Published via NASDAQ OMX on August 27, 2014, 2014-08-27 08:00 CEST (GLOBE NEWSWIRE) --
H1 Result 2014
Summary
The comparison figures for first half 2013 are stated in parenthesis.
This half yearly report covers the period 1 January 2014 to 30 June 2014.
The Group incurred a loss before tax of USD 3.4 million in H1 2014 compared to a larger loss of USD 5.0 million before tax in the same period last year. This was due to lower interest expenses of USD 1.7 million and more earning days in 2014 as Nordic Ruth underwent repairs and was off-hire for repairs during the corresponding period in 2013. With the inclusion of the contribution in H1 2014 from Nordic Ruth, TCE earnings rose 7.9% to USD 12.8 million (USD 11.8 million) in H1 2014. The increase would have been potentially USD 0.8 million higher if not for 3 vessels which underwent scheduled dry-docking in H1 2014.
Including the one-off costs of USD 1.5 million (USD nil) arising from the change of technical managers, expenses relating to the operation of vessels in H1 2014 increased 1.5% to USD 9.4 million (USD 9.2 million).
EBITDA fell 25.1% to USD 1.3 million (USD 1.7 million) due mainly to higher professional fees incurred.
Depreciation was USD 3.0 million (USD 3.2 million).
Net finance expenses were lower at USD 1.7 million (USD 3.6 million) as the loans were refinanced in December 2013 as part of the restructuring that was completed on 19 December 2013.
Cash flow generated from operations was USD 2.7 million (USD -1.9 million) mainly from the distributions earned by the respective pools, proceeds received from an insurance claim for Nordic Ruth, offset by payment of periodic interest expenses on the working capital facility and term loan. The Group invested USD 2.0 million in dry-docking expenses and made a partial repayment of USD 1.7 million on the working capital loan facility.
Cash balance as at 30 June 2014 totalled USD 4.4 million (USD 4.1 million).
During H1 2014, all the vessels were transferred to separate wholly-owned legal entities in Singapore as part of the restructuring. At the same time, the change of technical managers for all the six vessels was also completed with Columbia Shipmanagement and Thome Ship Management managing three vessels each.
The transfer of the technical management on all six vessels went as planned and final costs were lower than budgeted. In addition, the reduction in TCE earnings - budgeted as a result of the change of technical managers, and the consequential re-approval requested by oil majors - has also been less than budgeted.
For H1 2014, the spot market for both the handy tankers and LR1 vessel exhibited volatility. In particular, the handy tanker spot market rates were on a downward trend. As a result, the average daily TCE rates earned by the vessels in the Handytankers pool and the LR1 vessel were below the forecasted daily rate of USD 14,000 and USD 15,200, respectively.
Due to the poorer performance in H1 2014 and lower TCE forecasted by the respective Pool Managers for H2 2014, the forecasted financials indicated in the 2013 Annual Report have been revised downwards. The Group expects EBITDA (earnings before interest, tax, depreciation and amortisation) to be in the range of USD 5.0 million – USD 8.0 million, a reduction from USD 9.0 million – USD 12.0 million. Barring further unforeseen circumstances, the result before tax is expected to be USD -5.0 million – USD -2.0 million, a decrease from USD -2.0 million – USD 1.0 million. The Group does not expect any write-downs of vessels’ carrying value unless significant weakness in the product tanker sector sets in.
For 2014, the Group’s cash flows is expected to be USD -3.0 million – USD -1.0 million, after repaying the outstanding short-term working capital loan. The previous cash flow forecast was USD -1.0 million – USD 2.0 million.
As discussed in the Interim Report Q1 2014, the Company’s main shareholder has established a joint venture with BW Group in the product tanker segment. The Company is not a party to this venture and is not aware of any further development in this respect. Simultaneously, the Board is continually seeking suitable investment opportunities to grow the Company in the product tanker segment.
For further information please contact:
Knud Pontoppidan, Chairman of the board, Nordic Shipholding A/S: +45 39 29 10 00
