gain/loss on fixed assets (3) (1) Operating result (EBIT) 4 (5) Net finance (16) (7) Taxes (1) (3) Net result (13) (16) 11
Financials Income statement 2Q13 tank terminals USD mill 2Q13 1Q13 Gross revenue 36 35 Operating expenses (21) (19) General and administrative expenses (9) (7) Operating result before depr. (EBITDA) 7 9 Depreciation (8) (9) Capital gain/(loss) 5 - Operating result (EBIT) 3 (1) Net finance 7 2 Taxes 1 2 Net result 10 3 12
Financials Results per segment Annual EBITDA actual ownership 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Gross revenue EBITDA Assets USD mill 350 300 250 200 150 100 50 0 04 05 06 07 08 09 10 11 12 13 Chemical tankers Tank terminals Chemical tankers Tank terminals USD mill Chemical tankers/lpg 2Q13 Tank terminals Chemical tankers/lpg 1Q13 Tank terminals Gross revenue 258 36 257 35 EBITDA 29 7 18 9 EBIT 4 3 (5) (1) 13
Financials Tank terminals EBITDA by geographical segment EBITDA YTD 2013 USD mill 20 15 10 5 0-5 7 14 11 Recovery of Rotterdam terminal behind schedule, negative EBITDA 2Q13 USD 8.4 million Minor seasonal variances on the other terminals -10-15 -20 17 Europe North America Asia Middle East EBITDA Tank Terminals by geographical segment* 2Q13 1Q13 Europe (9) (8) North America 3 4 Asia 7 8 Middle East 5 5 Total EBITDA 7 9 *Figures includes tank terminal overhead cost. Pre Lindsay Goldberg transaction. 14
Operational review Bunker development USD mill 110 100 90 80 70 60 50 40 30 20 10 - (10) (20) (30) 77.2 67.8 73.5 72.2 74.1 95.7 83.4 84.0 82.7 81.0 (15.7) Net Bunker Cost (9.8) (8.5) (8.5) (5.9) (1.9) (2.0) (1.0) (2.8) (5.8) 2Q12 3Q12 4Q12 1Q13 2Q13 Bunker purchase Bunker clauses Bunker hedging Net bunker cost USD/mt 800 700 600 500 400 300 200 100 0 Platts 3.5% FOB Rotterdam 08 09 10 11 12 13 Net bunker cost per tonne in the second quarter was USD 542 About 30% of the remaining bunker exposure in 2013 and about 20% of the 2014 exposure is hedged Bunker clauses in CoAs cover about 50% of the exposure 15
Operational review Fleet development - last 12 months Fleet additions DWT Built Tanks Transaction July 2013 Celsius Mayfair 20,000 2007 Stainless 2 year TC June 2013 Bow Pioneer 75,000 2013 Coated New delivery May 2013 Bow Engineer 30,086 2006 Coated Purchase March 2013 UACC Messila 45,352 2012 Coated 1 year TC March 2013 Bow Nangang 9,000 2013 Stainless New delivery March 2013 Chembulk Sydney 14,271 2005 Stainless 1-2 years TC January 2013 Chembulk Wellington 14,312 2004 Stainless 1-2 years TC November 2012 Bow Dalian 9,000 2012 Stainless New delivery October 2012 Chemroad Hope 33,552 2011 Stainless 1 year TC September 2012 UACC Masafi 45,352 2012 Coated 1 year TC September 2012 Bow Guardian 9,000CBM 2008 LPG Purchase August 2012 Bow Gallant 9,000CBM 2008 LPG Purchase 16
Operational review Fleet development last 12 months Fleet disposals, owned DWT Built Tanks Transaction May 2013 Bow Cheetah 40,257 1988 Coated Recycling January 2013 Bow Leopard 39,512 1988 Coated Recycling November Bow Fraternity 45,507 1987 Coated Recycling October 2012 Bow Lion 39,423 1988 Coated Recycling 17
Operational review Bow Pioneer the world s largest chemical tanker 75,000 dwt 30 tanks with a total cargo capacity of 86,000 cbm Entering pool in November with sister vessel owned by NCC 18
Operational review Finalizing transaction with Lindsay Goldberg The previous announced transaction has now been closed Lindsay Goldberg aquires 49% interest in Odfjell Terminals AS (OTAS), the holding company for substantially all of Odfjell s tank terminal activities Capital increase of USD 219 million in OTAS All tank terminal assets will be owned by OTAS Odfjell will realize a total gain of USD 27 million of which USD 5.4 million has been booked in second quarter Our tank terminal division is now poised for a strong growth in the years to come 19
Operational review New joint venture agreement in China Odfjell Terminals has signed an agreement to enter into a joint venture with the Founder Group Will acquire a 50% equity share in the existing Fujian Fangtong Terminals Co Ltd., including the land and an existing jetty at a price of USD 21 million The new terminal is to be located in the Quangang Industrial Zone at the mainland side of the Taiwan Strait The future Odfjell Terminals Fujian (Quanzhou) Co. Ltd has 14.8 hectares of available land, making possible the construction of 184,000 cbm of total storage capacity, supported by two jetties The planned total investment in the terminal is USD 137 million 20
Operational review Entered into a letter of intent to purchase Chem- Marine Corporation Odfjell Terminals has entered into a Letter of Intent to purchase Chem-Marine Corporation of South Carolina Located adjacent to Odfjell s tank terminal in North Charleston, South Carolina, USA This acquisition has an estimated value below USD 10 million 21
Operational review Tank terminal capacity 1,800 Total capacity in CBM (incl. related parties): Current capacity 5,310,291 Ongoing expansions 489,291 Cubic Metres`000 1,600 1,400 1,200 1,000 800 600 400 200 0 Mineral oil storage Chemical storage Ongoing expansions * Odfjell s ownership share in the respective tank terminals is shown in percentage 22
Market update and prospects Market update - chemical tankers Chemical tanker market improved Contract coverage increased to 56% Time charter results up by 8% compared with quarter Improved spot rates Vessel demand is expected to outgrow vessel supply 23
24 Core Chemical Deep-sea Fleet 2003-2016 - Orderbook and estimated demolition per August 16th, 2013 * Outphasing 30 years (Europe built) and 25 years (Asian built) Source: Odfjell FLEETBASE Market update and prospects-800-40004008001,2001,6002,00003 04 05 06 07 08 09 10 11 12 13 14 15 16'000Dwt-6.0%-3.0%0.0%3.0%6.0%9.0%12.0%15.0%DeliveriesOrderbookActualydemolishedEstim.vesseloutphasingNetfleetgrowth%ofyear-startfleetAverage annual net growth: 2003-2012: 8.0% 2013-2016: 1.1%
Market update and prospects Chemical Tanker Demand 2007-2016 Mill. Dwt 39 37 Average annual growth: 2007 2012: -1.2 % 2013 2016: 3.1 % 35 33 31 29 27 25 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Source: Drewry Shipping Consultants, 2013Q1 25
Market update and prospects Prospects World economy remains uncertain Freight markets remain in line with second quarter No material changes in the supply/demand balance still favourable outlook Fluctuations in bunker prices have a major impact on our results Expecting second half to be moderately better than first half of 2013 26
Summary Summary Slightly better chemical tanker market and stable terminal earnings Final agreement signed with Lindsay Goldberg Positioned for growth in both the tanker and tank terminal sector 27
Summary Company representatives Jan A. Hammer CEO, Odfjell SE Email: Jan.Hammer@odfjell.com Phone: +47 908 39 719 Terje Iversen CFO, Odfjell SE Email: Terje.Iversen@odfjell.com Phone: +47 932 40 359 IR contact: Tom A. Haugen VP Finance, Odfjell SE Email: Tom.Haugen@odfjell.com Phone: +47 905 96 944 28
Q&A session Thank you For more information please visit our webpage at www.odfjell.com 29