First Quarter 2014 Results Bergen – 8 May 2014
Agenda • Highlights • Financials • Operational review • Market update and prospects
Highlights Highlights ODFIX 180 • Time-charter results in line with last 160 140 quarter Index 1990=100 120 100 • Chemical Tankers EBITDA of USD 80 60 17 million 40 20 0 • A major reorganisation, efficiency 08 09 10 11 12 13 14 drive and cost - cutting process has Annualized EBITDA¹ been kicked off 350 300 • The process at Odfjell Terminals 250 (Rotterdam) of re-organisation to USD mill 200 150 improve its cost base continues. This 100 includes a reduction of more than 50 0 100 positions 04 05 06 07 08 09 10 11 12 13 14 halloooo Chemical tankers Tank terminals oooooo ¹ Proportional consolidation method according to actual historical ownership share oo
Financials Change of accounting principle Equity method versus proportional consolidation method • Effective from 1 January 2014, Odfjell has adopted IFRS 11. All joint ventures previously accounted for by applying the “proportionate consolidation method” are now accounted for by applying the “equity method” • Odfjell’s share of net result and net investment is therefore now reported in one single line in the income statement and statement of financial position, previously this was accounted for line-by-line • The change in accounting principles does not have any impact on the Group’s equity • Comparative figures have been adjusted • The effect on the income statement and statement of financial position is further described in note 8 of the financial accounts
Financials Income statement¹ - First quarter 2014 1Q14 4Q13 USD mill Gross revenue 266 256 Voyage expenses (130) (126) TC expenses (52) (44) Operating expenses (43) (46) Share of net result from associates and JV (7) (77) General and administrative expenses (25) (23) Operating result before depr. (EBITDA) 9 (60) Depreciation (23) (20) Capital gain/loss on fixed assets (0) (5) Operating result (EBIT) (14) (86) Net finance (8) (16) Taxes (1) 1 Net result (23) (102) hallo ¹ Equity method
Financials Quarterly figures¹ USD mill EBITDA Gross Revenue 45 350 40 300 35 250 30 USD mill USD mill 25 200 20 150 15 100 10 50 5 0 0 2012 2013 2014 2012 2013 2014 • • EBITDA 1Q unchanged on flat market development from last quarter EBITDA 1Q unchanged on flat market development from last quarter • • Bunker remained high during the quarter on political conflicts Bunker remained high during the quarter on political conflicts ¹ Proportional consolidation method
Financials Quarterly figures USD mill • • EBIT in line with previous quarter, which included EBIT in line with previous quarter, which included Operating Result (EBIT )¹ impairment of net USD 81 million impairment of net USD 81 million 40 23 11 20 8 • • Chemical tanker contracts mostly renewed at Chemical tanker contracts mostly renewed at 0 higher rates, volumes show positive development higher rates, volumes show positive development ‐ 5 ‐ 6 -20 USD mill ‐ 15 ‐ 23 ‐ 25 -40 • • Net interest remain stable Net interest remain stable -60 -80 -100 ‐ 99 -120 2012 2013 2014 Net Finance² Net Result 10 20 9 5 7 0 1 0 0 ‐ 2 ‐ 4 -20 ‐ 13 ‐ 7 ‐ 7 ‐ 8 ‐ 9 ‐ 9 ‐ 9 ‐ 9 ‐ 9 ‐ 9 USD mill -5 ‐ 23 USD mill ‐ 28 ‐ 1 -40 -10 ‐ 39 ‐ 40 ‐ 3 ‐ 6 ‐ 7 -60 ‐ 9 ‐ 15 -15 -80 -20 haallooo -100 -25 Net interest Other financial/currency ‐ 102 -120 2012 2014 2013 oooooo 2012 2013 2014 ¹ Proportional consolidation method ² Equity method oooo
Financials Balance sheet¹ – 31.03.2014 USD mill - Assets Equity and liabilities Ships and newbuilding contracts Total equity 1 305 729 Other non-current assets/receivables Non-current liabilities and derivatives 79 37 Investment in associates and JV’s Non-current interest bearing debt 374 991 Total non-current assets Total non-current liabilities 1 757 1 029 Available-for-sale investments and cash Current portion of interest bearing debt 80 131 Other current assets Other current liabilities and derivatives 169. 117 Total current assets Total current liabilities 249 248 Total assets Total equity and liabilities 2 006 2 006 • • Cash balance of USD 80 million Cash balance of USD 80 million • • Net investment in tank terminals JV’s USD 364 million Net investment in tank terminals JV’s USD 364 million • • 9.8% of own shares held as treasury shares 9.8% of own shares held as treasury shares • • Equity ratio 36.3% Equity ratio 36.3% ¹ Equity method
Financials Debt development 1 • Exploring various financial arrangements for our gas newbuildings • Evaluating refinancing of maturing vessel mortgage loans Debt Portfolio Planned Debt Repayments 1,400 400 1,200 350 300 1,000 USD mill 250 USD mill 800 200 600 150 400 100 200 50 0 0 2014 2015 2016 2017 2018 2014 2015 2016 2017 2018 Ending balance Repayment Secured loans Balloon Leasing NOK bond 12/15 NOK bond 12/17 NOK Bond 12/18 ¹ Proportional consolidation method
Financials Capital expenditure programme – Odfjell’s share 2014 2015 2016 2017 2018 In USD mill Hyundai Mipo, 4 x 46,000 DWT 55 Sinopacific, 4 x 17,000 cbm 18 81 63 Docking 18 24 24 24 24 Terminals 1 93 51 16 6 4 Total 184 156 103 30 28 1 Planned not commited From the naming ceremony of Bow Trident in Korea
Financials Income statement¹ – 1Q14 chemical tankers and LPG/Ethylene 1Q14 4Q13 USD mill Gross revenue 268 260 Voyage expenses (130) (127) TC expenses (52) (45) Operating expenses (44) (46) General and administrative expenses 2 (25) (24) Operating result before depr. (EBITDA) 17 18 Depreciation (23) (21) Capital gain/loss on fixed assets 0 (5) Operating result (EBIT) (7) (8) ¹ Proportional consolidation method 2 Including corporate
Financials Income statement¹ – 1Q14 tank terminals 1Q14 4Q13 USD mill Gross revenue 23 25 Operating expenses (17) (17) General and administrative expenses (6) (9) Operating result before depr. (EBITDA) (0) (0) Depreciation (8) (10) Impairment - (81) Capital gain/(loss) - 0 Operating result (EBIT) (8) (91) ¹ Proportional consolidation method
Financials Results per segment¹ 1Q14 Annualized EBITDA – actual ow nership 100 % 350 90 % 300 80 % 70 % 250 60 % USD mill 200 50 % 150 40 % 30 % 100 20 % 50 10 % 0 % 0 Gross revenue EBITDA Assets 04 05 06 07 08 09 10 11 12 13 14 Chemical tankers Tank terminals Chemical tankers Tank terminals 1Q14 4Q13 Chemical Tank Chemical Tank USD mill tankers/LPG terminals tankers/LPG terminals Gross revenue 268 23 260 25 EBITDA 17 0 18 (0) EBIT (7) (8) (8) (91) ¹ Proportional consolidation method
Financials Tank terminals EBITDA – by geographical segment EBITDA YTD 2014 4 3 3 • • Negative EBITDA 1Q of USD 8.8 million at OTR, Negative EBITDA 1Q of USD 8.8 million at OTR, 2 2 including USD 1.2 million in non-recurring items including USD 1.2 million in non-recurring items 0 • • Divested the non-strategic terminal in Ningbo, Divested the non-strategic terminal in Ningbo, USD mill -2 China. A capital gain of USD 3.2 million will be China. A capital gain of USD 3.2 million will be -4 -6 booked in second quarter booked in second quarter -8 • • Mostly stable on all other terminals Mostly stable on all other terminals -10 ‐ 9 Europe North Asia Middle East America EBITDA Tank Terminals by 1Q14 4Q13 geographical segment Europe (9) (8) North America 3 3 Asia 3 3 Middle East 2 2 Total EBITDA (0) 0 * Revenue and profit from the terminals included in the Lindsay Goldberg transaction in 2013 are recognized according to the new ownership percentages from 1 September 2013.
Operational review Vessel operating expenses - chemical tankers 12,000 10,000 8,000 USD 6,000 4,000 2,000 0 05 06 07 08 09 10 11 12 13 14 USD / day, total USD/day, crew
Operational review Bunker development Net Bunker Cost 80 70 65.2 62.7 67.7 60.2 65.2 60 50 USD mill 40 71.1 72.3 70.1 68.6 30 69.4 20 10 - (3.1) (4.8) (4.2) (4.8) (7.1) (10) (1.8) (1.1) (0.4) (2.0) (1.0) (20) (30) 1Q13 2Q13 3Q13 4Q13 1Q14 Bunker purchase Bunker clauses Bunker hedging Net bunker cost Platts 3.5% FOB Rotterdam 800 700 • Net bunker cost per tonne in 1Q was USD 565 • Net bunker cost per tonne in 1Q was USD 565 600 500 • About 20% of the 2014 exposure is hedged • About 20% of the 2014 exposure is hedged USD/mt 400 • Bunker clauses in CoAs cover about • Bunker clauses in CoAs cover about 300 hallooooo 200 53% of the exposure 53% of the exposure 100 oooooooo 0 09 10 11 12 13 14 oooooo
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