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ADS Maritime Holding
Quarterly Report • Feb 23, 2024
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Quarterly Report
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ADS MARITIME HOLDING PLC
FOURTH QUARTER 2023 REPORT
ADS Maritime Holding Plc ("The Company" or "ADSMH") is a shipping investment company established in 2018 and listed on the Euronext Growth Oslo Stock Exchange with the ticker symbol "ADS". The Company focuses on making counter-cyclical investments within the maritime sector. A typical investment can be ownership of 10% - 25% of a shipping project, whereby the Company may also earn fees through various roles such as Arrangement fees, Business Management fees and Commercial Management fees. Should the opportunity arise for a larger investment that is attractive and fits the strategy, the Company will seek to raise external debt and/or equity to fund such growth. Furthermore, ADSMH is also open to investing in other financial instruments within the maritime sector.
The investments
During 2023 the Company's investment portfolio has consisted of the following investments:
- Profit and Loss Sharing Agreement ("PLSA") – subscribed for 20% interest in VLCC
In April 2022, ADSMH entered into a PLSA for a 20% interest in the VLCC "FPMC C Melody" (built 2011) which is trading in Navig8 VL8 pool. The VLCC PLSA was firm until May 2023 with an option period of 12 months until May 2024, which was declared in March 2023. If the pool earnings related to the vessel are higher than the charter rate guaranteed to the vessel owner, ADSMH receives its 20% share of the surplus. Similarly, ADSMH will be liable to pay the vessel owner its share of the shortfall below the guaranteed charter rate, should the pool earnings fall below this threshold. During 2023, the market for VLCCs has been favorable, resulting in solid cash flow to ADSMH from this investment.
- Profit and Loss Sharing Agreement ("PLSA") - subscribed for 20% interest in MR tanker
In May 2022, ADSMH entered into a PLSA for a 20% interest in the MR tanker "Ayoe" (built 2020) which is trading in Navig8 ECO MR pool. The MR tanker PLSA is firm for 36 months until June 2025. As for the VLCC PLSA, if the pool earnings related to the vessel are higher than the charter rate guaranteed to the vessel owner, ADSMH receives its 20% share of the surplus. Similarly, ADSMH will be liable to pay the vessel owner its share of the shortfall below the guaranteed charter rate, should the pool earnings fall below this threshold. During 2023, the market for MR tankers has been favorable, resulting in solid cash flow to ADSMH from this investment.
- AET Sea Shuttle AS ("AET") - investment in shuttle tankers
In June 2022, the Company acquired a 5% shareholding in AET Sea Shuttle AS and AET Sea Shuttle II AS, the owners of 4 modern shuttle tankers (of which two are built in 2015 and two in 2019) operating in the North Sea, mainly on long term charters to Equinor. During 2023, the Company received a total dividend of USD 1,1M of which USD 275k during Q4. from the AET investment.
- United Overseas Products AS ("UOP") - investments in MR tankers
In October 2022, ADSMH acquired a 10% shareholding in UOP, which owns the MR tanker vessels "UOG Oslo" (built 2010) and "UOG Sparta" (built 2009). In addition to the ownership of the vessels, the Company is also acting as Disponent Owner for the project. The Company has during Q3 2023 received USD 100K repayment of invested capital.
5. ParDive Subsea AS ("ParDive") - investment in Dive Support Vessel
In March 2023, the Company acquired a 10% shareholding in ParDive Subsea AS, the owner of the Dive Support Vessel "Southern Star" (built 2017) and acts as Commercial Manager with primary responsibility for following up the shipowning company's activities related to the vessel and its employment. The Company has during 2023 received USD 540k repayment of capital of which USD 180k in Q4 2023.
6. Gram Car Carriers ("GCC") – share acquisition in listed shipowning car carrier
On 30 March 2023, the Company acquired 152.784 shares in Gram Car Carriers ASA (ticker "GCC" on Oslo Stock Exchange) at market terms of NOK 141,20 per share. All shares in "GCC" have during Q2 2023 been sold with profit.
7. Golden Ocean Group "GOGL" – share acquisition in listed shipowning dry bulk carrier
On 6 June 2023, the Company acquired 130.000 shares in Golden Ocean Group (ticker "GOGL" on Oslo Stock Exchange) at market terms of NOK 84,222 per share. The Company has received dividend of USD 26k in 2023 of which USD 13k in Q4 from the investment.
Financial results
Since the Company does not hold any controlling interest in the various shipowning companies it is invested in, the vessels` revenue and operational expenditures are not consolidated in the Profit and Loss statement. In general, the Company's investments will therefore be reflected in the Profit and Loss statement in the following way:
-
- Revenue typically consists of dividends received and various management fees.
-
- Both the direct shipping investments (AET, UOP and ParDive), the PLSA agreements for two vessels and the GOGL shares are categorized as financial assets. Fair value assessments are made regularly for all investments, and any change in the fair value will be categorized in Net Finance.
When comparing the financial results of Q4 2023 and year to date Q4 2023 with the same period last year, please note that investments in the current portfolio were either made after Q3 2022 or were at a very early stage and that there was limited activity in the Company during that period.
In Q4 2023, the Company reports revenue of USD 332k (2022: USD 146k) and year to date Q4 2023 USD 1 358k (2022: USD 150k). Main part of the revenue was dividend received and management fees. Total operating expenses during Q4 2023 were USD 416k (2022: USD 411k) and year to date 2023 USD 1 263k (2022: USD 852k). The increased revenue and costs reflect the increased activity in the Company.
Finance cost of USD 1 669k in Q4 2023 (2022: USD 120k) and year to date 2023 USD 2 572k (2022: USD 316k).
Finance income of USD 2 217k in Q4 2023 (2022: USD 1 121k) and year to date 2023 USD 4 538k (2022: USD 2 975k). This is mostly related to the fair value assessment of the PLSA agreements and other financial assets. Both the VLCC and MR tanker markets have been strong during 2023, resulting in positive adjustments to the valuations and strong cash flows.
Profit before tax was USD 454k in Q4 2023 (2022: USD 752) and year to date 2023 USD 2 020 (2022: USD 1 957)
The Company holds total assets of USD 30 321k, of which USD 9 923k is cash and cash equivalents. Total equity is USD 18 418k or 60,7% of total assets.
Total cash and cash equivalents reduced by USD 2 043k to USD 9 923k during 2023. Total net investments including sale and purchase of shares were USD 5 123k, meaning that the underlying cash flow from operations and existing investments was positive with USD 3 080k.
Risk factors
The Company is exposed to several segments within the shipping industry, all of which are exposed to various types of risks. For further details on the risk factors the Company is exposed to, please see note 3 of the 2022 Annual Report.
Interim consolidated statement of comprehensive income
| (In thousands of USD) Note |
2023 01.10-31.12 |
2022 01.10-31.12 |
2023 01.01-31.12 |
2022 01.01-31.12 |
|---|---|---|---|---|
| Revenue | ||||
| Other income | 332 | 146 | 1 358 | 150 |
| Total revenue | 332 | 146 | 1 358 | 150 |
| Operating expenses | ||||
| Personnel cost | (170) | (222) | (707) | (343) |
| General & administrative costs | (231) | (173) | (501) | (480) |
| Depreciation | (15) | (15) | (55) | (29) |
| Total operating expenses | (416) | (410) | (1 263) | (852) |
| Operating profit | (84) | (264) | 95 | (703) |
| Finance cost | (1 669) | (120) | (2 572) | (316) |
| Finance income | 2 217 | 1 121 | 4 538 | 2 975 |
| Profit before tax | 464 | 737 | 2 061 | 1 957 |
| ncome tax | (10) | - | (41) | |
| Profit after tax and total comprehensive income | 454 | 737 | 2 020 | 1 957 |
| (In USD) | ||||
| Earnings per share attributable to equity holders | ||||
| - Basic and diluted | 0,01 | 0,02 | 0,03 | (0,03) |
Interim consolidated statement of financial position
| (In thousands of USD) | Note | 2023 31.12 |
2022 31.12 |
|---|---|---|---|
| Assets | |||
| Non-current assets | |||
| Right of use assets | 329 | 376 | |
| Financial assets at fair value through profit and loss | 18 432 | 13 317 | |
| Other non-currents assets | 549 | 545 | |
| Total non-current assets | 19 310 | 14 237 | |
| Current assets | |||
| 172 | 630 | ||
| Financial assets at fair value through profit and loss-current Other current assets |
915 | 1 135 | |
| Cash and cash equivalents | 9 923 | 11 966 | |
| Total current assets | 11 010 | 13 371 | |
| Total assets | 30 321 | 27 968 | |
| Equity and liabilities | |||
| Equity | |||
| Issued share capital | 14 202 | 14 202 | |
| Share premium | 207 | 207 | |
| Other issued share capital | 410 | 410 | |
| Retained earnings | 3 600 | 1 696 | |
| Total equity | 18 418 | 16 514 | |
| Non-current liabilities | |||
| Lease liability | 289 | 329 | |
| Long term-loan | 11 120 | 10 561 | |
| Total non-current liabilities | 11 409 | 10 890 | |
| Current liabilities | |||
| Lease liability | 51 | 47 | |
| Other current liabilities | 339 | 339 | |
| Trade payables | 104 | 179 | |
| Total current liabilities | 493 | ર્ રેક | |
| Total liabilities | 11 902 | 11 454 | |
| Total equity and liabilities | 30 321 | 27 968 |
Interim consolidated statement of cash flows
| (In thousands of USD) | 2023 01.01-31.12 |
2022 01.01-31.12 |
|---|---|---|
| Cash flow from operating activities | ||
| Profit for the period | 2 020 | 1 957 |
| Adjustment for non-operating cash flow items | ||
| Depreciation | 55 | 29 |
| Fair value adjustment | (191) | (1 386) |
| Unrealized foreign currency gain(-)/loss(+) | ||
| Dividend received | (2 914) | |
| Interest expense | 288 | |
| Interest income | (467) | (155) |
| Operating cash flow before working capital items | (1 497) | 734 |
| Working capital movements | 140 | (1 180) |
| Total operating cashflow | (1 357) | (446) |
| Cash flow from investing activities | ||
| Investment in subsidiaries | ||
| Investment in financial assets at fair value | (5 123) | (12 560) |
| Change in intercompany receivables | ||
| Dividend and capital received | 3 649 | |
| Total cash flows used in investing activities | (1 474) | (12 560) |
| Cash flow from financing activities | ||
| Proceeds from share issue | 9 935 | |
| Proceeds from loan | 10 281 | |
| Lease payment | (67) | (35) |
| Interest paid | (2) | |
| Interest received | 467 | 155 |
| Dividend and capital repaid | ||
| Total cash flow from financing activities | 400 | 20 334 |
| Effect from foreign currency revaluation on cash | 388 | (56) |
| Net increase in cash and cash equivalents | (2 043) | 7 273 |
| Cash and cash equivalents at beginning of period | 11 966 | 4 693 |
| Cash and cash equivalents at end of period | 9 923 | 11 966 |
| (In thousands of USD apart from number of shares) | Number of shares |
ssued share capital |
Share premium |
Other issued share capital |
Retained earnings |
Total equity |
|---|---|---|---|---|---|---|
| Balance at 1 January 2022 | 23 390 300 | 4 678 | 207 | (256) | 4 629 | |
| Issue of share capital 7/7/2022 at NOK 2,10 per share |
47 619 048 | 9 524 | 410 | 9 934 | ||
| Total comprehensive income for the period | 1 957 | 1957 | ||||
| Currency translation and other effects | (6) | (6) | ||||
| Balance at 31 December 2022 | 71 009 348 | 14 202 | 207 | 410 | 1 696 | 16 514 |
Interim consolidated statement of changes in equity
| (In thousands of USD apart from number of shares) | Number of shares |
ssued share capita |
Share premium |
Other issued share capita |
Retained earnings |
Total equity |
|---|---|---|---|---|---|---|
| Balance at 1 January 2023 | 71 009 348 | 14 202 | 207 | 410 | 1 696 | 16 514 |
| Total comprehensive income for the period | 1 | 2 020 | 2 020 | |||
| Currency translation and other effects | (116) | (116) | ||||
| Balance at 31 December 2023 | 71 009 348 | 14 202 | 207 | 410 | 3 600 | 18 418 |
At 31 December 2023 the Company had issued 71.009.348 shares with par value USD 0.20 per share, totaling USD 14.202 million.
Notes to the interim consolidated financial statements
General information 1.
These interim unaudited consolidated financial statements of ADS Maritime Holding Plc ("ADS Maritime Holding" or the "Company") were authorized for issue in accordance with a resolution of the Board of Directors passed on 22 February 2024.
ADS Maritime Holding Plc is a public limited company listed on the Euronext Growth at the Oslo Stock Exchange.
The Company is incorporated in Cyprus and the address of its registered office is OSM House, 22 Amathountos, 4532 Agios Tychonas, Limassol, Cyprus. The Company is domiciled in Cyprus and has Norwegian subsidiaries based in Arendal, Norway. The principal activities of the Company are shipping investments.
2. Significant accounting policies
2.1. Basis of preparation
These interim financial statements are prepared in accordance with IAS 34 Interim financial reporting as issued by the International Accounting Standards Board (IASB) and as adopted by the interim financial statements do not include all the information and disclosures required by International Financial Reporting Standards (IFRS) for a complete set of financial statements.
The accounting principles applied by the Company in these interim consolidated financial statements are consistent with those applied in the audited annual consolidated financial statements for the year ended 31 December 2022 unless otherwise stated below. Please refer to Note 2 Significant accounting policies in the 2022 Annual Report for information on the Company's accounting policies.
2.2. Going concern
These financial statements have been prepared based on the assumption of going concern.
The Company currently holds investments as described in page 4 in this report. At the end of Q4 2023 the Company had approximately USD 9 923k cash at bank. The Company expects to be reliant on new financing should it consider larger investments in the future.
ADS MARITIME HOLDING PLC
Cyprus
ADS Maritime Holding Plc, OSM House, 22 Amathountos 4532 Agios Tychonas Limassol, Cyprus Tel +357 25335501
Norway
ADSMH Management AS, PO Box 198, 4802 Arendal, Norway Tel: +47 41 49 40 00
Visiting Address Norway Sandvigveien 19 4816 Kolbjørnsvik Norway
Email: [email protected]
www.adsmh.com