Earnings Release • Oct 1, 2021
Earnings Release
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Second Quarter
2021
"The delivery of the last CLEANBU newbuild in late May marks the start of a new chapter for KCC, improving KCC's earnings base and increasing KCC's dividend capacity. Strong dry bulk markets and improved trading efficiency leads to a 20% higher average TCE earnings for the KCC fleet in Q2 relative to Q1. Continued improvements in results are expected for the next two quarters".
Engebret Dahm, CEO Klaveness Combination Carriers ASA
Average CABU TCE earnings (\$/d)
1 I TCE earmings and adjusted EBITDA are alternative performance measures (APMs) defined and reconciled in note 11
| (USD '000) | Q2 2021 | Q1 2021 | Q2 2020 | 1H 2021 | 1H 2020 |
|---|---|---|---|---|---|
| Net revenues from vessel operations | 28 334 | 21 128 | 25 506 | 49 462 | 47 909 |
| EBITDA (note 11) | 14 154 | 8 273 | 15 720 | 22 426 | 28 545 |
| EBITDA adjusted (note 11) | 15 274 | 9 186 | 15 860 | 24 460 | 28 717 |
| Profit/(loss) for the period | 3 457 | (2 045) | 8 359 | 1 411 | 12 673 |
| Earnings per share (USD) | 0.07 | (0.04) | 0.17 | 0.03 | 0.26 |
| Total assets | 617 876 | 596 776 | 485 814 | 617 876 | 485 814 |
| Equity | 201 107 | 211 622 | 215 946 | 201 107 | 215 946 |
| Equity ratio | 33% | 35 % | 44 % | 33 % | 44 % |
| ROCE adjusted (note 11) | 6% | 2 % | 10 % | 4 % | 9 % |
| Q2 2021 | Q1 2021 | Q2 2020 | 1H 2021 | 1H 2020 | |
| Average TCE earnings (note 11) | 20 537 \$/d | 17 184 \$/d | 23 679 \$/d | 18 939 \$/d | 22 111 \$/d |
| Opex per day (note 11) | 7 727 \$/d | 7 693 \$/d | 7 748 \$/d | 7 712 \$/d | 7 689 \$/d |
| Onhire days | 1 368 | 1 244 | 1 071 | 2 612 | 2 154 |
| Off-hire days, scheduled | 50 | 47 | 9 | 97 | 9 |
| Off-hire days, unscheduled | 5 | 5 | 11 | 10 | 20 |
| % of days in combination trades1 | 59 % | 68 % | 67% | 65 % | 76 % |
| Utilisation2 | 93 % | 91 % | 95% | 92 % | 94 % |
Adjusted EBITDA for the period ended at USD 15.3 million down from USD 15.9 million in Q2 2020 and up from USD 9.2 million last quarter. The increase from Q1 2021 is mainly due to solid TCE earnings on the back of a booming dry bulk market and higher vessel capacity from delivered newbuilds, while dry bulk forward freight agreements (FFA) negatively impacted the TCE earnings and revenue in the quarter. The tanker market was historically weak throughout the quarter and part of the CLEANBU fleet capacity has been allocated into the dry bulk market. Operating expenses increased in second quarter mainly due to a higher number of vessels and start-up expenses related to newbuilds. Net profit after tax for second quarter ended at USD 3.5 million compared to negative USD 2.0 million in Q1 2021 and a record high USD 8.4 million in Q2 2020. The strong Q2 2020 result was driven by a very strong tanker market.
Travel restrictions related to COVID-19 continue to impact the delivery of the last newbuilds, while COVID-19 related off-hire was limited to two days in second quarter. The total negative COVID-19 impact is estimated to be approximately USD 2.2 million for Q2 2021 compared to approximately USD 1.9 million in Q1 2021, a large part related to delivery of newbuilds.
Adjusted EBITDA for first half 2021 ended at USD 24.5 million, down from USD 28.7 million in first half 2020, mainly due to lower TCE earnings for the fleet and phase in of three CLEANBU newbuilds in 2021 impacted by COVID-19 restrictions. The solid results for first half 2020 were driven by a strong tanker market, efficient combination trading and limited scheduled off-hire. Phase-in of the three CLEANBUs in first half of 2021 took in total 121 days from delivery from yard until start of trading and three vessels had in total 96 off-hire days due to scheduled dry-docking in first half 2021 compared to 10 scheduled off-hire days in first half of 2020.
Cash and cash equivalents ended at USD 30.8 million by end of Q2 2021, down from USD 65.7 million at year-end 2020. The equity ratio ended at 32% per end of Q2 2021 down from 39% at year-end 2020 while interest-bearing debt increased by USD 89.2 million over the six-months period. These balance sheet items were mainly driven by delivery and debt financing of the last three CLEANBU newbuilds and temporary negative effects of freight derivatives on cash and other comprehensive income/equity. KCC, through a subsidiary, had per end of June USD 12.5 million available and undrawn under a 364-days overdraft facility maturing in December 2021.
On 24 August 2021, the Company's Board of Directors declared to pay a cash dividend to the Company's shareholders of USD 2.16 million for Q2 (USD 0.045 per share). A subsidiary of the Company concluded in July a contract of affreightment (COA) for transportation of clean petroleum products (CPP) for the CLEANBU fleet with a major international charterer in the CPP market.
1 % of days in combination trades = number of days in combination trades as a percentage of total on-hire days. A combination trade starts with wet cargo (usually caustic soda or clean petroleum products), followed by a dry bulk cargo. A combination trade is one which a standard tanker or dry bulk vessel cannot perform. The KPI is a measure of KCC's ability to operate our combination carriers in trades with efficient and consecutive combination of wet and dry cargos versus trading as a standard tanker or dry bulk vessel. There are two exceptions to the main rule where the trade is considered to be a combination trade: Firstly, in some rare instances a tanker cargo is fixed instead of a dry bulk cargo out of the dry bulk exporting region where KCC usually transports dry bulk commodities. E.g. the vessel transports clean petroleum products to Argentina followed by a veg oil cargo instead of a grain cargo on the return leg. Secondly, triangulation trading which combines two tanker voyages followed by a dry bulk voyage with minimum ballast in between the three voyages (e.g. CPP Middle East-Far East+CPP Far East Australia+Dry bulk Australia-Middle East) are also considered combination trade. The KPI has been changed with effect from 1 January 2021 and 2020 figures have been adjusted. Previously the definition of a combination trade was based on the main trading patterns and contract of affreightment portfolio (CABU trades Far East/Middle East - Australia and US Gulf-Brazil, CLEANBU trades Middle East/India-South America). The CLEANBU segment has been established and the CABU business has developed, hence the updated definition better reflects how often KCC succeeds to combine wet and dry cargo.
| KEY FIGURES | Q2 2021 | Q1 2021 | Q2 2020 | 1H 2021 | 1H 2020 |
|---|---|---|---|---|---|
| Average TCE earnings (note 2) | 21 932 \$/d | 16 722 \$/d | 21 290 \$/d | 19 402 \$/d | 20 784 \$/d |
| Opex per day (note 2) | 7 493 \$/d | 7 457 \$/d | 7 210 \$/d | 7 475 \$/d | 7 157 \$/d |
| Onhire days | 811 | 766 | 807 | 1 578 | 1 622 |
| Off-hire days, scheduled | 5 | 39 | 9 | 44 | 9 |
| Off-hire days, unscheduled | 3 | 4 | 2 | 8 | 6 |
| % of days in combination trades1 | 79 % | 65 % | 85 % | 75 % | 88 % |
| Ballast days in % of total on-hire days3 | 14 % | 16 % | 12 % | 15 % | 14 % |
| Utilisation2 | 96 % | 93 % | 94 % | 94 % | 94 % |
Average TCE earnings per on-hire day for the CABU vessels for Q2 2021 ended at \$21,932/day, up from both Q2 2020 (\$21,290/day) and Q1 2021 (\$16,722/day). TCE earnings for the CABU fleet were 2.9 times higher than the spot market for standard MR tankers4 , driven by strong dry bulk earnings and 87% combination trading in the Pacific basin where approx. 80% of the fleet was employed in Q2.
Operating costs for second quarter are in line with previous quarter and up approximately \$285/day compared to Q2 2020 mainly due to periodisation effects and timing of procurement to vessels. The fleet had limited off-hire in second quarter with in total eight scheduled and unscheduled days. One CABU vessel completed scheduled dry docking in early April.
Average TCE earnings per on-hire day for the CABU vessels for first half 2021 ended at \$19,402/day, compared to \$20,784/day for first half 2020 and \$18,900/day for second half 2020. 1H 2021 earnings were negatively impacted by a considerably weaker tanker market than in 2020 through lower earnings on both caustic soda freight contracts and spot wet shipments. The strong dry bulk market in 1H 2021 with Panamax spot rates around four times higher than in 1H 2020 had strong positive earnings effects, partly offset by negative value of FFA contracts.
Operating expenses have increased approximately \$320/day from 1H 2020 to 1H 2021, in line with the change from Q2 2020 to Q2 2021. KCC had no COVID-19 off-hire in 1H 2020 and a limited six days in 1H 2021, considerably down from second half 2020 (55 days). Two CABU vessels have completed dry docking in 1H 2021, early January and early April respectively.
| KEY FIGURES | Q2 2021 | Q1 2021 | Q2 2020 | 1H 2021 | 1H 2020 |
|---|---|---|---|---|---|
| Average TCE earnings (note 2) | 18 499 \$/d | 17 924 \$/d | 30 983 \$/d | 18 233 \$/d | 25 918 \$/d |
| Opex per day (note 2) | 8 011 \$/d | 8 053 \$/d | 9 361 \$/d | 8 030 \$/d | 9 280 \$/d |
| Onhire days | 556 | 478 | 264 | 1 034 | 532 |
| Off-hire days, scheduled | 45 | 8 | - | 53 | - |
| Off-hire days, unscheduled | 2 | 0 | 9 | 2 | 14 |
| % of days in combination trades1 | 30 % | 73 % | 15 % | 50 % | 40 % |
| Ballast days in % of total on-hire days3 | 28 % | 24 % | 29 % | 25 % | 23 % |
| Utilisation2 | 89 % | 88 % | 99 % | 89 % | 96 % |
The CLEANBU fleet outperformed the LR1 tanker vessel spot earnings by a multiple of 1.64 in second quarter 2021. Average CLEANBU TCE earnings per on-hire day ended at \$18,499/day, up by \$575/day compared to last quarter. TCE earnings were in comparison \$30,983/day same quarter last year mainly due to fixing all three CLEANBU vessels on TC contracts in the booming tanker market in March-May 2020. In the historically weak tanker market with tanker earnings below operating cost levels and clean petroleum trade-flows disrupted by COVID-19 effects, five out of seven CLEANBUs were employed as dry bulk standard vessels in second quarter highly benefitting from the strong dry bulk market. Consequently, the share of the capacity in combination trading fell to 30% for second quarter. TCE earnings were negatively impacted by generally poor tanker earnings impacting two vessels employed in combination trading in the quarter.
The development of new combination trades progressed well during the quarter while some business development costs were incurred. The first combination voyage with iron ore from Brazil to Europe and return with naphtha was successfully completed in June 2021. The Company also strengthened its foothold in the Australian market with fixture of one CPP voyage to Australia on a maiden voyage on MV Bass in May. The conclusion of the longest and largest CPP contract of affreightment to date with a major international charterer in the CPP market in July marked an important milestone for the Company's CLEANBU business. This contract with a duration of one to three years, reflects a growing tanker market acceptance of the CLEANBU vessels' CPP/dry bulk combination trading.
The fleet had in total approx. 0.3 more vessel years on-hire compared to last quarter due to delivery of newbuilds. The seventh CLEANBU vessel, MV Bass, was delivered on 25 March 2021 and the vessel started trading early May. The eighth CLEANBU vessel, MV Balzani, was delivered 25 May 2021 and started trading early July, completing the newbuild program. The number of days from delivery of newbuilds to start of trading continued to be negatively impacted by COVID-19 as a Chinese crew takes delivery of the vessels prior to changing crew in South Korea and the number of days from delivery until start of trading has been quite stable for the three vessels delivered in 2021, average 42 days per vessel.
Average operating costs for the CLEANBU vessels ended at \$8,011/day, in line with previous quarter and approximately \$1,350/day lower than same quarter last year, partly reflecting normalization of technical operation of the CLEANBU vessels delivered in 2019 and 2020 and partly due to periodisation effects.
1 % of days in combination trades = see definition on page 3 2 Utilisation = Operating days less waiting time less off-hire days)/operating days.
3 Ballast in % of on-hire days = Number of days in ballast /number of on-hire days. Ballast days when the vessel is off-hire are not included.
4 Clarksons, MR (CABU) and LR1 (CLEANBU) tanker multiple calculated based on assumption of one month advance cargo fixing/«lag»
The fleet had limited unscheduled off-hire in Q2 2021 of two days, with no COVID-19 related off-hire. Yard guarantee work related to MV Barramundi was completed mid-May with a total of 53 off-hire days, partly covered by loss of hire insurance of in total USD 0.5 million recognised in second quarter. Guarantee work for additional two CLEANBU vessels was targeted to be completed in the period July-October 2021 with total off-hire estimated to be in total 90-115 days. Due to increased COVID-19 infection numbers, the region around the shipyard was closed in early August and the guarantee repairs of both vessels have been postponed to Q4 2021 and 1H 2022. Estimated 25-35% of off-hire days connected to these three vessels will be covered by loss of hire insurance.
Average TCE earnings for first half 2021 were \$18,233/day compared to \$25,918/day in first half 2020. Utilization was somewhat lower in 1H 2021 (89%) compared to 1H 2020 (96%), while combination trading was up 10%-points. The strong 1H 2020 TCE earnings were impacted by the tanker TC contracts.
Operating expenses for 1H 2021 is down \$1,250/day from 1H 2020 due to same reasons as commented on second quarter. Unscheduled off-hire was down 12 days when comparing the two periods, whereof 9 days lower COVID-19 related off-hire.
| AVERAGE MARKET RATES2 | Q2 2021 | Q1 2021 | Q2 2020 | 2020 |
|---|---|---|---|---|
| Dry Bulk rates - P5TC (\$/day)1 | 26 052 | 18 493 | 7 390 | 9 906 |
| MR Tanker rates - TC7 (\$/day)1 | 7 662 | 6 641 | 25 888 | 14 282 |
| LR1 Tanker rates - TC5 (\$/day)1 | 5 917 | 5 168 | 44 691 | 19 441 |
| Bunkers price - VLSFO (\$/mt) 2 | 505 | 479 | 273 | 371 |
Earnings of KCC's combination carriers are driven by the Panamax dry bulk market, MR and LR1 product tanker markets and fuel markets.
Second quarter 2021 dry bulk freight rates delivered the best quarter in 11 years. All segments had high earnings but on a relative basis the smaller sizes outperformed the larger sizes when compared to their historical averages, and Panamax earnings averaged \$26,052/day forthe quarter.
Total dry bulk volumes increased with 8.7% Y-o-Y, while total Panamax volumes across all commodities were up 9.6% Y-o-Y in Q2. Minor bulk and coal volumes grew strongly, 22% Y-o-Y and 13% Y-o-Y respectively, as global industrial production recovered from the peak COVID-19 period in 2020. Grain volumes were up a modest 2.3% Y-o-Y as strong demand was covered with very high Q1 2021 shipments. Iron ore volumes were up a meagre 0.9% Y-o-Y in Q2 as seaborne exporters failed to ramp up output to meet the strong demand, while bauxite volumes were down 13% Y-o-Y, explaining why Capesize earnings have been relatively low compared to the smaller segments and partly explaining the Capesize vessels' increased market share in the coal trade at the expense of the smaller segments. The Capesize segment recorded a 34% Y-o-Y growth in coal loadings in Q2 compared to a 7% growth in the Panamax segment. While Panamax earnings in Q2 2021 were very strong from a historical perspective, rates would likely have been even higher if iron ore exporters had been able to meet the strong growth in iron ore demand.
The nominal fleet growth in the Panamax segment was reported at 4.5% Y-o-Y in Q2, with effective Y-o-Y fleet growth in the quarter at 3.6%3 . The Q2 growth in volumes of 8.7% hence exceeded the effective dry bulk fleet growth of 3.5% with a wide margin, resulting in higher utilization and increased freight rates.
The weakness in the product tanker market continued during second quarter. The average TCE-earnings for the LR1 route from Middle East to Japan (TC5) was \$5,917/day in second quarter, only a slight improvement compared to the first quarter of 2021. While oil demand has improved compared to 2020, oil production is lagging demand. The deficit has been made up by drawdowns on inventories built during 2020, and the demand for seaborne transportation of crude and oil products has remained weak. Oil supply and demand is expected to improve over the year, and inventory levels have normalized. OPEC+ announced production increases of 400,000 barrels per day and EIA estimates that oil consumption will increase to above 100 million barrels per day towards the end of this year. Higher demand coupled with low fleet growth, may spur an improvement in rates during this year and into 2022. Refinery closures in Australia, Europe and the US and refinery additions in the Middle East could in addition improve ton-mile demand further. The COVID-19 situation continues to be a major risk to the outlook with potential for renewed and prolonged lockdowns and travel restrictions as virus variants continue to spread.
The international caustic soda market has been tight year-to-date due to recovering demand and several production issues of US Gulf producers, partly caused by the cold weather situation in Texas in February. As a consequence, US exports to Australia have continued to fall in 1H 2021 compared to last year, leading to increased Australian caustic soda sourcing from the Far East. Market balance in the Far East is expected to continue to be tight over the coming months.
Brent crude oil prices ended at around USD 75 per barrel at end of Q2 2021, up 18% Q-o-Q. Average fuel oil price (VLSFO) ended at USD 505/mt, an increase of around 6% Q-o-Q.
| HEALTH AND SAFETY KPIs | Q2 2021 | Q1 2021 | Q2 2020 | 1H 2021 | 1H 2020 |
|---|---|---|---|---|---|
| # of medium7 injuries |
- | - | - | 3 | |
| # of major8 injuries |
- | - | - | - | - |
| # of navigational incidents | - | - | - | - | |
| # of spills to the environment | - | - | 1 | - | 1 |
Safety is KCC's priority number one and to the Board's satisfaction there were no "major" or "medium" rated incidents and no navigational incidents or spills to the environment in Q2 2021 and there have not been any major or medium personal injuries on KCC's fleet since early March 2020. It is with great sadness we report a fatality related to a fall accident on board a vessel in third quarter. The person was seriously injured and passed away in hospital afterthree weeks. The incident is under investigation to conclude on cause and corrective actions. Further information will be provided in the third quarter report.
The COVID-19 management plan implemented in Q3 2020 to ensure the health and safety of our crew, with increased testing and strict quarantine procedures for crew, has worked as intended and there have not been any COVID-19 cases onboard our vessels since the management plan was implemented. Special focus has been placed on carrying through scheduled crew changes and to repatriate as many as possible of KCC's crew at the end of their service period without delays. By the end of second quarter 2021 7.4% of crew had extended their contract by more than 30 days, compared to 4.8% by the end of Q1. Approximately 30% of KCC's sailors are fully vaccinated, however, no beneficiary measures have been made on crew change requirements for those vaccinated in countries and ports being called by KCC vessels. Hence, crew changes are still challenging and the increase in number of crew on extended contracts vary with trading pattern and ports called available for crew changes.
| ENVIRONMENTAL KPIs | TARGET 2022 | LAST 12 MONTHS |
2020 | Q1 2021 | Q2 2021 | BENCHMARK |
|---|---|---|---|---|---|---|
| CO2 emission per ton transported cargo per nautical mile (EEOI)(grams CO2/(tons cargo x nautical miles))1,5,6 |
5.8 | 7.5 | 7.4 | 7.4 | 8.3 | 10.1 |
| Average CO2 emission per vessel (metric tons CO2 / vessel-year)2,6 |
17,700 | 20,600 | 20,700 | 20,100 | 18, 300 | N.A. |
| % of days in combination trades3 | 90% | 64 % | 77% | 72 % | 59 % | N.A. |
| Ballast days in % of total on-hire days4,5 | 7.5% | 16 % | 15% | 19 % | 19 % | 30 % |
CO2 emissions per ton transported cargo per nautical mile (EEOI) ended at 8.3 for second quarter of 2021, up from 7.4 in first quarter 2021 and above average for the last 12 months. The increase is explained by less distance sailed and less cargo weight transported due to more port calls to draft-restricted ports, and several vessels spending more days in port and at anchor waiting to enter port due to increased port congestion.
Average CO2 emissions per vessel was 18,300 in second quarter, down from 20,100 in Q1 compared to an average of 20,600 over the last twelve months. Improvement is partly due to shorter distances sailed this quarter, but is also reflecting an increase in overall fleet performance and energy efficiency. For the vessels that have completed dry-docking during 2020 and 2021, performance has improved after installation of various energy saving devices and application of top-grade silicone anti-fouling coating. Emissions were as well positively impacted by improved operational efficiency from the onboard route optimization service that part of the fleet has been testing over the last six months, as well as the introduction of a speed reduction of 0.5 knot for the CABU fleet when possible.
Ballast days in % of total on-hire days 19 % this quarter in line with previous quarter. This is above average for the last twelve months due to high share of CLEANBU fleet trading as standard dry bulk vessels.
1 EEOI (Energy Efficiency Operational Index) is defined by IMO and represents grams CO2 emitted per transported ton cargo per nautical mile for a period of time (both fuel consumption at sea and in port included).
2 Average CO2 emissions per vessel = total CO2 emissions in metric tons/vessel years. Vessel years = days available – off-hire days at yard. When new vessels are delivered to the fleet, the vessel years are calculated from the date the vessel is delivered .
3 % of days in combination trades = see definition on page 3.
4 Ballast in % of on-hire days = Number of days in ballast /number of on-hire days. Ballast days when the vessel is off-hire are not included.
5 Benchmark: The EEOI and % ballast for "Benchmark standard vessels" are calculated based on standard vessels (Panamax/Kamsarmax dry bulk vessels, MR-tankers and LR1-tankers) making the same transportation work in the same trades as performed by KCC's CABU and CLEANBU vessels. The EEOI for "Benchmark standard vessels" is calculated as the weighted average of EEOI for the individual trades performed. There is a degree of uncertainty related to the benchmark values as these are estimated using data from Baltic Exchange and AXS Marine.
6 Calculation of Q1 2021 has changed from 20,900 to 20,100 due to updated data from the newly delivered vessels that was not included in Q1 reporting.
7 Medium = medical treatment and repatriation, will return to work 8 Major= Severe injury death
Oslo, 24 August 2021
The Board of Directors of
Klaveness Combination Carriers ASA
The Board and CEO have reviewed and approved the condensed financial statements for the period 1 January to 30 June 2021. To the best of our knowledge, we confirm that:
Oslo, 24 August 2021
The Board of Directors of
Klaveness Combination Carriers ASA
Magne Øvreås Board member
Lasse Kristoffersen
Chairman of the Board
Winifred Patricia Johansen Board member
Rebekka Glasser Herlofsen Board member
Morten Skedsmo
Board member
Engebret Dahm CEO
| Unaudited | Unaudited | Audited | ||||
|---|---|---|---|---|---|---|
| USD'000 | Notes | Q2 2021 | Q2 2020 | 1H 2021 | 1H 2020 | 2020 |
| Freight revenue | 3 | 37 259 | 32 506 | 68 878 | 76 483 | 142 289 |
| Charter hire revenue | 3 | 8 235 | 7 391 | 14 002 | 8 152 | 20 442 |
| Other revenue | 3 | 482 | 134 | 482 | 134 | - |
| Total revenues, vessels | 45 976 | 40 031 | 83 363 | 84 769 | 162 731 | |
| Voyage expenses | (17 642) | (14 525) | (33 901) | (36 860) | (71 592) | |
| Net revenues from operations of vessels | 28 334 | 25 506 | 49 462 | 47 909 | 91 139 | |
| Operating expenses, vessels | (12 502) | (8 493) | (23 629) | (16 746) | (37 193) | |
| Group commercial and administrative services | 9 | (821) | (776) | (1 833) | (1 601) | (3 538) |
| Salaries and social expense | 9 | (525) | (280) | (930) | (514) | (1 327) |
| Tonnage tax | (68) | (48) | (108) | (57) | (180 | |
| Other operating and administrative expenses | (264) | (189) | (534) | (446) | (776) | |
| Operating profit before depreciation (EBITDA) | 14 154 | 15 720 | 22 426 | 28 545 | 48 125 | |
| Ordinary depreciation | 4 | (7 032) | (4 358) | (14 026) | (8 711) | (19 155) |
| Operating profit after depreciation (EBIT) | 7 122 | 11 362 | 8 401 | 19 834 | 28 971 | |
| Finance income | 7 | 146 | 183 | 254 | 307 | 529 |
| Finance costs | 7 | (3 811) | (3 186) | (7 243) | (7 468) | (14 317) |
| Profit before tax (EBT) | 3 457 | 8 359 | 1 412 | 12 673 | 15 182 | |
| Income tax expenses | - | - | (1) | - | - | |
| Profit after tax | 3 457 | 8 359 | 1 411 | 12 673 | 15 182 | |
| Attributable to: | ||||||
| Equity holders of the parent company | 3 457 | 8 359 | 1 411 | 12 673 | 15 182 | |
| Total | 3 457 | 8 359 | 1 411 | 12 673 | 15 182 | |
| Earnings per Share (EPS): | ||||||
| Basic and diluted, profit for the period attributable to ordinary equity holders of the Parent Company |
0.07 | 0.17 | 0.03 | 0.26 | 0.32 |
| Unaudited | Unaudited | Audited | |||
|---|---|---|---|---|---|
| Q2 2021 | Q2 2020 | 1H 2021 | 1H 2020 | 2020 | |
| USD '000 | |||||
| Profit/ (loss) of the period | 3 457 | 8 359 | 1 411 | 12 673 | 15 182 |
| Other comprehensive income to be reclassified to profit or loss | |||||
| Net movement fair value on cross-currency interest rate swaps (CCIRS) | (102) | 1 550 | 1 296 | (8 022) | 1 253 |
| Reclassification to profit and loss (CCIRS) | (293) | (1 715) | 39 | 3 960 | (3 715) |
| Net movement fair value on interest rate swaps | (345) | (938) | 2 540 | (3 814) | (2 491) |
| Net movement fair value FX hedge | - | - | - | - | 87 |
| Net movement fair value bunker hedge | 38 | 743 | (63) | (409) | - |
| Net movement fair value FFA hedge | (11 849) | 134 | (17 799) | (398) | (1 814) |
| Net other comprehensive income to be reclassified to profit or loss | (12 551) | (226) | (13 986) | (8 683) | (6 680) |
| Total comprehensive income/(loss) for the period, net of tax | (9 094) | 8 133 | (12 576) | 3 990 | 8 502 |
| Attributable to: | |||||
| Equity holders of the Parent Company | (9 094) | 8 133 | (12 576) | 3 990 | 8 502 |
| Total | (9 094) | 8 133 | (12 576) | 3 990 | 8 502 |
(Figures in USD '000)
| Unaudited | Audited | ||
|---|---|---|---|
| ASSETS | Notes | 30 Jun 2021 | 31 Dec 2020 |
| Non-current assets | |||
| Vessels | 4 | 551 025 | 404 258 |
| Newbuilding contracts | 5 | - | 48 441 |
| Right of-use assets | 1 929 | 1 672 | |
| Long-term financial assets | 6 | 5 476 | 3 427 |
| Long-term receivables | 70 | 70 | |
| Total non-current assets | 558 500 | 457 868 | |
| Current assets | |||
| Short-term financial assets | 6 | 25 | 87 |
| Inventories | 10 410 | 6 159 | |
| Trade receivables and other current assets | 17 805 | 18 501 | |
| Short-term receivables from related parties | 289 | 742 | |
| Cash and cash equivalents | 30 847 | 65 685 | |
| Total current assets | 59 376 | 91 174 | |
| TOTAL ASSETS | 617 876 | 549 043 |
| EQUITY AND LIABILITIES | Unaudited 30 Jun 2021 |
Audited 31 Dec 2020 |
|
|---|---|---|---|
| Equity | |||
| Share capital | 8 | 5 725 | 5 725 |
| Share premium | 130 155 | 130 155 | |
| Other reserves | (23 378) | (6 511) | |
| Retained earnings | 88 604 | 87 162 | |
| Total equity | 201 107 | 216 532 | |
| Non-current liabilities Mortgage debt |
6 | 218 669 | 206 813 |
| Long-term financial liabilities | 6 | 3 667 | 5 409 |
| Long-term lease liabilities | 1 393 | 1 239 | |
| Bond loan | 6 | 80 774 | 80 649 |
| Total non-current liabilities | 304 503 | 294 110 | |
| Current liabilities | |||
| Short-term mortgage debt | 6 | 87 515 | 22 473 |
| Other interest bearing liabilities | 6 | 7 493 | - |
| Short-term financial liabilities | 6 | - | 757 |
| Short-term lease liabilities | 609 | 493 | |
| Trade and other payables | 15 709 | 13 165 | |
| Short-term debt to related parties | 827 | 1 339 | |
| Tax liabilities | 121 | 175 | |
| Total current liabilities | 112 266 | 38 402 | |
| TOTAL EQUITY AND LIABILITIES | 617 876 | 549 043 |
The Board of Directors of
Klaveness Combination Carriers ASA
Chairman of the Board
Magne Øvreås
Morten Skedsmo
Board member
Board member
Winifred Patricia Johansen
Board member
Rebekka Glasser Herlofsen
Board member
Engebret Dahm CEO
(Figures in USD '000)
| Attributable to equity holders of the parent | ||||||
|---|---|---|---|---|---|---|
| Unaudited 2021 |
Share capital |
Other paid in capital |
Treasury Shares |
Hedging reserve |
Retained earnings |
Total |
| Equity 1 January 2021 | 5 725 | 130 155 | (147) | (6 363) | 87 162 | 216 532 |
| Profit (loss) for the period | - | - | - | - | 1 411 | 1 411 |
| Other comprehensive income for the period | - | - | - | (13 986) | - | (13 986) |
| Share option program | - | - | - | - | 31 | 31 |
| Dividends | - | - | (2 882) | - | - | (2 882) |
| Equity at 30 June 2021 | 5 725 | 130 155 | (3 029) | (20 349) | 88 604 | 201 107 |
| Unaudited 2020 |
Share capital |
Other paid in capital |
Treasury Shares |
Hedging reserve |
Retained earnings |
Total |
|---|---|---|---|---|---|---|
| Equity 1 January 2020 | 5 725 | 130 155 | - | 316 | 76 744 | 212 941 |
| Profit (loss) for the period | - | - | - | - | 12 673 | 12 673 |
| Other comprehensive income for the period | - | - | - | (8 683) | - | (8 683) |
| Purchase of own shares | - | - | (19) | - | - | (19) |
| Share option program | - | - | - | - | 19 | 19 |
| Dividends | - | - | - | - | (1 921) | (1 921) |
| Equity at 30 June 2020 | 5 725 | 130 155 | (19) | (8 367) | 87 545 | 215 010 |
| Audited 2020 |
Share capital |
Other paid in capital |
Treasury Shares |
Hedging reserve |
Retained earnings |
Total |
|---|---|---|---|---|---|---|
| Equity 1 January 2020 | 5 725 | 130 155 | - | 316 | 76 744 | 212 941 |
| Profit (loss) for the period | - | - | - | - | 15 182 | 15 182 |
| Other comprehensive income for the period | - | - | - | (6 679) | - | (6 679) |
| Dividends | - | - | - | - | (4 803) | (4 803) |
| Purchase of own shares | - | - | (147) | - | - | (147) |
| Share option program | - | - | - | - | 39 | 39 |
| Equity at 31 December 2020 | 5 725 | 130 155 | (147) | (6 363) | 87 162 | 216 532 |
(Figures in USD '000)
| Unaudited | Unaudited | Audited | ||||
|---|---|---|---|---|---|---|
| Notes | Q2 2021 | Q2 2020 | 1H 2021 | 1H 2020 | 2020 | |
| Profit before tax | 3 457 | 8 359 | 1 412 | 12 673 | 15 182 | |
| Tonnage tax expensed | 68 | 48 | 108 | 57 | 180 | |
| Ordinary depreciation | 4 | 7 032 | 4 358 | 14 026 | 8 711 | 19 155 |
| Amortization of upfront fees bank loans | 211 | 131 | 402 | 346 | 693 | |
| Financial derivatives unrealised loss / gain (-) | 6 | (9) | 21 | 44 | (733) | (342) |
| Gain/loss on foreign exchange | 21 | (132) | (31) | 123 | (4) | |
| Interest income | 7 | (146) | (20) | (254) | (251) | (271) |
| Interest expenses | 7 | 3 811 | 2 989 | 7 243 | 5 975 | 11 884 |
| Taxes paid for the period | - | - | - | - | - | |
| Change in current assets | (2 733) | 7 777 | (3 859) | 1 845 | (3 797) | |
| Change in current liabilities | 2 672 | (886) | 1 804 | (5 893) | (3 438) | |
| Collateral paid/refunded on FFA (variation margin) | 6 | (11 848) | - | (17 798) | - | - |
| Interest received | 7 | 146 | 20 | 254 | 251 | 271 |
| A: Net cash flow from operating activities | 2 681 | 22 666 | 3 350 | 23 105 | 39 513 | |
| Acquisition of tangible assets | 4 | (2 335) | (373) | (6 749) | (535) | (4 271) |
| Installments and other cost on newbuilding contracts** | 5 | (35 394) | (15 826) | (105 322) | (21 484) | (88 634) |
| B: Net cash flow from investment activities | (37 729) | (16 199) | (112 071) | (22 019) | (92 905) | |
| Proceeds from mortgage debt | 34 000 | - | 89 000 | - | 60 450 | |
| Proceeds from bond loan (KCC04) | 6 | - | - | - | 54 028 | 76 390 |
| Buyback of bond loan (KCC03) | 6 | - | - | - | (17 879) | (33 861) |
| Transaction costs on issuance of loans | 6 | (360) | - | (1 036) | (870) | (1 914) |
| Repayment of mortgage debt | 6 | (6 113) | (4 342) | (11 344) | (8 684) | (17 367) |
| Terminated financial instruments | - | - | - | (3 101) | (3 101) | |
| Collateral paid/refunded on financial instruments | - | 2 910 | - | - | - | |
| Interest paid | 7 | (3 637) | (3 185) | (7 068) | (5 453) | (11 370) |
| Repayment of financial lease liabilities | (146) | (108) | (281) | (216) | (454) | |
| Purchase of own shares | - | (11) | - | (19) | (147) | |
| Dividends | (1 441) | (1 441) | (2 882) | (1 921) | (4 802) | |
| C: Net cash flow from financing activities | 22 304 | (6 177) | 66 390 | 15 885 | 63 824 | |
| Effect of exchange rate change on cash | ||||||
| Net change in liquidity in the period | (12 745) | 291 | (42 331) | 16 971 | 10 431 | |
| Cash and cash equivalents at beginning of period | 36 099 | 71 934 | 65 685 | 55 254 | 55 254 | |
| Cash and cash equivalents at end of period* | 23 354 | 72 225 | 23 354 | 72 225 | 65 685 | |
| Net change in cash and cash equivalents in the period | (12 745) | 291 | (42 331) | 16 971 | 10 431 | |
| Cash and cash equivalents | 30 847 | 72 232 | 30 847 | 72 232 | 65 685 | |
| Other interest bearing liabilities (overdraft facility) | 7 493 | 8 | 7 493 | 8 | - | |
| Cash and cash equivalents (as presented in cash flow statement) | 23 354 | 72 225 | 23 354 | 72 225 | 65 685 |
* Cash and cash equivalents include overdraft facility of USD 7.5 million (as per 30 June 2021) presented as interest bearing liabilities in the balance sheet.
** Yard installement of USD 35 million is related to delivery of newbuilding Balzani 25 May 2021.
| 01 | Accounting policies |
|---|---|
| 02 | Segment reporting |
| 03 | Revenue from contracts with customers |
| 04 | Vessels |
| 05 | Newbuildings |
| 06 | Financial assets and financial liabilities |
| 07 | Financial items |
| 08 | Share capital, shareholders, dividends and reserves |
| 09 | Transactions with related parties |
| 10 | Events after the balance sheet date |
| Reconciliation of alternative |
Klaveness Combination Carriers ASA ("Parent Company/The Company/KCC") is a public limited liability company domiciled and incorporated in Norway. The share is listed on Euronext Expand (formerly Oslo Axess) with ticker KCC. The consolidated interim accounts include the Parent Company and its subsidiaries (referred to collectively as "the Group").
The objectives of the Group is to provide transportation for dry bulk, chemical and product tanker clients, as well as to develop new investment and acquisition opportunities that fit the Group's existing business platform. The Group has nine CABU vessels, vessels with capacity to transport caustic soda (CSS), floating fertilizer (UAN) and molasses as well as all dry bulk commodities. In addition, the Group has eight CLEANBU vessels in operation. The CLEANBUs are both full fledged LR1 product tankers and Kamsarmax dry bulk vessels.
The interim condensed financial statements of the Group have been prepared in accordance with International Financial Reporting Standards ("IFRS") as endorsed by the Europen Union and are based on IAS 34 Interim Financial Reporting. The interim condensed financial statements of the Group should be read in conjunction with the audited consolidated financial statements for the year ended 31 December 2020, which have been prepared in accordance with IFRS, as adopted by the European Union.
In Q1 2021, MV Barracuda was resold internally from KCC KBA AS to KCC Shipowning AS. KCC KBA AS is under ordinary taxation, and the company will have a tax cost for the year related to the vessel operation and resale carried out in Q1; however, this will be covered by losses carried forward in the Group such that the Group as a whole does not have any tax cost in the period.
Klaveness Combination Carriers Asia Pte Ltd (Singapore) was incorporated on 22 March 2021 based on capital injection of USD 300 000 from Klaveness Combination Carriers ASA (100% ownership, 300 000 shares). The commercial and operation team of four employees fromKlaveness Asia Pte Ltd were transferred to this company on 1 June 2021.
The accounting policies adopted in the preparation of the interim condensed consolidated financial statements are consistent with those followed in the preparation of the annual consolidated financial statements of the year ended 31 December 2020 except for the adoption of any new accounting standards or amendments with effective date after 1 January 2021. There was no material impact of new accounting standards or amendments adopted in the period.
The Group is an owner and operator of combination carriers and operates mainly within the dry bulk shipping industry and the product tanker industry. The Group owns nine CABUs and eight CLEANBUs .The eighth CLEANBU vessel was delivered on 25 May 2021.
The CABUs are from 72,456 dwt to 80,344 dwt and have the capacity to transport caustic soda solution (CSS), floating fertilizer (UAN) and molasses as well as all types of dry bulk commodities.
The CLEANBUs have approximately 82,500 dwt carrying capacity. The CLEANBUs are both full-fledged LR1 product tankers and Kamsarmax bulk carriers transporting clean petroleum products (CPP), heavy liquid cargoes such as CSS, UAN and molasses as well as all types of dry bulk products.
| Q2 2021 | Q2 2020 | |||||
|---|---|---|---|---|---|---|
| USD'000 | CABU | CLEANBU | Total | CABU | CLEANBU | Total |
| Operating revenue, vessels | 30 198 | 15 778 | 45 976 | 30 640 | 9 391 | 40 031 |
| Voyage expenses | (12 617) | (5 025) | (17 642) | (13 718) | (807) | (14 525) |
| Net revenue | 17 580 | 10 754 | 28 334 | 16 922 | 8 584 | 25 506 |
| Operating expenses, vessels | (6 049) | (6 453) | (12 502) | (5 824) | (2 669) | (8 493) |
| Group administrative services | (397) | (424) | (821) | (532) | (244) | (776) |
| Salaries and social expense | (254) | (271) | (525) | (192) | (88) | (280) |
| Tonnage tax | (44) | (24) | (68) | (32) | (16) | (48) |
| Other operating and administrative expenses | (128) | (136) | (264) | (129) | (59) | (189) |
| Operating profit before depreciation (EBITDA) | 10 708 | 3 445 | 14 154 | 10 212 | 5 508 | 15 720 |
| Ordinary depreciation | (3 241) | (3 791) | (7 032) | (2 820) | (1 538) | (4 358) |
| Operating profit after depreciation (EBIT) | 7 467 | (346) | 7 122 | 7 391 | 3 970 | 11 363 |
| Reconciliation of average revenue per onhire day (TCE earnings USD/day) | |||||||
|---|---|---|---|---|---|---|---|
| Q2 2021 | |||||||
| USD'000 | CABU | CLEANBU | Total | CABU | CLEANBU | Total | |
| Net revenues from operations of vessels | 17 508 | 10 754 | 28 334 | 16 922 | 8 584 | 25 506 | |
| IFRS 15 adjustment* | 210 | 23 | 233 | 255 | (271) | (15) | |
| Offhire compensation (note 3) | - | (482) | (482) | - | (134) | (134) | |
| Net revenue ex IFRS adjustment | 17 790 | 10 294 | 28 085 | 17 176 | 8 179 | 25 357 | |
| Onhire days | 811 | 556 | 1 368 | 807 | 264 | 1 071 | |
| Average TCE earnings per onhire day (\$/d) | 21 932 | 18 499 | 20 537 | 21 290 | 30 983 | 23 679 | |
| Q2 2021 | Q2 2020 | |||||
|---|---|---|---|---|---|---|
| USD'000 | CABU | CLEANBU | Total | CABU | CLEANBU | Total |
| Operating expenses, vessels | 6 049 | 6 453 | 12 502 | 5 824 | 2 669 | 8 493 |
| Leasing cost previously presented as opex | 88 | 59 | 146 | 81 | 27 | 108 |
| Start up cost CLEANBU vessels | - | (1 120) | (1 120) | - | (140) | (140) |
| Operating expenses, vessels adjusted | 6 137 | 5 391 | 11 528 | 5 905 | 2 556 | 8 461 |
| Operating days | 819 | 673 | 1 492 | 819 | 273 | 1 092 |
| Opex per day (\$/d) | 7 493 | 8 011 | 7 727 | 7 210 | 9 361 | 7 748 |
| 1H 2021 | 1H 2020 | |||||
|---|---|---|---|---|---|---|
| USD'000 | CABU | CLEANBU | Total | CABU | CLEANBU | Total |
| Operating revenue, vessels | 54 530 | 28 833 | 83 363 | 65 439 | 19 330 | 84 769 |
| Voyage expenses | (24 284) | (9 618) | (33 902) | (32 067) | (4 793) | (36 860) |
| Net revenue | 30 245 | 19 216 | 49 462 | 33 371 | 14 537 | 47 909 |
| Operating expenses, vessels | (12 008) | (11 621) | (23 629) | (11 562) | (5 184) | (16 746) |
| Group administrative services | (932) | (902) | (1 833) | (1 106) | (495) | (1 601) |
| Salaries and social expense | (473) | (458) | (930) | (355) | (159) | (514) |
| Tonnage tax | (67) | (42) | (108) | (39) | (17) | (57) |
| Other operating and administrative expenses | (271) | (263) | (534) | (308) | (138) | (446) |
| Operating profit before depreciation (EBITDA) | 16 494 | 5 931 | 22 426 | 20 001 | 8 543 | 28 545 |
| Ordinary depreciation | (7 122) | (6 903) | (14 025) | (5 637) | (3 075) | (8 711) |
| Operating profit after depreciation (EBIT) | 9 372 | (972) | 8 402 | 14 364 | 5 469 | 19 834 |
| 1H 2021 | 1H 2020 | |||||
|---|---|---|---|---|---|---|
| USD'000 | CABU | CLEANBU | Total | CABU | CLEANBU | Total |
| Net revenues from operations of vessels | 30 246 | 19 216 | 49 461 | 33 375 | 14 537 | 47 909 |
| IFRS 15 adjustment* | 361 | 126 | 487 | 335 | (611) | (276) |
| Offhire compensation (note 3) | - | (482) | (482) | - | - | - |
| Net revenue ex IFRS adjustment | 30 607 | 18 859 | 49 466 | 33 709 | 13 927 | 47 633 |
| Onhire days | 1 578 | 1 034 | 2 612 | 1 622 | 532 | 2 154 |
| Average TCE earnings per onhire day (\$/d) | 19 402 | 18 233 | 18 939 | 20 784 | 25 918 | 22 111 |
| 1H 2021 | 1H 2020 | |||||
|---|---|---|---|---|---|---|
| USD'000 | CABU | CLEANBU | Total | CABU | CLEANBU | Total |
| Operating expenses, vessels | 12 008 | 11 621 | 23 629 | 11 562 | 5 184 | 16 746 |
| Leasing cost previously presented as opex | 168 | 112 | 281 | 161 | 54 | 215 |
| Start up cost CLEANBU vessels | - | (2 033) | (2 033) | - | (171) | (171) |
| Operating expenses, vessels adjusted | 12 177 | 9 700 | 21 877 | 11 723 | 5 067 | 16 790 |
| Operating days | 1 629 | 1 208 | 2 837 | 1 638 | 546 | 2 184 |
| Opex per day (\$/d) | 7 475 | 8 030 | 7 712 | 7 157 | 9 280 | 7 689 |
| Operating income and operating expenses per segment | ||||||
|---|---|---|---|---|---|---|
| 2020 | ||||||
| USD'000 | CABU | CLEANBU | Total | |||
| Operating revenue, vessels | 122 208 | 40 523 | 162 730 | |||
| Voyage expenses | (60 281) | (11 311) | (71 592) | |||
| Net revenue | 61 926 | 29 212 | 91 139 | |||
| Operating expenses, vessels | (23 829) | (13 364) | (37 193) | |||
| Group administrative services | (2 251) | (1 287) | (3 538) | |||
| Salaries and social expense | (844) | (483) | (1 327) | |||
| Tonnage tax | (134) | (46) | (180) | |||
| Other operating and administrative expenses | (503) | (272) | (776) | |||
| Operating profit before depreciation (EBITDA) | 34 364 | 13 760 | 48 125 | |||
| Ordinary depreciation | (11 643) | (7 513) | (19 155) | |||
| Operating profit after depreciation (EBIT) | 22 722 | 6 248 | 28 971 |
| Reconciliation of average revenue per onhire day (TCE earnings USD/day) | |||
|---|---|---|---|
| 2020 | |||
| USD'000 | CABU | CLEANBU | Total |
| Net revenues from operations of vessels | 61 926 | 29 212 | 91 139 |
| IFRS 15 adjustment* | (234) | (512) | (746) |
| Offhire compensation (note 3) | - | (134) | (134) |
| Net revenue ex IFRS adjustment | 61 692 | 28 566 | 90 259 |
| Onhire days | 3 102 | 1 198 | 4 300 |
| Average TCE earnings per onhire day (\$/d) | 19 886 | 23 851 | 20 990 |
| 2020 | |||
|---|---|---|---|
| USD'000 | CABU | CLEANBU | Total |
| Operating expenses, vessels | 23 829 | 13 364 | 37 193 |
| Leasing cost previously presented as opex | 326 | 127 | 453 |
| Start up cost CLEANBU vessels | - | (1391) | (1 391) |
| Operating expenses, vessels adjusted | 24 156 | 12 099 | 36 255 |
| Operating days | 3 294 | 1 326 | 4 620 |
| Opex per day (\$/d) | 7 333 | 9 125 | 7 848 |
The Group has income from COA contracts (1-3 years), spot voyages and TC contracts. Set out below is the disaggregation of the Group's revenue from contracts with customers.
| Revenue types | ||||||
|---|---|---|---|---|---|---|
| USD'000 | Classification | Q2 2021 | Q2 2020 | 1H 2021 | 1H 2020 | 2020 |
| Revenue from COAs | Freight revenue | 20 527 | 23 744 | 39 939 | 54 817 | 100 659 |
| Revenue from spot voyages | Freight revenue | 16 732 | 8 762 | 28 939 | 21 666 | 41 631 |
| Revenue from TC contracts | Charter hire revenue | 8 235 | 7 391 | 14 002 | 8 152 | 20 308 |
| Other revenue* | Other revenue | 482 | 134 | 482 | 134 | 134 |
| Total revenue, vessels | 45 975 | 40 031 | 83 363 | 84 769 | 162 732 |
* The Group received loss of hire insurance of USD 0.5 million in Q2 2021 (other revenue) related to yard guarantee work on the CLEANBU vessel MV Barramundi. The vessel was offhire in total 53 days (of which 45 days in Q2).
| Vessels | |||||
|---|---|---|---|---|---|
| USD '000 | 30 Jun 2021 | 31 Dec 2020 | |||
| Cost price 1.1 | 599 826 | 492 075 | |||
| Delivery of newbuildings | 153 763 | 103 708 | |||
| Adjustments acquisition value newbuildings delivered | 1 076 | (809) | |||
| Dry Docking | 3 247 | 4 852 | |||
| Technical upgrade | 2 426 | - | |||
| Costprice end of period | 760 338 | 599 826 | |||
| Acc. Depreciation 1.1 | 195 568 | 176 866 | |||
| Depreciation for the period | 13 745 | 18 702 | |||
| Acc. Depreciation end of period | 209 313 | 195 568 | |||
| Carrying amounts end of period* | 551 025 | 404 258 | |||
| *carrying value of vessels includes dry-docking | |||||
| No. of vessels | 17 | 14 | |||
| Useful life | 25 | 25 | |||
| Depreciation schedule | Straight-line | Straight-line | |||
| Reconciliation of depreciations | |||||
| USD'000 | Q2 2021 | Q2 2020 | 1H 2021 | 1H 2020 | 2020 |
| Depreciation vessels | 6 885 | 4 250 | 13 745 | 8 496 | 18 702 |
| Depreciation right of use assets | 146 | 108 | 281 | 215 | 453 |
| Depreciations for the period | 7 032 | 4 358 | 14 026 | 8 711 | 19 155 |
The CLEANBU vessel MV Balzani was delivered from Jiangsu New Yangzi Shipbuilding Co. Ltd 25 May 2021. Additions for scheduled dry-docking amounts USD 3.2 million and is related to dry– docking of the CABU vessels MV Banasol and MV Barcarena. Technical upgrade of 2.4 million is related to general improvement of the technical performance of the vessels and reduction of the environmental footprint.
Identification of impairment indicators is based on an asessment of development in market rates (dry bulk, MR tanker, LR1 tanker and fuel), TCE earnings for the fleet, vessel Opex, operating profit, technological development, change in regulations, interest rates and discount rate. The Group has experienced higher Opex and offhire days caused by Covid- 19. However, expected future TCE earnings for both fleets of CABU's and CLEANBU's and diversified market exposure support the conclusion of no impairment indicators identified as per 30 June 2021.
The Group took delivery of the eighth CLEANBU vessel, MV Balzani, on 25 May 2021, which completed the newbuilding programme at Jiangsu New Yangzi Shipbuilding Co., Ltd in China.
| USD '000 | 30 Jun 2021 | 31 Dec 2020 |
|---|---|---|
| Cost 1.1 | 48 441 | 62 316 |
| Borrowing cost | 84 | 1 023 |
| Yard installments paid | 97 650 | 80 851 |
| Other capitalized cost | 7 588 | 7 960 |
| Delivery of newbuilings | (153 763) | (103 708) |
| Net carrying amount | - | 48 441 |
The below tables present the Group's financing arrangements as per 30 June 2021.
In connection with the delivery of MV Balzani in Q2 2021, the Group made a total of USD 30 million in drawndowns under the Nordea/Credit Agricole Sustainability Linked Term loan and revolving credit facilities. In addition the Group made a drawndown of USD 4 million under the SEB/SR-Bank/SPV Facility revolving credit facility.
| Description | Interest rate | Maturity | Carrying amount |
|---|---|---|---|
| Term loan, USD 100 mill | LIBOR + 2.3 % | March 2022 | 71 863 |
| Term loan, USD 105 mill | LIBOR + 2.3 % | December 2023 | 89 528 |
| Term loan/RCF, 90.75 mill | LIBOR + 2.3 % | October 2025 | 87 672 |
| Term Loan/RCF, 60 mill | LIBOR + 2.75 % | March 2025 | 59 118 |
| (1 999) | |||
| 306 181 | |||
* Potential margin adjustments up to +/- 10 bps once every year based on sustainability KPIs.
The Group has available revolving credit facility capacity of USD 0.8 million related to the SEB/SR-Bank/SPV Facility and USD 12.5 million available capacity under 364-days overdraft facility.
| Bond loan | Face value NOK'000 |
Maturity | Carrying amount 30 Jun 2021 USD'000 |
|---|---|---|---|
| KCC04 | 700 000 | 11.02.2025 | 80 649 |
| Exchange rate adjustment | 1 303 | ||
| Capitalized expenses | (906) | ||
| Bond discount | (272) | ||
| Total bond loan | 700 000 | 80 774 |
| USD '000 | Fair value | Carrying amount | Carrying amount |
|---|---|---|---|
| Interest bearing liabilities | 30 Jun 2021 | 30 Jun 2021 | 31 Dec 2020 |
| Mortgage debt | 220 668 | 220 668 | 208 052 |
| Capitalized loan fees | - | (1 999) | (1 239 |
| Bond loan | 78 059 | 81 952 | 81 991 |
| Bond discount | - | (272) | (310) |
| Capitalized expenses bond loan | - | (906) | (1 032) |
| Total non-current interest bearing liabilties | 298 727 | 299 443 | 287 462 |
| Mortgage debt, current | 87 512 | 87 512 | 22 473 |
| Overdraft facility (Secured) | 7 493 | 7 493 | - |
| Total interest bearing liabilities | 393 732 | 394 448 | 309 935 |
The table below summarises the maturity profile of the Group's financial liabilities based on contractual undiscounted payments. Interest bearing debt and unsecured debt include interest payments and interest hedge.
| USD '000 | |||||
|---|---|---|---|---|---|
| Maturity profile financial liabilities at 30 Jun 2021 | < 1 year | 1-3 years | 3-5 years | > 5 years | Total |
| Mortgage debt (incl interests) | 96 203 | 112 443 | 127 522 | - | 336 168 |
| Bond loan (incl interest) | 4 757 | 9 515 | 79 488 | - | 93 760 |
| Total | 100 960 | 121 958 | 207 010 | - | 429 928 |
Loan facilities to be refinanced during the next 12 months are included in <1 year. The Nordea/Danske Facility matures in March 2022 and is included in the <1 year numbers. Refinancing has been initated and is estimated to be finalized in 2021.
As per 30 June 2021, the Group is in compliance with all financial covenants. On Group level financial covenants relate to minimum equity (USD 125 million), equity ratio (30%), and cash (USD 15 million). Financial covenants on KCC Shipowning AS level relate to minimum cash (the higher of USD 10 million and 5 % of net interest-bearing debt) and net interest-bearing debt to EBITDA (NIBD/EBITDA) of max 7x. The NIBD/EBITDA ratio can be higher than 7x for one reporting period (measured semi-annually) provided that the NIBD/EBITDA was below 7x in the prior reporting period. In addition, all secured loans contain minimum value clauses related to the value of the vessel compared to outstanding loan anda change of control clause. In case of KCC Shipowning AS a change of control event occurs if it ceases to be owned, directly or indirectly, 100% (in issued shares and voting rights) by KCC and in case of KCC, if it ceases to be owned, directly or indirectly, 33.1/3% (in issued shares and voting rights) by Trond Harald Klaveness and/or his direct lineal descendants or if any other person or group of persons acting in concert, other than TrondHarald Klaveness and/ or his direct lineal descendants, directly or indirectly, gain control of 33.1/3% or more of the shares and/or voting rights in KCC.
| Financial assets | ||
|---|---|---|
| USD '000 | 30 Jun 2021 | 31 Dec 2020 |
| Financial instruments at fair value through OCI | ||
| Interest rate swaps | 1 154 | 356 |
| Cross-currency interest rate swap | 4 213 | 2 917 |
| Fuel Hedge | 25 | 87 |
| Financial instruments at fair value through P&L | ||
| Interest rate swaps | 109 | 154 |
| Financial assets | 5 501 | 3 515 |
| Current | 25 | 87 |
| Non-current | 5 476 | 3 427 |
| Financial liabilities | ||
| USD '000 | 30 Jun 2021 | 31 Dec 2020 |
| Financial instruments at fair value through OCI | ||
| Cross-currency interest rate swap (CCIRS) | 3 667 | 5 409 |
| Forward freight agreements | 757 | |
| Financial instruments at fair value through P&L | ||
| Interest rate swaps | - | - |
| FX Swaps | - | - |
| Financial liabilities | 3 667 | 6 166 |
| Current | - | 757 |
| Non-current | 3 667 | 5 409 |
The strengthening dry bulk paper market (FFA) has created temporary negative balance sheet and cash effects due to negative mark– to– market (MtM) on FFA hedges and large cash outflows to clearing following a substantially stronger FFA pricing for balance 2021 and 2022. As per 30 June 2021, all FFA liabilities of USD 18.6 million has been paid to the clearing house.
| Finance income | 146 | 183 | 254 | 307 | 529 |
|---|---|---|---|---|---|
| Gain on foreign exchange | - | 132 | 31 | - | 131 |
| Fair value changes interest rate swaps | 9 | - | - | - | - |
| Other interest income | 137 | 51 | 223 | 307 | 398 |
| Finance income | Q2 2021 | Q2 2020 | 1H 2021 | 1H 2020 | 2020 |
| USD '000 |
| USD '000 | |||||
|---|---|---|---|---|---|
| Finance cost | Q2 2021 | Q2 2020 | 1H 2021 | 1H 2020 | 2020 |
| Interest expenses mortgage debt | 2 409 | 1 990 | 4 442 | 4 130 | 7 729 |
| Interest expenses bond loan | 1 123 | 976 | 2 223 | 1 800 | 4 062 |
| Interest expenses lease liabilities | 27 | 23 | 52 | 46 | 94 |
| Amortization capitalized fees on loans | 211 | 131 | 402 | 346 | 693 |
| Other financial expenses | 20 | 42 | 80 | 707 | 906 |
| Fair value changes in FFA | - | 21 | - | 21 | 21 |
| Fair value changes interest rate swaps | - | 3 | 44 | 296 | 687 |
| Loss on foreign exchange | 21 | - | - | 123 | 126 |
| Finance cost | 3 811 | 3 186 | 7 243 | 7 468 | 14 317 |
Dividends of USD 1.4 million were paid to the shareholders in June 2021 (USD 0.03 per share).
| USD'000 | Q2 2021 | Q2 2020 | 1H 2021 | 1H 2020 | 2020 |
|---|---|---|---|---|---|
| G&A fee to Klaveness AS | 285 | 404 | 682 | 846 | 1 614 |
| Commercial management fee to Klaveness AS | 190 | 372 | 443 | 755 | 1 744 |
| Project management and G&A fee to Klaveness Ship Management AS | 331 | - | 692 | - | 180 |
| G&A fee to Klaveness Asia Pte.Ltd | 16 | - | 16 | - | - |
| Group commercial and administrative services | 821 | 776 | 1 833 | 1 601 | 3 538 |
| USD'000 | Q2 2021 | Q2 2020 | 1H 2021 | 1H 2020 | 2020 |
| Technical management fee to KSM* (reported as part of Opex) | 1 031 | 773 | 1 996 | 1 530 | 3 163 |
| Crewing agency fee to KSM* (reported as part of Opex) | 373 | 271 | 713 | 535 | 1 101 |
| Supervision fee to Klaveness AS (capitalised on newbuildings) | 782 | 442 | 1 228 | 837 | 1 778 |
| Total other transactions with related parties | 2 186 | 1 485 | 3 937 | 2 902 | 6 042 |
* KSM refers to Klaveness Ship Management AS
As of 1 June 2021, employment of four key employees in Singapore were transferred from Klaveness Asia Pte. Ltd to the new established company, Klaveness Combination Carriers Asia Pte Ltd, 100 % owned by Klaveness Combination Carriers ASA (Parent Company). The Group holds 10 employees as per end June 2021. Prior to the employment, the Group purchased commercial services from their work through Klaveness AS.
On 24 August 2021, the Company's Board of Directors declared to pay a cash dividend to the Company's shareholders of USD 2.16 million for Q2 (USD 0.045 per share).
There are no other events after the balance sheet date that have material effect on the financial statement as of 30 June 2021.
11 Reconciliation of alternative performance measures
Non-GAAP financial alternative performance measures (APM) that are used are consistent with those used in the previous quarterly reports. Description and definitions of such measures can be found on the Company's homepage: https://www.combinationcarriers.com/alternativeperformance-measures
| EBITDA adjusted | 15 274 | 15 860 | 24 460 | 28 717 | 49 517 |
|---|---|---|---|---|---|
| Start up costs CLEANBU vessels | 1 120 | 140 | 2 033 | 171 | 1 391 |
| EBITDA | 14 145 | 15 720 | 22 426 | 28 545 | 48 125 |
| Reconciliation of EBITDA adjusted USD'000 |
Q2 2021 | Q2 2020 | 1H 2021 | 1H 2020 | 2020 |
| Reconciliation EBIT adjusted | |||||
|---|---|---|---|---|---|
| USD'000 | Q2 2021 | Q2 2020 | 1H 2021 | 1H 2020 | 2020 |
| EBIT | 7 122 | 11 362 | 8 401 | 19 834 | 28 971 |
| Start up costs CLEANBU vessels | 1 120 | 140 | 2 033 | 171 | 1 391 |
| EBIT adjusted | 8 242 | 11 502 | 10 434 | 20 005 | 30 362 |
| Reconciliation of average revenue per onhire day (TCE earnings) | |||||
| USD'000 | Q2 2021 | Q2 2020 | 1H 2021 | 1H 2020 | 2020 |
| Net revenues from operations of vessels | 28 334 | 25 506 | 49 462 | 47 909 | 91 139 |
| Offhire compensation | (482) | (134) | (482) | - | (134) |
| IFRS 15 adjustment* | 233 | (15) | 487 | (276) | (746) |
| Net revenue ex IFRS adjustment | 28 085 | 25 357 | 49 466 | 47 499 | 90 259 |
| Onhire days | 1 368 | 1 071 | 2 612 | 2 154 | 4 300 |
| Average revenue per onhire days (\$/d) (TCE earnings) | 20 537 | 23 679 | 18 939 | 22 111 | 20 990 |
| Reconciliation of opex per day | |||||
| USD'000 | Q2 2021 | Q2 2020 | 1H 2021 | 1H 2020 | 2020 |
| Operating expenses, vessels | 12 502 | 8 493 | 23 629 | 16 746 | 37 193 |
| Leasing cost previously presented as opex | 146 | 108 | 281 | 215 | 453 |
| Start up costs CLEANBU vessels | (1 120) | (140) | (2 033) | (171) | (1 391) |
| Operating expenses, vessels adjusted | 11 528 | 8 461 | 21 877 | 16 790 | 36 255 |
| Operating days | 1 492 | 1 092 | 2 837 | 2 184 | 4 620 |
| Opex per day (\$/d) | 7 727 | 7 748 | 7 712 | 7 689 | 7 848 |
| Reconciliation of total assets to capital employed and return on capital employed (ROCE) calculation. |
|||||
| USD'000 | Q2 2021 | Q2 2020 | 1H 2021 | 1H 2020 | 2020 |
| Total assets | 617 876 | 485 814 | 617 876 | 485 814 | 549 043 |
| Total liabilities | 416 769 | 269 867 | 416 769 | 269 867 | 332 510 |
| Total equity | 201 107 | 215 946 | 201 107 | 215 946 | 216 532 |
| Total interest-bearing debt | 394 448 | 243 611 | 394 448 | 243 611 | 309 934 |
| Capital employed | 595 555 | 459 557 | 595 555 | 459 557 | 526 466 |
| EBIT adjusted annualised | 32 968 | 46 008 | 20 868 | 40 011 | 30 362 |
| ROCE adjusted | 6 % | 10 % | 4 % | 9 % | 6 % |
| Reconciliation of equity ratio | |||||
| USD'000 | Q2 2021 | Q2 2020 | 1H 2021 | 1H 2020 | 2020 |
| Total assets | 617 876 | 485 814 | 617 876 | 485 814 | 549 043 |
| Total equity | 201 107 | 215 946 | 201 107 | 215 946 | 216 532 |
| Equity ratio | 33 % | 44 % | 33 % | 44 % | 39 % |
| Reconciliation of total interest-bearing debt | |||||
| USD'000 | Q2 2021 | Q2 2020 | 1H 2021 | 1H 2020 | 2020 |
| Mortgage debt | 218 669 | 160 738 | 218 669 | 160 738 | 206 813 |
| Long-term bond loan | 80 774 | 50 877 | 80 774 | 50 877 | 80 649 |
| Short-term mortgage debt | 87 512 | 17 367 | 87 512 | 17 367 | 22 473 |
| Other interest bearing liabilities | 7 493 | 8 | 7 493 | 8 | - |
| Short-term bond loan | - | 14 621 | - | 14 621 | - |
| Total interest-bearing debt | 394 448 | 243 611 | 394 448 | 243 611 | 309 934 |
* IFRS 15 adjustment: Revenue recognized from load-to-discharge and not from discharge-to-discharge, resulting in higher volatility in revenues from month to month.
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