CONCORDIA MARITIME AB (PUBL) Capital Link London Conference October 2015
Kim Ullman, CEO Ola Helgesson, CFO
Vision and business concept
Concordia Maritime is an international shipping company Founded in 1984 by the Stena Sphere which still owns about 53% *Estimates 2014
World wide competence Concordia Maritime Stena Teknik Stena Bulk Stena Weco Stena Sonangol Suezmax Pool Northern Marine Management Developed over 100 new buildings Chartering and commercial operations of over 100 fartyg Technical Management of over 130 fartyg First call on new business: 0, 50 eller 100%
Listing Founded in 1984 by the Stena Sphere which still owns about 53% Listed on NASDAQ OMX Stockholm CCOR.SS YTD 2015 + ca 40% (SEK18) Market Cap MSEK 850, MUSD 101
Our fleet 15 modern and efficient tankers
Now 15 Ships - A balanced fleet and employment strategy P-MAX Suezmax IMOIIMAX Ship and cargo type Light products Heavy products Crude oil Light products, easy chemicals and vegetable oils (2 x 50% charter in with Stena Bulk) Market 6 ships on nische trade 3 ships on contract 2 TC 2 spot = 4 niche pool Spot - pooling Spot, niche contract and IMOIIMAX pooling Partner Stena Weco, Concordia Maritime/ Stena Bulk Pool Stena Sonangol Suezmax Pool Stena Weco
P-MAX everything double +30% No of vessels 10 Length 183 m Width 40 m DWT 65,200 30% larger loading capacity
Suezmax our crude complement 2 additional positions taken in the segment No of vessels 1 (+0,5+0,5) Length 274 m Width 48 m DWT 158,000 10-15% less bunker use
Newbuilding program IMO2MAX No of vessels 2 Length 183 m Width 32,3 m DWT 50,000
Financials Our fleet Q2 2015 14 modern and efficient tankers
Q2 & 1H 2015 NB Sale of ships Q2 2014 EBITDA and EBT MSEK 80
Income per type, spot No. of vessel s Average income CM Average income spot market* USD/per day Q2 2015 Q2 2014 6 months 2015 6 months 2014 Q2 2015 Q2 2014 Product tankers 9 21,800 10,700 20,900 13,300 22,000 9,200 Suezmax 1,5 38,800 17,200 41,800 25,200 46,900 16,000 MR s Torm Scorpio Tankers Ardmore Shipping Frontline 2012 DS Norden *Clarksons MR Clean D Amico Q1-2015 24,275 20,061 18,413 21,200 19,412 18,503 Q2-2015 22,714 22,599 20,472 24,200 22,899 19,533
EBITDA per quarter USD million Q2 2015 Q1 2015 Q4 2014 Q3 2014 Q2 2014 Q1 2014 P-MAX, time charter 0.9 1.3 0.4 0.4 1.6 2.6 P-MAX, spot 7.5 6.0 4.4 2.2 0.5 3.7 IMOIIMAX 1.3 Panamax 11.9 1.1 Suezmax 3.2 3.7 1.9 13 0.6 2.1 Admin. and others 1.1 1.1 1.4 1.1 1.4 15 Total 11.8 9.9 5.3 2.8 13.2 8.0
EBITDA och EBT 2005 2014 MSEK 400 300 1H 2015 EBITDA 182 EBT 72 200 100 0-100 -200-300 -400 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 EBITDA EBT
Dividend and return 2005-2014 SEK 8 6 4 2 0-2 -4-6 -8 Dividend in % of earnings after tax Total return 2013: 15% 2014: 10% 83% 92% 76% 50% 60% 56% 0% 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Result per share, SEK Dividend per share, SEK Direct return, % % 8 6 4 2 0-2 -4-6 -8 2005 2014 excluding one off costs dividend has been 63% of earnings after tax
Equity and debt 2005-2014 MSEK 5 000 Per share 50 4 000 3 000 40 30 31 Dec 2014 NAV/share SEK 26 Equity/share SEK 33 Price/share SEK 13 2 000 1 000 20 10 30 June 2015 NAV/share SEK 31 Equity/share SEK 36 Price per share 18 0 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 0 Int.bearing.liab, MSEK Other debt, MSEK Equity, MSEK Equity per share, SEK
Share price development versus index 2014 2015
Share price development benchmark Swedbank 6 October 2015
Market
Tanker market projections Other Weather Stock changes Unknowns/Jokers Geo political Trading pattern Refinery Changes Distances Supply growth Oil Consumption Base World GDP
Crude tanker spot rates 2012-2015 (Aug) USD/Day 70 000 60 000 50 000 40 000 30 000 oversupply New delayed refineries China +75m barrels Comm. storage European refinary margins Asian Stock building weather Lower bunker cost Libya returns European margins tops -US gasoline demand -New ref. India 20 000 10 000 0 2012-jan 2012-feb 2012-mar 2012-apr 2012-maj 2012-jun 2012-jul 2012-aug 2012-sep 2012-okt 2012-nov 2012-dec 2013-jan 2013-feb 2013-mar 2013-apr 2013-maj 2013-jun 2013-jul 2013-aug 2013-sep 2013-okt 2013-nov 2013-dec 2014-jan 2014-feb 2014-mar 2014-apr 2014-maj 2014-jun 2014-jul 2014-aug 2014-sep 2014-okt 2014-nov 2014-dec 2015-jan 2015-feb 2015-mar 2015-apr 2015-maj 2015-jun 2015-jul 2015-aug Average Aframax Long Run Historical Earnings $/Day Average Suezmax Long Run Historical Earnings $/Day Average VLCC Long Run Historical Earnings $/Day
Crude tanker spot rates 2007-2015 (Aug) USD/Day 250 000 Not seen since 2008 200 000 150 000 100 000 50 000 0 2007-feb 2007-apr 2007-jun 2007-aug 2007-okt 2007-dec 2008-feb 2008-apr 2008-jun 2008-aug 2008-okt 2008-dec 2009-feb 2009-apr 2009-jun 2009-aug 2009-okt 2009-dec 2010-feb 2010-apr 2010-jun 2010-aug 2010-okt 2010-dec 2011-feb 2011-apr 2011-jun 2011-aug 2011-okt 2011-dec 2012-feb 2012-apr 2012-jun 2012-aug 2012-okt 2012-dec 2013-feb 2013-apr 2013-jun 2013-aug 2013-okt 2013-dec 2014-feb 2014-apr 2014-jun 2014-aug 2014-okt 2014-dec 2015-feb 2015-apr 2015-jun 2015-aug Average Aframax Long Run Historical Earnings $/Day Average Suezmax Long Run Historical Earnings $/Day Average VLCC Long Run Historical Earnings $/Day
Crude tanker spot rates 2000-2015 (Aug) USD/Day 250 000 200 000 2008 150 000 Super cycle 100 000 Now 50 000 0 2000-feb 2000-maj 2000-aug 2000-nov 2001-feb 2001-maj 2001-aug 2001-nov 2002-feb 2002-maj 2002-aug 2002-nov 2003-feb 2003-maj 2003-aug 2003-nov 2004-feb 2004-maj 2004-aug 2004-nov 2005-feb 2005-maj 2005-aug 2005-nov 2006-feb 2006-maj 2006-aug 2006-nov 2007-feb 2007-maj 2007-aug 2007-nov 2008-feb 2008-maj 2008-aug 2008-nov 2009-feb 2009-maj 2009-aug 2009-nov 2010-feb 2010-maj 2010-aug 2010-nov 2011-feb 2011-maj 2011-aug 2011-nov 2012-feb 2012-maj 2012-aug 2012-nov 2013-feb 2013-maj 2013-aug 2013-nov 2014-feb 2014-maj 2014-aug 2014-nov 2015-feb 2015-maj 2015-aug Average Aframax Long Run Historical Earnings $/Day Average Suezmax Long Run Historical Earnings $/Day Average VLCC Long Run Historical Earnings $/Day
Suezmax Earnings 2014 vs 2015 USD/Day 70 000 60 000 50 000 40 000 30 000 Sept 11th 20 000 10 000 0 Januari February March April May June July August September October November December Average Suezmax Long Run Historical Earnings $/Day 2014 Average Suezmax Long Run Historical Earnings $/Day 2015 WAF-USAC 2015
MR Earnings 2014 vs 2015 USD/Day 30 000 25 000 20 000 Sept 11th 15 000 10 000 5 000 0 Jan Feb Mar Apr May June July Aug Sept Oct Nov Dec YR2014 YR2015 TC2 2015
Markets going forward
Growing Product Trade Increasing volumes, distances & triangulation opportunities Gasoline/UMS Naphtha Gasoil Jet Freight can act as a deterrent of the arb-sensitive (and therefore freight dependent) trades.
Bears vs Bulls and Wild Cards NEXT 12 MONTHS Product Tankers Compared to the past 12 months Bullish Factors Wild Cards Bearish Factors Strong oil demand growth Continued influx of products driven by crude oversupply/low prices/high runs Growing exports from MEG/India Growing import demand in Australia, LAM, West Africa Growing China naphtha imports Q4/Q1 weather Refinery disruptions Oil prices/bunkers US crude exports will it hurt domestic refineries? Global Economy (e.g. China) Government intervention/currency fluctuations affecting demand growth Dirty ups offsetting LR2 deliveries End of peak gasoline Low scrapping/slippage Lower refinery margins High freight rates capping arb sensitive trades Crude NBs taking products west More Russia product exports
Demand & Supply Summary 2015-2017 Crude tankers Growth, % (2014) 2015 2016 2017 (2018) Demand* 2-3% 3.0 3.0 3.0? Supply 0% 1.7 3.7 3.0? Product tankers Growth, % (2014) 2015 2016 2017 (2018) Demand* 2-3% 5.0 5.0 5.0? Supply (net) 6% 5.2 5.2 3.5? *Volume + distance
Concordia Maritime s market review and view.. Review: Good tanker markets in 2015 due low oil prices and very low growth of crude tankers An expected (and communicated) seasonal dip Aug/Oct but - Not as low and not as long View going forward: Specific - Q415/Q116 expected to bounce back to good markets across the board General - continued low oil prices will continue to drive world demand Geographical and strategic change in refinery situation still at force resulting in longer haul and cross trade Order book for product carriers in balance with demand growth ie, Concordia Maritime has a continued positive view of the product tanker market
Australian product import development
P-MAX focus on nisch, Australia/New Zeeland Closure of 4 refineries last 5 years 40-60 MR Imports per month 30-40 ports (product import) Newly renewed contract with major oil Co. Highest markets in the East Cargo cap. Utilization ~90% 3 ships on contract to EXM (2 ships till Sep 2016, 1 to March 2016) Contract form - consecutive voyage charter market related
Contract illustration Contract Market related
P-MAX focus on nische, West Africa WAF (Nigeria/Togo/Benin/Ivory Coast) - Fast growing continent (Africa) - Very bad/no refineries - Clean import ca 50 MR/month - P-MAX, full cargo (50.000) - Draft ports in WAF but STS - Cargo capacity utilization 95-100% - Premium earnings to standard MR trade
Stena Image s first successful 6 voyages Voy 1 Load ports: 3 ports Indonesia Cargo: 3 diff grades palm oil/coconut oil Discharge ports: 3 ports Spain Voy 2 Load port: 1 port Italy Cargo: Gasoline Discharge port: Gizan (R Sea/Saudi Arabia) Voy 3 Load port: Yanbu (R Sea/Saudi Arabia) Cargo: Chemicals Discharge port: Fujairah (UAE) Voy 4 Load port: Jubail Saudi Arabia Cargo: Gasoline Discharge port: Fujairah Voy 5 Load port: Jebel Ali Saudi Arabia Cargo: Gasoline Discharge port: Fujairah Voy 6 Load port: W.C India Cargo: Jet fuel/gasoline Discharge: Australia Concordia Maritime s next IMOIIMAX will be delivered in October 2015
Focus ahead Increase TC and CVC to customers Buy/sell ships Continue the high quality in ship operation Increase the number of nische trades Implement IMOIIMAX Customer claim in relation to Stena Primorsk Increase visibility and transparency
To summarize: 2015 the market has definitely turned EBT 1H 2015 72 MSEK Seasonal low market rates in Q3 expected improvement Q4 Important niche trades Australia, New Zeeland and West Africa Increased EBIDTA potential in 2015 by Niche trades Better market rates in general Two additional Suezmax positions Two new IMO2MAX ships delivered in Q2 and Q4 Full focus to deliver result/solutions on the challenges
Why invest in Concordia Maritime? 1 Substantial discount to NAV - Share price SEK18 - NAV per share SEK 31 - Equity per share SEK 36
Why invest in Concordia Maritime? 2 Improved EBITDA generation capacity P-MAX, increased number of niche trades 2 IMO2MAX 2 Suezmax (TC)
Why invest in Concordia Maritime? 3 Improved tanker markets Crude: Stabilized correcting down - due newbuildings Products: Still upside market still growing
Why invest in Concordia Maritime? 4
Stena Image naming ceremony