1. No category

Third Quarter 2014 Results
Bergen – 13 November 2014
1
Agenda
•
Highlights
•
Financials
•
Operational review
•
Market update and prospects
2
Highlights
Highlights
•
Chemical Tankers EBITDA of USD 26 million, compared with USD 24 million in
second quarter
•
Time-charter results down by 3%
•
Odfjell Terminals EBITDA of USD 4 million compared with negative USD 10 million
in second quarter
ODFIX
Annualized EBITDA¹
200
350
Index 1990=100
300
USD mill
250
200
150
100
150
100
50
50
0
-50
0
05
06
07
Chemical tankers
08
09
10
Tank terminals
11
12
13
14
08
09
10
11
12
13
14
LPG/Ethylene
¹ Proportional consolidation method according to
actual historical ownership share
3
Highlights
Highlights
•
Closing of transaction of gas carrier joint venture,
resulting in a capital gain in excess of USD 6 million
•
Ongoing cost-cutting and efficiency review to
significantly improve Odfjell results going forward
4
Financials
Income statement¹ - Third quarter 2014
3Q14
2Q14
267
275
Voyage expenses
(123)
(127)
TC expenses
(47)
(50)
Operating expenses
(44)
(48)
Share of net result from associates and JV
(8)
(11)
General and administrative expenses
(24)
(26)
19
13
(24)
(23)
Capital gain/loss on fixed assets
7
0
Operating result (EBIT)
1
(9)
Net finance
(9)
(15)
Taxes
(1)
(1)
Net result
(9)
(26)
USD mill
Gross revenue
Operating result before depr. (EBITDA)
Depreciation
¹ Equity method
hallo
5
Financials
Quarterly figures¹
USD mill
EBITDA
Gross Revenue
45
40
300
35
250
30
USD mill
USD mill
350
200
150
25
20
15
100
10
50
5
0
0
2012
2013
2014
2012
2013
•
Stable gross revenue
•
Improved EBITDA for all business segments
•
EBITDA in 3Q USD 31 million compared to USD 29 million in 2Q, which
2014
was adjusted for one off charges of USD 14 million
¹ Proportional consolidation method
6
Financials
Quarterly figures
USD mill
Operating Result (EBIT)¹
40
23
11
20
8
5
0
‐5
USD mill
-20
‐6
EBIT improved compared to last quarter
•
EBIT 2Q included one-off items of total
‐15 ‐15
‐25 ‐23
-40
•
USD 14 million
-60
•
-80
Net interest remains stable
-100
‐99
-120
2012
2013
2014
Net Finance²
Net Result
10
20
0
0
-5
‐8
1
‐9
‐9
‐9
‐9
‐7
‐7
‐9
‐9
‐9
0
0
‐9
-20
‐1
-10
-15
‐3
‐6
‐7
‐9
‐5
‐15
-20
-25
9
7
USD mill
USD mill
5
-40
‐2
‐4
‐9
‐13
‐22 ‐26
‐28
‐39 ‐40
-60
-80
Net interest
2012
Other financial/currency
2013
¹ Proportional consolidation method
² Equity method
2014
-100
‐102
-120
2012
2013
haallooo
oooooo
2014
oooo
7
Financials
Balance sheet¹ – 30.09.2014
USD mill - Assets
Ships and newbuilding contracts
Other non-current assets/receivables
Investment in associates and JV’s
Total non-current assets
Equity and liabilities
1 285
81
397
1 762
Total equity
Non-current liabilities and derivatives
681
38
Non-current interest bearing debt
1 064
Total non-current liabilities
1 102
Available-for-sale investments and cash
123
Current portion of interest bearing debt
134
Other current assets
155.
Other current liabilities and derivatives
122
Total current assets
278
Total current liabilities
256
Total assets
2 040
Total equity and liabilities
•
Cash balance of USD 123 million - excluding JV’s cash
•
Net investment in tank terminals JV’s USD 333 million
•
9.8% of own shares held as treasury shares
•
Equity ratio 33.4%
•
Odfjell Gas included as joint venture as of 30.09.2014
2 040
¹ Equity method
8
Financials
Debt development – 30.09.2014
•
Two last Hyundai Mipo newbuildings fully financed
•
Financing of gas newbuildings in process
•
Exploring various financial arrangements for loans maturing towards the end of 2015
Debt Portfolio
Planned Debt Repayments
1,400
400
1,200
350
300
USD mill
USD mill
1,000
800
600
250
200
150
100
400
50
200
0
2014
0
2014
2015
Ending balance
2016
Repayment
2017
2015
2016
2017
2018
2018
Secured loans
NOK bond 12/15
Balloon
NOK bond 12/17
Leasing
NOK Bond 12/18
Balloon repayment in late 2015 relates primarly to loans on our sophisticated stainless steel
vessels built in Poland
9
Financials
Capital expenditure programme
In USD mill – per 30.09.2014
2014
2015
2016
2017
2018
6
20
20
20
20
14
81
63
25
84
70
75
56
34
Chemical Tankers, Odfjell share
Hyundai Mipo, 2 x 46,000 dwt1)
Docking
55
Odfjell Gas, 100 % share2)
Sinopacific, 4 x 17,000 cbm
Sinopacific, 4 x 22,000 cbm
Tank Terminals, 100% share
Planned (not commited) capex
1)Third
64
8
vessel was delivered 2 October 2014, remaining capex USD 28 million
is committed to inject up to USD 50 million in equity in 2015/2017
2)Odfjell
10
Financials
Income statement¹ – 3Q14 chemical tankers
3Q14
2Q14
263
270
Voyage expenses
(122)
(125)
TC expenses
(45)
(48)
Operating expenses
(44)
(48)
General and administrative expenses 2
(25)
(25)
Operating result before depr. (EBITDA)
26
24
(24)
(23)
Capital gain/loss on fixed assets
0
0
Operating result (EBIT)
3
1
USD mill
Gross revenue
Depreciation
¹ Proportional consolidation method
2 Including corporate
11
Financials
Income statement¹ – 3Q14 tank terminals
3Q14
2Q14
23
24
Operating expenses
(14)
(26)
General and administrative expenses
(5)
(8)
4
(10)
Depreciation
(8)
(8)
Capital gain/(loss)*
(1)
1
Operating result (EBIT)
(5)
(17)
USD mill
Gross revenue
Operating result before depr. (EBITDA)
*Write-off investment project in Le Havre of USD 1 million
¹ Proportional consolidation method
12
Financials
Results per segment¹
3Q14
Annualized EBITDA¹
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
350
300
USD mill
250
200
150
100
50
0
05
-50
Gross revenue
Chemical tankers
EBITDA
06
07
08
09
10
11
12
14
Assets
Tank terminals
LPG/Ethylene
Chemical tankers
3Q14
Tank terminals
LPG/Ethylene
2Q14
Chemical
tankers
Tank
terminals
LPG/
Ethylene
Chemical
tankers
Tank
terminals
LPG/
Ethylene
Gross revenue
263
23
7
270
24
8
EBITDA
26
4
1
24
(10)
1
EBIT
3
(5)
7
1
(17)
1
USD mill
13
¹ Proportional consolidation method
13
Financials
Tank terminals EBITDA – by geographical segment
USD mill
EBITDA YTD 2014
15
10
5
0
-5
-10
-15
-20
-25
-30
-35
-40
11
10
7
•
One-off charges in 2Q14 of USD 11.8 million at OTR
‐34
Europe
North
America
Asia
EBITDA Tank Terminals by
geographical segment
Middle East
3Q14
2Q14
(6)
(20)
North America
3
4
Asia
4
4
Middle East
2
3
Total EBITDA
4
(10)
Europe
14
Operational review
Vessel operating expenses - chemical tankers
12,000
10,000
USD
8,000
6,000
4,000
2,000
0
05
06
07
08
09
USD / day, total
10
11
12
13
14
USD/day, crew
15
Operational review
Bunker development
Net Bunker Cost
80
70
65.2
67.7
65.2
60
61.3
63.0
65.9
66.4
50
USD mill
40
30
71.1
72.3
(4.8)
(4.2)
(1.1)
4Q13
70.1
20
10
-
(3.1)
(1.8)
(10)
(3.2)
(0.4)
(3.9)
(0.7)
1Q14
2Q14
3Q14
(0.2)
(20)
(30)
3Q13
Bunker purchase
Bunker clauses
Bunker hedging
Net bunker cost
Platts 3.5% FOB Rotterdam
800
• Net bunker cost per tonne in 3Q was USD 565
700
USD/mt
600
• About 90% of the remaining 2014 exposure and
500
400
45% of the 2015 exposure is hedged at an
300
200
hallooooo
oooooooo
Bunker clauses in CoAs cover about
53% of the
oooooo
exposure
average of USD 525 per tonne
100
0
09
10
11
12
13
14
•
16
Operational review
Fleet development - last 12 months
Fleet additions
DWT
Built
Tanks
Transaction
October 2014
Bow Trident
46 600
2014
Coated
Owned
August 2014
Kristin Knutsen
19 152
1998
Stainless
Short-term TC
June 2014
Bow Tribute
46 000
2014
Coated
Bareboat
May 2014
UACC Mansouria
45 352
2013
Coated
Short-term TC
April 2014
Bow Trajectory
46 000
2014
Coated
Bareboat
April 2014
Bow Harmony
33 619
2008
Stainless
Purchase
March 2014
SG Friendship
19 773
2003
Stainless
Medium-term TC
Februay 2014
Berlian Ekuator
35 000 cbm
2004
LPG
Short-term TC
January 2014
Celsius Mumbai
19 993
2005
Stainless
Medium-term TC
December 2013
RT Star
26 199
2011
Stainless
Medium-termTC
December 2013
Celsius Miami
19 991
2005
Stainless
Medium-termTC
November 2013
Celsius Manhatten
19 807
2006
Stainless
Medium-termTC
November 2013
Bow Condor
16 121
2000
Stainless
Purchase J/V
October 2013
Bow Eagle
24 700
1988
Stainless
Short-termTC
Short-term:
Medium-term:
Long-term:
Up to one year
1-3 years
More than three years
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h
oooooo
oooo 17
Operational review
Fleet development – last 12 months
Fleet disposals, owned
DWT
Built
Tanks
Transaction
December 2013
Bow Mate
6 001
1999
Stainless
Sale
October 2013
Bow Eagle
24 700
1988
Stainless
Sale
Delivery of Bow Trident, the third of four coated chemical tankers from
the Hyundai Mipo yard in South Korea
18
Operational review
Odfjell Gas Carriers

The announced joint venture became effective 29 September

Entered into an agreement with affiliates of Breakwater Capital and Oak Hill
Advisors to form a liquefied petroleum gas and ethylene shipping joint venture

A capital gain in excess of USD 6 million was realised as a result of this transaction

Existing two vessels entered into an pool agreement with Lauritzen Kosan AS

Newbuildings expected to be delivered from 4Q 2015 and onwards
3Q14
2Q14
Gross revenue
7
8
EBITDA
1
1
EBIT
7
1
USD mill
19
Operational review
Terminal projects and expansions
•
Odfjell Terminals (Charleston) has been operational since the start of 2014 and
contracts for the full capacity are in final negotiations
•
New stainless steel tank capacity of 30,800 cbm in Houston was completed in
September
•
Construction of another new tank pit in Houston is underway with expected completion
in 4Q 2015, adding 17,170 cbm of tank capacity
•
The construction of the new Tianjin Terminal in China is progressing with start of
operations scheduled in 1Q 2015
hallooo
oooooo
o
OTH bay 9 completed in September
20
Operational review
Tank terminal capacity
Total capacity in CBM (incl. related parties):
Current capacity
Ongoing expansions
5,419,722
479,570
1,800
1,600
Cubic Metres`000
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
21
Operational review
Odfjell Terminals (Rotterdam) – current status
•
EBITDA negative USD 6 million in 3Q14, Odfjell share
•
Re-organisation and subsequent reduction of staff completed 1 August 2014
•
Cost base reduced and positioned for growth
•
Storage tanks supporting the distillation units will be re-commissioned in fourth
quarter of 2014
OTR Historical EBITDA (100%)
60
EUR mill
40
20
0
-20
-40
-60
* YTD 2014 EBITDA includes one-off items of EUR 16.8 million
22
Market update and prospects
Reducing cost and improving efficiency
•
The cost cutting and efficiency review was announced in May and fully mobilised
as from July
•
Organized through work streams focusing on operating expenses, G&A,
bunkers and trade optimization
•
Identification of all potential cost reductions has recently been finalized
•
All identified cost reductions will be subject to risk assessment and detailed
planning and implementation will take place from January 2015
•
Immediate initiatives alone are expected to bring an annualised bottom line
effect in excess of USD 50 million when fully implemented
•
Any provisions related to fleet optimisation and implementation costs will be
made in Q4/Q1 2015
23
Market update and prospects
Market update – chemical tankers
•
The activity in the market in third quarter was quite similar to previous period
•
Reduced spot trading caused downward pressure on freight rates
•
Lower oil prices will reduce our bunker costs
•
Lower price for oil products seems to hamper trade and the activity in general
•
Delays in ports continue to rise and creates challenges
24
Market update and prospects
Core Chemical Deep-sea Fleet 2004-2018
Orderbook and estimated demolition per October 31st, 2014
t
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f
t
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a
t
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r
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y
f
o
%
%
0
.
5
1
t
w
D
0
0
00
'
0
0
,
2
%
0
.
2
1
0
0
6
,
1
Average annual net growth:
2004-2013:
7.5%
2014-2018:
4.0%
%
0
.
9
0
0
2
,
1
%
0
.
6
0
0
8
%
0
.
3
0
0
4
0
%
0
.
0
0
05
06
07
08
09
10
11
12
13
14
15
16
17
18
%
0
.
3
-
0
4
-
04
%
0
.
6
-
0
0
8
-
g
n
i
s
a
h
p
t
u
o
l
e
s
ks
oe
ov
b.
r
m
e
i
ds
t
r
OE
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e
h
sh
i
l
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o
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mo
r
eg
sdt
e e
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vu
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DAN
Source: Odfjell FLEETBASE
hhhhhh
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h built)
* Outphasing 30 years (Europe built) and 25 years (Asian
25
Market update and prospects
Prospects
•
US consumer confidence advanced in October to the highest in the past seven years
•
Stronger expansion of the US economy
•
European economies are still weakening
•
Odfjell will benefit from lower bunker prices
•
Fourth quarter expected to improve from the third quarter for the chemical tanker
and LPG/Ethylene segments
•
We expect improved results at Odfjell Terminals (Rotterdam) and slight increase in
earnings for the remainder of the terminals due to increase in capacity
26
Company representatives
Jan A. Hammer – CEO, Odfjell SE
Terje Iversen – CFO, Odfjell SE
Email: Jan.Hammer@odfjell.com
Email: Terje.Iversen@odfjell.com
Phone: +47 908 39 719
Phone: +47 932 40 359
IR – contact:
Tom A. Haugen – VP Finance, Odfjell SE
Email: Tom.Haugen@odfjell.com
Phone: +47 905 96 944
27
Thank you
For more information please visit our webpage at www.odfjell.com
28