d’Amico International Shipping Q3 2010 Results 28 October, 2010
Agenda Highlights & Product Tanker Ma g g rket Marco Fiori, CEO Alb Alberto Mussini, CFO t M i i CFO Q3 & 9M 2010 Results Outlook Marco Fiori, CEO Appendix ppe d 1 d’Amico International Shipping
Highlights Marco Fiori, CEO 2 d’Amico International Shipping
Q3 2010 Highlights Events � Fleet deployment optimization – Out from Handytanke ers pool (only 1 vessel at the end of September 2010) � New time charter out contracts � New time charter-out contracts - Two vessels char Two vessels char rtered out to primary customers for 2 and 3 years. rtered out to primary customers for 2 and 3 years Contracts fixed at levels generating cash flow, increasing g the DIS coverage Financials Fi i l � Improved results - Net Loss US$ 5.1m in Q3’10 (US$ 14.0m in 9M’10) � Operating Cash Flow - US$ 4.3m in Q3’10 (US$ 8.8m p g $ Q ( $ m in 9M’10) � Net debt US$ 193.2m - US$ 91.1m Cash/cash inv. & C Credit lines US$ 110m P Product tankers Market d t t k M k t � Q3 produced better returns compared to the same qu arter in 2009, primarily due to moderate improvement of Oil Product demand coupled with the Global Economic p c upturn p 3 d’Amico International Shipping
Fleet Management – Profile e & employment DIS FLEET – 30 SEPT. 2010 MR Handy Total % OWNED 14.0 3.0 17.0 43.0% BAREBOAT CHARTERED - 1.0 1.0 2.5% TIME CHARTERED-IN 17.5 3.0 20.5 52.0% TIME CHARTERED THROUGH POOLS - 1.0 1.0 2.5% Total 31.5 8.0 39.5 100% � Fleet average age of 4.9 years vs. industry of 8.6 years 1 . . All vessels are double-hull � 6 Purchase Options on chartered-in vessels (3 by 2011) � 6 P h O ti h t d i l (3 b 2011) uct tankers fleet (68.3% 2 IMO classed) � Vessels in compliance with stringent rules - Flexible prod DIS FLEET EMPLOYMENT AND PARTNERSHIPS DIS Vessels Total Pool Vessels DIRECT 14.5 HIGH POOL HIGH POOL 8 0 8.0 11 0 11.0 GLENDA INT. MANAGEMENT (POOL) 16.0 35.0 HANDYTANKERS POOL 1.0 Total 39.5 � DIS strategy focus – Strong relationships w ith oil majors together with commercial alliances with Glencore, Mitsubishi and Nissho o Shipping 1. Per Clarksons as at October 2010 2. Calculated by number of vessels 4 d’Amico International Shipping
Fleet management - Covera age � High Coverage as part of DIS balanced business mo odel, protecting results when spot market is weak. High of 45% 1 in 2010 and in the range of 40% for 2011 ( in percentage of Revenue from fixed contracts ( Coverage ) progress ) Coverage pushed-on when rates at 65% the peak Coverage Coverage maintained at 60% high level during weak trend 55% 50% 45% 40% 40% 35% Fleet contract coverage � Coverage between 40% 60% protects DIS ag � Coverage between 40%-60% protects DIS ag gainst spot market volatility giving the gainst spot market volatility, giving the opportunity, at the same time, to keep a flexibl le and efficient chartering position � Time Charter agreements allow to maintain the strong long-term relationships with Oil Majors 1. Estimated percentage of coverage for FY 2010 5 d’Amico International Shipping
Product Tanker Market Marco Fiori, CEO 6 d’Amico International Shipping
Market Overview – Freight rates � The first nine months of 2010 spot market results benefite ed from ‘moderate’ improving Oil Product Demand � Demand was underwritten by colder winter conditions s, product dislocation and an improvement in gasoline demand in the United States � The number of Time Charter contracts (one year or mor re) has doubled the amount concluded in the entire of last year indicting an upswing in demand Average Rates for MR1Product Average Rates for MR1Product Tankers (US$) Tankers (US$) 20,000 18,000 16,000 , 14,000 12,000 10,000 8,000 6,000 6 000 4,000 2,000 0 Spot 1 Year 3 Year 5 year � Time Charter rates are now at the 2004 level ls, just prior to the exceptional levels recorded in recent years. Spot rate was briefly y higher in July / August than the 1y TC rate 1. Per Clarksons as at October 2010 7 d’Amico International Shipping
DIS Daily Rates Trend � DIS � DIS continues to over perform spot market thanks contract book supported the over performance in the weak market experienced in to access to cargoes via its market positioning and the last two years strategic partnerships (US$) (US$) 27,000 27,500 DIS TC rate 24,000 25,000 DIS Spot rate DIS S t t 22,500 21,000 20,000 18,000 17,500 15,000 15 000 15,000 12,000 12,500 10,000 9,000 7,500 Market TC rate 6,000 , 5,000 Market Spot rate 3,000 2,500 0 0 DIS TCE spot Market Spot rate DIS TCE time charter Mkt TCE time charter � DIS outperformance in still challenging mark ket conditions 1. Per Clarksons as at October 2010 8 d’Amico International Shipping
Q3 & 9M 2010 Results Alberto Mussini, CFO 9 d’Amico International Shipping
Q3 & 9M 2010 Financial Re esults - Highlights Results � TCE Earnings US$ 51.2m in Q3’10 / US$ 150.4m in 9M’ g ’10 � EBITDA of US$ 9.7m in Q3’10 / US$ 26.3m in 9M’10 � EBIT US$ 1.4m in Q3’10 / US$ 1.9m in 9m’10 � Net Loss US$ 5.1m in Q3’10 / US$ 14.0m in 9M’10 Cash Flow � O � Operating cash flow US$ 4.3m in Q3’10 / US$ 8.8m in 9 ti h fl US$ 4 3 i Q3’10 / US$ 8 8 i 9M’10 9M’10 9 Net Debt � Stable Net Debt of US$ 193.2m as at 30 September 201 0 with Cash /Cash investments of US$ 91.2m � Improved results. The Operating Profit is ba ack and DIS continues to generate cash thus maintaining its strong financial position � The US dollar weakness against the JPY neg gatively affected the bottom line 10 d’Amico International Shipping
Financial Results - Income Statement Q3 2010 Q3 2009 9M 2010 9M 2009 (US$ million) 51.2 42.6 TCE Earnings 150.4 141.1 (27.0) (22.3) Time charter hire cost ts (76.0) (66.5) (12.5) (11.5) Other direct operating g costs (38.9) (33.7) (3.9) (5.3) General and administr rative costs (13.2) (15.1) 1.9 0.7 Other operating Incom me 3.9 2.9 9.7 4.2 EBITDA 26.2 28.7 (8.3) (9.5) Depreciation (24.3) (27.1) 1.4 (5.3) EBIT 1.9 1.6 (6.4) (6.0) Net financial income ( charges) (14.6) (5.4) (0.1) ( ) ( (0.1) ) Income taxes ( (1.3) ) ( (0.4) ) (5.1) (11.4) Net Profit (Loss) (14.0) (4.2) � Better market conditions supporting freigh � Better market conditions supporting freigh ht rates, together with Opex and G&A costs ht rates, together with Opex and G&A costs monitoring resulted in the EBITDA best p performance of the year (19% of margin), significantly improved vs. the very weak Q3’0 09. 9M’10 balance very close to 9M’09 (when results were supported by still strong Q1 befo re the market collapsed) � EBIT confirmed positive in Q3’10 while YTD balance higher than the previous year � FX US$/JPY losses negatively influenced th he Financial charges and Net Loss (US$ 3.7m in Q3 and US$ 7.7m in 9M’10) $ 11 d’Amico International Shipping
Financial Results – EBITDA A and EBIT Trend EBITDA & EBIT per Quarter (US$/THOUSAND) 15,522 35.0% 14000 30.0% 11000 11000 9,708 9 708 9,024 9,366 25.0% 7,184 8000 6,794 4,151 20.0% 5000 2,090 1,443 1,330 2000 15.0% 126 -1000 Q1'09 Q2'09 Q3'09 Q4'0 09 Q1'10 Q2'10 Q3'10 10.0% -4000 -835 5.0% -5,342 -7000 -7 7,954 , -10000 10000 0.0% 0.0% EBITDA EBIT EBITDA Margin � The more favourable operating environment resulted in a positive current year quarterly trend, which shows a turnaround compared to t the very weak Q3 and Q4 2009. This relevant improvement would results in a Net profit as so improvement would results in a Net profit as so oon as a more effective and steady product oon as a more effective and steady product tanker market recovery will take place 12 d’Amico International Shipping
Financial results - Key Ope rating Measures Key Operating Measures Q1 2010 Q2 2010 Q3 2010 9M 2010 9M 2009 Number of vessel equivalents¹ 41.5 39.1 39.5 40.0 38.5 Fl Fleet contract coverage² t t t ² 47.5% 47 5% 47 4% 47.4% 42.1% 42 1% 45 7% 45.7% 56.9% 56 9% Daily TCE earnings³ (US$/day) 15.901 15,260 15,336 15,455 16,526 Owned vessels/total fleet (%) 40.5% 43.0% 43.1% 42.4% 40.8% Off-hire days/available vessel days (%) 2.4% 2.3% 3.0% 2.6% 3.0% 21,000 19,023 18,868 18,416 17,978 17,464 18,000 , 15,901 15,260 15,336 14,325 15,000 13,879 13,690 12,96 61 11,960 12,000 10,248 9,250 9,000 6,000 3,000 0 Q3'09 Q3 09 Q4'09 Q4 09 Q1'10 Q1 10 Q Q Q2 10 Q2'10 Q3 10 Q3'10 DIS Spot rate DIS Fixed rate DIS Average Rate � Freight spot rates level, improved in the ran nge of 25/30% compared to the second half of 2009 has remained quite stable over the year 2009, has remained quite stable over the year, then showing another relative peak in then showing another relative peak in July/August � Coverage has remained significant over the e current year at the profitable level of US$ 18,326 on average (Q3 daily rate lower due to t timing and certain contracts renewal effects) 1. Total vessel days for the period divided by number of days in the period 2. Days employed on time charters and contracts of affreightment, divided by total available vessel days. 3. Calculation exclude es time charter equivalent income and days of vessels chartered through pools 13 d’Amico International Shipping
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