Containerships plc's interim report January-March 2017
- Net sales EUR 55.7 (EUR 49.1) million - EBITDA EUR 3.5 (EUR 3.3) million - Net profit EUR 0.6 million (-EUR 1.1) million - Guidance for 2017 remains unchanged: In 2017 net sales are expected to grow by 5-10% and profitability (EBITDA) to improve on the previous year.
Market conditions and significant events
CONTAINERSHIPS is a full-service logistics company providing transportation solutions to customers using various containers and logistics solutions in the Baltic Sea, North Sea and the Mediterranean regions. During the reporting period, Baltic Sea and North Sea traffic accounted for around 88% of net sales and the Mediterranean for around 12% of net sales.
There were no significant changes in the operating environment during the reporting period. The Russian market has remained challenging due to economic sanctions and the country's overall economic situation. United Kingdom's Brexit decision has not impacted the company's business. No significant changes are estimated to occur in the operating environment in the near future.
The company continues to progress on its chosen investment track based on its environmentally friendly LNG strategy. Building of LNG vessels has started numbering four in total, which will be delivered to the company during 2018. The company has increased the number of LNG-fuelled trucks in Great Britain and is exploring the possibilities to increase the number of LNG-fuelled trucks also in the Netherlands and in Finland.
In business in the Mediterranean region, the Group's own agency activities in Algeria began in autumn 2016 and have got off to a positive start. Business in Tunisia and Libya is being developed in partnership with local agents.
Performance overview
| Key figures, IFRS | Q1/2017 | Q1/2016 | Change | 1-12/2016 |
| Net sales, €m | 55.7 | 49.1 | 13.3% | 197.9 |
| EBITDA, € | 3.5 | 3.3 | 6.6% | 13.9 |
| as % of net sales | 6.3% | 6.7% | 7.0% | |
| Operating profit, €m | 1.4 | 1.3 | 5.9 | |
| as % of net sales | 2.6% | 2.7% | 3.0% | |
| Net profit, €m | 0.6 | -1.1 | -1.4 | |
| as % of net sales | 1.1% | -2.3% | -0.7% | |
| Equity ratio | 16.8% | |||
| Equity ratio, adjusted | 21.3% | |||
| Personnel, on average | 532 | |||
| Formulas used to calculate the key figures: Equity ratio = Equity/total assets x 100, Equity ratio, adjusted includes a capital loan of around €5 million | ||||
The company's net sales for the first quarter were EUR 55.7 (49.1) million, up 13.3% year on year. Business volumes in the Baltic Sea and North Sea were up around 12%. Falling freight prices in the Baltic Sea and North Sea levelled out and showed a slight rise towards the end of the quarter. Market conditions and competition in the Mediterranean were challenging earlier in the year and both business volumes and the price level were in retreat. The company developed its operations to better respond to customer needs and added a fourth vessel to its operations in the Mediterranean. This resulted in sales growth towards the end of the quarter. Thanks to the measures introduced, company sees that the positive trend in sales and profitability will continue for the rest of the year in the Mediterranean.
Operating profitability improved slightly in the first quarter: EBITDA showed an improvement of EUR 0.2 million and operating profit an improvement of EUR 0.1 million compared to the previous year. EBITDA for the first quarter was EUR 3.5 million, equating to 6.3% of net sales (EUR 3.3 million, 6.7%). Operating profit was EUR 1.4 million, equating to 1.4% of net sales (EUR 1.3 million, 1.3%). Profitability improved on the back of better utilisation rates, driven mostly by operational efficiency measures, and the positioning of empty containers. On the other hand, the rise in the price of oil on the global market and higher fuel prices increased operating costs significantly, which in turn eroded profitability.
Net profit for the first quarter was EUR 0.6 (-EUR 1.1) million, up EUR 1.7 million. Financial income and expenses levelled out because of smaller currency fluctuations than earlier, which reduced deferred items. On top of this, some of the interest costs on the bond have been capitalised in the cost of building the ships in accordance with general practice since the prepayments for the vessels were made in October 2016. The equity stated in the IFRS report does not include a capital loan of around EUR 5 million. Adjusted equity is around EUR 26 million, whereas in the IFRS calculation it is around EUR 21 million.
The company's operational cash flow was clearly much better than a year earlier and was EUR 1.1 million positive.
Most significant risks looking ahead
The most significant risks in Containerships' business relate to fluctuations in the price of oil and to political uncertainty in the Russian and Turkish markets. Risks and risk management are detailed on the company's website and in the financial statements. The company does not consider there to have been any material changes in risks during the reporting period.
Outlook
Guidance for 2017 remains unchanged. In 2017, net sales are expected to grow by 5-10%. EBITDA for the first quarter was, as planned, slightly better than a year earlier and EBITDA for the full year is expected to improve on the previous year.
Work will continue on improving operating efficiency. Efforts will be made to develop sales work by focusing on those segments and regions where growth can be captured and by further improving efficiency especially in those regions. The company does not expect any major changes in market conditions. The challenging situation in the Mediterranean is expected to continue.
Work on building the LNG vessels is underway and delivery will take place as planned in 2018. In addition, the company will continue to focus on developing LNG-fuelled truck traffic.
Containerships will publish its half-year report on 15 August 2017.
Containerships plc's bond totalling EUR 50.5 million issued on 2 April and 28 October 2015 has been listed on Nasdaq Helsinki since 1 April 2016.
Further information:
CEO, Kari-Pekka Laaksonen, phone +358 50 550 2555, kari-pekka.laaksonen(at)containerships.fi CFO, Jari Lepistö, phone +358 50 60 212, jari.lepisto(at)containerships.fi
Containerships plc has reported its results in accordance with IFRS accounting principles since the start of 2016. Interim reports are prepared in accordance with IFRS accounting principles, but exclude the notes to the financial statements as required under IAS 34 Interim Financial Reporting. When preparing the interim report, the company has complied with the same accounting principles as in the IFRS financial statements for 2016. The information presented in this interim report is unaudited.
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