American Shipping Company ASA Presentation of Q3 2019 20 November 2019
Important information Nothing herein shall create any implication that there has been no change in the affairs of American Shipping Company ASA ("AMSC" or the "Company") as of the date of this Company Presentation. This Company Presentation contains forward-looking statements relating to the Company's business, the Company's prospects, potential future performance and demand for the Company's assets, the Jones Act tanker market and other forward-looking statements. Forward-looking statements concern future circumstances and results and other statements that are not historical facts, sometimes identified by the words "believes", "expects", "predicts", "intends", "projects", "plans", "estimates", "aims", "foresees", "anticipates", "targets", and similar expressions. The forward-looking statements contained in this Company Presentation, including assumptions, opinions and views of the Company or cited from third party sources, are solely opinions and forecasts which are subject to risks, uncertainties and other factors that may cause actual events to differ materially from any anticipated development.
Third Quarter 2019 Highlights Adjusted net profit of USD 3.0 million* Normalized EBITDA** of USD 22.4 million • No profit share • DPO of USD 0.9 million Declared Q3 dividend of USD 0.08 per share, consistent with prior guidance • Ex-dividend date of 26 November 2019 with payment on or about 5th December 2019 • Classified as a return of paid in capital Stable market conditions for Jones Act tankers * Net profit after tax, adjusted for non-recurring items, currency fluctuations, mark-to-market of derivatives and changes to deferred tax ** Includes DPO, reported EBITDA for Q3 19 is USD 21.5 million 3
Stable, Predictable EBITDA Normalized EBITDA* (USD millions) Normalized EBITDA* per quarter (USD millions) 24 100 11 10 22 1 1 1 90 1 1 1 1 1 1 1 4 3 4 4 20 80 18 70 16 60 14 12 50 22 21 21 21 21 21 21 21 21 21 85 85 85 84 10 40 8 30 6 20 4 10 2 0 0 2015 2016 2017 2018 Q2 17 Q3 17 Q4 17 Q1 18 Q2 18 Q3 18 Q4 18 Q1 19 Q2 19 Q3 19 Profit Share DPO Reported EBITDA Profit Share DPO Reported EBITDA • Normalized EBITDA* of USD 22.4 million in Q3 19 (USD 22.2 million in Q3 18) • No profit share in Q3 19 or Q3 18 • DPO of USD 0.9 in Q3 19 (USD 0.9 million in Q3 18) * Including Profit Share (except 2018 and 2017 where profit share was 0 for the full year) and DPO. Reported EBITDA for Q3 19 is USD 21.5 million 4
Fleet Deployment Overview Long-term fixed rate bareboat charters to OSG secures cash flow Vessel Firm Charter Options End users Houston BBC exp. 2022 BBC Options • AMSC’s fleet is on firm BB Charters to OSG with Long Beach BBC exp. 2022 BBC Options evergreen extension options Los Angeles BBC exp. 2022 BBC Options New York BBC exp. 2022 BBC Options • AMSC receives fixed annual bareboat revenue of USD 88 million + ~50% of the profits generated by Texas City BBC exp. 2022 BBC Options OSG under the time charter contracts Boston Exp. ‘20 BBC Options Nikiski Exp. ‘20 BBC Options • OSG time charters the vessels to oil majors for U.S domestic trade Martinez Exp. ‘20 BBC Options Anacortes Exp. ‘20 BBC Options Tampa BBC exp. 2025 Options 5
A Critical Part of Oil Majors’ Transportation Logistics Primary trade routes for Jones Act crude oil and products The Permian Pipeline Crunch Permian Pipeline Capacity – New Projects and Production Growth, MBDs BAKKEN Incremental Total 2 Pipeline project Start capacity capacity Local refining & 4.18 existing pipelines 4 Patoka, IL Cactus 2 - Initial Q3 ’19 0.37 4.55 EPIC - Initial Q3 ’19 0.30 4.85 PERMIAN 1 6 Gray Oak Q4 ’19 0.90 5.75 Key US Oilfields EAGLE FORD EPIC - Final Q1 ’20 0.30 6.05 3 Clean Pipeline Crude Pipeline 1 Cactus 2 - Final Q2 ’20 0.33 6.38 5 Barges US GULF Wink-to-Webster Q3 ’21 1.00 7.38 Wink-to-Webster Q1 ’22 0.50 7.88 Jones Act Tanker Routes: 1 4 Gulf Coast refineries to Florida and East Coast Delaware Bay Lightening (Dirty) (Clean) Shuttle tankers from deep water U.S. Gulf to Gulf 5 Permian production growth 2 Alaska and Intra-west coast movements Coast Refineries (Dirty) (Clean/Dirty) has surpassed pipeline 6 Gulf Coast crude to Northeast refineries (Dirty) takeaway capacity – 3 Cross-Gulf movements (Dirty) additional pipelines to drive tanker demand Source: Navigistics’ Wilson Gillette Report Sept 2019 6
Majority of Fleet Carry Clean Products Jones Act tanker fleet deployment by main trades (Tankers and ATBs) 2015 Sept 2019 Total capacity: ~ 20 mbbls Total capacity: ~ 23.5 mbbls MSC MSC Idle 1) Idle 1) Clean USG Clean USG Chemicals 3% 3% Chemicals 8% 0% 2% 8% 36% West Coast 17% West Coast 17% 48% 22% 36% Crude Oil Crude Oil Source: Navigistics’ Wilson Gillette Report Sept 2019 and AMSC analysis Note: 1) Idle capacity refers only to old ATBs 7
Increasing Clean Volumes Into Florida Rising seaborn transport from Gulf to East Coast Gulf Coast to Florida Trade Lane Mbbls per month PADD 2 27.5 PADD 1 22.5 Mbbl 17.5 New PADD 3 Orleans Jacksonville Beaumont Houston Pascagoula 12.5 Tampa Port Everglades Corpus PADD 1 Receipts of Products by Tanker and Barge from PADD 3 Trendline 5% CAGR Christi 1 Sources: EIA 8
Crude Trade to East Coast stabilizing PADD 3 to PADD 1 Crude Oil Moves by Tanker and Trade lane carrying Crude from Gulf Coast to U.S. Barge Northeast 4 PADD 2 3 Boston New York Mbbl Philadelphia PADD 1 2 Washington 1 New PADD 3 Orleans Jacksonville Beaumont 0 Houston Pascagoula Tampa Port Everglades Corpus Christi PADD 3 to PADD 1 Movements of Crude by Tanker (3M Rolling Ave) 6 East Coast volumes back to ~6 tankers, up from ~1 tanker during 2017 Volumes driven by spread in pricing of U.S. oil vs international alternatives Source: EIA, Marine Traffic and AMSC analysis 9
Oil Price Spread - Key Driver for Crude Shipping Volumes PADD 3 to PADD 1 Crude Oil Moves by Number of Crude Oil Price Spread - WTI Houston vs. Bonny Light Tanker Liftings 14 7.00 6.00 12 5.00 10 4.00 8 3.00 6 2.00 4 1.00 0.00 2 ‐1.00 0 Aug‐17 Sep‐17 Oct‐17 Nov‐17 Dec‐17 Jan‐18 Feb‐18 Mar‐18 Apr‐18 May‐18 Jun‐18 Jul‐18 Aug‐18 Sep‐18 Oct‐18 Nov‐18 Dec‐18 Jan‐19 Feb‐19 Mar‐19 Apr‐19 May‐19 Jun‐19 Jul‐19 Aug‐19 Sep‐19 Oct‐19 On average 7 MR voyages per month of crude to U.S. Crude loaded in Houston vs. West Africa needs to be Northeast refineries minimum $1.50 cheaper to be competitive for purchase by U.S. Northeast Refiners Spread has been sufficiently wide since Aug/Sept 2017 Source: Argus and Marine Traffic 10
Fleet Reduction as Scrapping Continues Fleet profile by vessel age Considerable fleet growth in past years, but scrapping likely to bring fleet back to 2015 levels Kbbls capacity Scrap/lay up Tankers Number of vessels Projected Actual ATBs AMSC 12 30000 11 10 25000 9 2015 levels 8 Candidates for 20000 7 scrapping 6 15000 5 4 10000 3 2 5000 1 0 0 50 45 40 35 30 25 20 15 10 5 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 Fleet Scrapping Source: Navigistics’ Wilson Gillette Report Sep 2019, broker reports and AMSC analysis 11
Income Statement (unaudited) Figures in USD million (except share and per share information) Q3 2019 Q3 2018 Operating revenues 22.1 22.1 Operating expenses (0.6) (0.8) Operating profit before depreciation - EBITDA 21.5 21.3 Depreciation (8.5) (8.5) Operating profit - EBIT 13.0 12.8 Gain on investments - - Net interest expense (10.0) (10.4) Unrealized gain/(loss) on interest swaps 0.1 0.1 Net foreign exchange gain/(loss) - - Profit/(loss) before income tax 3.1 2.5 Income tax expense - (0.2) Non-cash income tax benefit/(expense) (0.2) 0.1 Net profit / (loss) for the period * 2.9 2.4 Average number of common shares 60,616,505 60,616,505 Earnings/(loss) per share (USD) 0.05 0.04 *Applicable to common stockholders of the parent company 12
Balance Sheet (unaudited) Figures in USD millions 30.09.2019 30.09.2018 Vessels 686.5 720.3 Interest-bearing long term receivables (DPO) 25.3 27.2 Other non current assets - 16.4 Derivative financial assets - 4.2 Trade and other receivables 0.1 0.1 Cash held for specified uses 2.4 2.1 Cash and cash equivalents 50.5 47.3 TOTAL ASSETS 764.8 817.7 Total equity 166.0 180.6 Deferred tax liabilities 12.7 12.3 Interest-bearing long term debt 533.2 580.7 Derivative financial liabilities 0.9 - Interest-bearing short term debt 41.6 28.3 Deferred revenues and other payables 10.4 15.8 TOTAL EQUITY AND LIABILITIES 764.8 817.7 13
Cash position decreased during the quarter CASH DEVELOPMENT IN 3Q 19 (USD millions) 14.4 21.5 7.1 57.2 0.5 52.9 4.8 OB Cash EBITDA Interest Amortization Dividends Other CB Cash 14
Recommend
More recommend
