Annual Report • Feb 19, 2021
Annual Report
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"KCC substantially outperformed the standard tanker market in Q4, delivering TCE earnings 2-3 times the market. Q4 ended a strong 2020 for KCC's unique solutions, demonstrating the value of flexibility and diversification while delivering market leading environmental performance."
Engebret Dahm, CEO Klaveness Combination Carriers ASA
| (USD '000) | Q4 2020 | Q3 2020 | Q4 2019 | 2020 | 2019 |
|---|---|---|---|---|---|
| Net revenues from vessel operations | 22 871 | 20 358 | 18 826 | 91 139 | 61 327 |
| EBITDA (note 11) | 10 323 | 9 257 | 9 038 | 48 125 | 25 763 |
| EBITDA adjusted (note 11) | 10 953 | 9 847 | 9 193 | 49 517 | 27 487 |
| Profit/(loss) for the period | 1 212 | 1 311 | 1 734 | 15 192 | 597 |
| Earnings per share1 | 0.02 | 0.03 | 0.04 | 0.32 | 0.01 |
| Total assets | 549 401 | 502 166 | 459 262 | 549 401 | 459 262 |
| Equity | 216 542 | 216 116 | 212 941 | 216 542 | 212 941 |
| Equity ratio | 39 % | 43 % | 46 % | 39 % | 46 % |
| ROCE adjusted (note 11) | 4 % | 4 % | 4 % | 6 % | 3 % |
| Q4 2020 | Q3 2020 | Q4 2019 | 2020 | 2019 | |
| Average TCE earnings (note 11) | 19 597 \$/d | 20 310 \$/d | 18 941 \$/d | 20 990 \$/d | 17 060 \$/d |
| Opex per day (note 11) | 7 991 \$/d | 7 990 \$/d | 7 940 \$/d | 7 848 \$/d | 7 421 \$/d |
| Onhire days | 1 162 | 984 | 1 037 | 4 300 | 3 636 |
| Off-hire days, scheduled | 33 | 72 | 50 | 119 | 141 |
| Off-hire days, unscheduled | 39 | 49 | 17 | 110 | 85 |
| % of days in main combination trades2 | 77 % | 78 % | 75 % | 77 % | 73 % |
| Utilisation3 | 90 % | 87 % | 91 % | 91 % | 91 % |
Adjusted EBITDA for the period ended at USD 11.0 million up from USD 9.2 million in Q4 2019 and USD 9.8 million last quarter.Both the tanker and dry bulk market weakened during the quarter while fuel prices strengthened, the net effect on TCE earnings being in total slightly negative compared to third quarter. The fleet continued to grow with delivery of the fifth CLEANBU vessel in Q4. Vessel on-hire days were up equivalent to approx. 0.5 and 0.35 vessel years relative to Q3 2020 and Q4 2019, respectively. Operating expenses increased in Q4 mainly due to a higher number of vessels. Net profit after tax for Q4 ended at USD 1.2 million compared to USD 1.3 million in Q3 and USD 1.7 million in Q4 2019.
Net revenue from vessel operations increased by 49% from USD 61.3 million in 2019 to USD 91.1 million in 2020, while adjusted EBITDA ended at USD 49.5 million, an increase of 80%. The main reasons are a 1.8 vessel years larger on-hire fleet and stronger TCE earnings driven by a stronger tanker market in first half and higher caustic soda volumes, the latter improving combination trading for the CABU vessels. On the other hand, costs and off-hire increased due to COVID-19 and total COVID-19 effect is estimated to be USD 5.8 million in lower earnings due to off-hire as well as delayed start of trading for the newbuilds and higher than normal costs, each approx. 50 % of total negative impact. Net profit for the year ended at USD 15.2 million compared to USD 0.6 million in 2019.
1 Earnings per share from operations. Based on average outstanding shares for the different periods.
2 % of days in main combination trades = number of days in combi trade from Far East/Middle East to Australia, US Gulf to Brazil and Middle East/India to South America as a percentage of total onhire days.
| (USD/day) / # of days | Q4 2020 | Q3 2020 | Q4 2019 | 2020 | 2019 |
|---|---|---|---|---|---|
| Average TCE earnings (note 2) | 18 958 \$/d | 18 840 \$/d | 19 002 \$/d | 19 886 \$/d | 16 877 \$/d |
| Opex per day (note 2) | 7 162 \$/d | 7 853 \$/d | 6 975 \$/d | 7 333 \$/d | 6 800 \$/d |
| Onhire days | 767 | 713 | 819 | 3 102 | 3 171 |
| Off-hire days, scheduled | 33 | 72 | 4 | 115 | 96 |
| Off-hire days, unscheduled | 27 | 43 | 5 | 77 | 18 |
| % of days in main combination trades1 | 83 % | 89 % | 80 % | 87 % | 74 % |
| Ballast days in % of total on-hire days | 13 % | 13 % | 11 % | 13 % | 11 % |
| Utilisation2 | 90 % | 83 % | 96 % | 90 % | 94 % |
Average TCE earnings per on-hire day for the CABU vessels ended at \$18,958/day, quite in line with both Q3 (\$18,840/day) and Q4 2019 (\$19,002/ day). This is 2.9 times higher than the spot market for standard MR tankers3 , driven by 100% efficient combination trading in the Pacific basin where approx. 70% of the fleet was employed in Q4.
Off-hire was down in total 55 days compared to Q3 due to less scheduled drydocking and less COVID-19 related off-hire (deviations for crew changes, quarantine etc), the latter down from 35 days in Q3 to 19 days in Q4. Operating costs were down approx. \$690/day compared to Q3 and up approx. \$190/day compared to Q4 2019.
Average TCE earnings per on-hire day increased by approx. \$3,000/day from 2019 to 2020 and ended at \$19,886/day, a multiple of 1.3 to standard spot earnings for MR tankers. The main drivers are increased caustic soda volumes both in the Pacific and the Atlantic and hence a higher degree of efficient combination trading, in addition to stronger underlying markets in total. The % of days in main combination trades increased from 74% in 2019 to 87% in 2020.
However, the pandemic impacted costs and off-hire negatively in 2020. Opex per day ended at \$7,333/day, an increase of approx. \$530/day from 2019, partly due to COVID-19 (crew costs, deviations, forwarding cost for spare parts and supplies etc). Unscheduled off-hire ended at 77 days, whereof 55 days were COVID-19 related, compared to 19 unscheduled off-hire days in 2019. Three vessels have been through regular dry-docking in 2020 and scheduled off-hire increased by 19 days compared to 2019. In sum, 2020 turned out to be a strong year for the CABU vessels with the highest TCE earnings since 2015 and very efficient combination trading.
| (USD/day) / # of days | Q4 2020 | Q3 2020 | Q4 2019 | 2020 | 2019 |
|---|---|---|---|---|---|
| Average TCE earnings (note 2) | 20 840 \$/d | 24 182 \$/d | 18 715 \$/d | 23 851 \$/d | 18 300 \$/d |
| Opex per day (note 2) | 9 527 \$/d | 8 330 \$/d | 10 836 \$/d | 9 125 \$/d | 10 751 \$/d |
| Onhire days | 395 | 271 | 218 | 1 198 | 465 |
| Off-hire days, scheduled | - | - | 45 | - | 45 |
| Off-hire days, unscheduled | 12 | 6 | 13 | 31 | 69 |
| % of days in main combination trades1 | 67 % | 48 % | 58 % | 50 % | 61 % |
| Ballast days in % of total on-hire days | 19 % | 15 % | 13 % | 20 % | 21 % |
| Utilisation2 | 93 % | 97 % | 77 % | 95 % | 78 % |
The CLEANBU fleet outperformed the LR1 tanker vessel spot earnings by a multiple of 1.93 . Average CLEANBU TCE earnings per on-hire day ended at \$20,840/day, down by approx. \$3,340/day from last quarter and up approx. \$2,125/day compared to Q4 2019. The fleet had in total approx. 0.35 more vessel years on-hire compared to last quarter as two vessels were delivered in Q3 and Q4. One vessel continued performing under a tanker time charter secured in the strong tanker market in April 2020, while the remaining 3.3 vessels traded mainly in combination trades with CPP, caustic soda and dry bulk in the Pacific. An important milestone was reached in October 2020 with the successful completion of the first CPP voyage to Australia with previous cargo dry bulk, representing a breakthrough in one of the most important target markets for the CLEANBUs. An additional two CPP cargoes to Australia were successfully performed in December 2020 and to date in 2021.
Unscheduled off-hire increased by 6 days to 12 days, whereof 8 days related to COVID-19 (1 day in Q3). Average operating costs for the CLEANBU vessels ended at \$9,527/day, approx. \$1,200/day higher than last quarter, partly due to COVID-19 related costs, and \$1,300/day lower than in Q4 2019 mainly due to costs related to the guarantee docking of MV Baru recognised in Q4 2019.
Average TCE earnings ended at \$23,851/day for the year, approximately \$5,550/day higher compared to 2019. The increase is partly due to the fixing of three vessels on tanker time charters at the market peak in Q2 2020, two for three months each and one vessel for nine months. The commercial phase-in of the vessels has shown good progress with expansion of combi-trading patterns as well as successful performance at new terminals for new customers. The earnings multiple to LR1 tankers was 1.1 as the LR1 tanker spot rates were at historic strong levels for part of 2020.
The COVID-19 situation has made delivery of newbuilds in China more challenging and costly. It has not been possible to get KCC's crew into China during most of 2020, hence Chinese crew have been employed to sail the two delivered newbuilds to South Korea for crew change. The time from delivery until start of trading has hence increased by an average of 38 days compared to the vessels delivered in 2019. The result was increased costs and less on-hire days. Other costs have increased as well as a result of COVID-19.
Based on solid earnings, the CLEANBU segment EBITDA ended at USD 13.8 million compared to a negative EBITDA of USD 1.5 million in 2019.
1 % of days in main combination trades = number of days in combination trade from Far East/Middle East to Australia, US Gulf to Brazil and Middle East/India to South America as a percentage of total on-hire days.
Mortgage debt increased by USD 60.5 million in Q4 2020 due to delivery and financing of CLEANBU vessels delivered in Q3 and Q4. The call option to redeem the remaining outstanding amount of NOK 142 million under the KCC03 bonds was exercised in Q3 and settled in Q4 2020. The shortterm overdraft facility of USD 10 million was extended for one year and raised to USD 20 million in January 2021. KCC's capital commitments are fully funded, and the refinancing risk is limited over the next year as the first debt facility falls due in March 2022.
The equity ratio ended at 39% per year-end down from 43% per end of third quarter as a result of delivery of two vessels and hence higher bank debt. Cash and cash equivalents ended at USD 65.7 million, up from USD 57.7 million at end of third quarter mainly driven by a positive cash flow from operating activities (USD 9.4 million) as the net effect of cash flow from investment activities (negative USD 35.9 million, mainly yard instalments related to newbuilds) and financing activities (USD 34.3 million, mainly increased bank debt net of repaid bond debt) was limited to negative USD 1 million.
The fifth CLEANBU vessel MV Bangus was delivered on 13 October 2020 and the vessel started trading at the end of November. The fleet as of yearend 2020 consisted of nine CABU and five CLEANBU combination carriers, with another three CLEANBU vessels on order. One of these three vessels was delivered in January 2021 and the last two are estimated to be delivered in March and May 2021 respectively. The two last individual fixed price options expired in January 2021.
KCC is experiencing several operational challenges related to COVID-19 and the situation is again escalating. Countries have implemented/are implementing even stricter procedures as a result of the mutant virus variations discovered over the last months. It is difficult to make crew changes and get ship managers, service personnel and vetting inspectors on board the vessels, and to take delivery of newbuilds. Other issues that drive costs are composition of crew, stand-by pay for crew and forwarding costs to mention some. The fleet had in total 27 days COVID-19 related off-hire in Q4 2020 and the total negative COVID-19 impact is estimated to be around USD 2.7 million in costs and lower earnings for the quarter.
Yard guarantee work related to the three first CLEANBU vessels is targeted to be rectified in the period March-October 2021. Total off-hire is estimated to be in total 180-225 days. The yard guarantee items are not linked to the combination carrier concept or trading capabilities of the vessels and are not expected to materially impact the vessels performance until being rectified.
One CABU vessel has been through periodic dry docking with in total 33 days off-hire in Q4 2020.
Earnings of KCC's combination carriers are driven by the Panamax dry bulk market, MR and LR1 product tanker markets and fuel markets. Fourth quarter 2020 started on a strong note for dry bulk rates, with the Capesize index peaking at \$34.900/day early October on the back of strong Chinese iron ore demand. Despite continued strong dry bulk shipping volumes, rates fell back to almost \$10.000/day in mid-December. This was to some degree driven by the Chinese "ban" on Australian coal. The last weeks of 2020 (and to date in 2021) offered strong gains on the daily earnings with Brazil iron ore volumes at an all-time high in December. Panamaxes average earnings were \$12.000/day in fourth quarter 2020, the weakest fourth quarter average since 2016. This was in large part due to a 6.8% year-on-year (YoY) decline in coal volumes as Australia/China cargoes dried up. However, rates found some support in very large grain volumes from the US to China towards the end of the year.
On the supply side, Clarksons reported a YoY growth of 5.6% in the Panamax fleet in Q4 2020 (total bulk fleet 4.3%). The Panamax orderbook currently stands at 5.7% of the current fleet, the lowest level since 2002, a very positive factor for the market going forward.
Global demand for dry bulk vessels is expected to be firm going forward on the back of strong iron ore exports driven by healthy margins for producers and a continued recovery in coal volumes based on a rising post COVID-19 energy demand. On the grain side, one expects continued strong US exports and a very good (although delayed) harvest in Brazil and another year of growth in Brazilian grain exports. Minor bulk is also expected to improve on the back of COVID-19 recovery.
While the product tanker market on overall continued to weaken in the fourth quarter 2020, the LR1 route from Middle East to Japan (TC5) improved compared to the third quarter, but still ended at a weak level of \$9,100/day. Product tanker rates are negatively impacted by continued muted oil consumption, high inventories and general low refinery runs on the back of the supply/demand disruptions caused mainly by the COVID -19 pandemic. Expectation of oil demand gradually resuming pre-COVID-19 levels coupled with low fleet growth are likely to spur an improvement in rates during 2021 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.
US caustic soda demand has been good and steady during the fourth quarter and early 2021, while spot exports from the US Gulf have been low over the past few weeks. Suppliers in the Far East run at high operating rates due to a bullish downstream PVC market leading to caustic soda oversupply in the respective domestic markets and pressure to export. While still uncertain, outlook for exports from Far East to Australia looks positive for 2021.
Brent crude oil prices ended at around USD 52 per barrel at year-end, up 25% quarter-on-quarter. Average fuel oil price (VLSFO) Q4 2020 increased by around 8% quarter-on-quarter.
Very-low sulphur fuel oil (VLSFO)1
NE Asia export1
Safety is KCC's priority number one and to the Board's satisfaction there were no major or medium incidents and no navigational incidents or spills to the environment in Q4 2020. Klaveness Ship Management's continuous focus on safety and the launch of "KLASS" (Klaveness Always Safe and Secure) safety culture program throughout KCC's fleet in Q3 and Q4 2020, have delivered positive results with no major or medium personal injuries on KCC's fleet since March 2020.
| HEALTH & SAFETY KPI'S | Q4 2020 | Q3 2020 | Q4 2019 | 2020 | 2019 |
|---|---|---|---|---|---|
| # of medium* injuries | - | - | - | 3 | 5 |
| # of major** injuries | - | - | - | - | - |
| # of navigational incidents | - | - | - | 1 | 3 |
| # of spills to the environment | - | - | - | 1 | - |
* Medium = Medical treatment and repatriation, will return to work
**Major = Severe injury or death
The revised 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 in Q4. Special focus has been 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. The number of crew changes has continued to increase in Q4 2020, and nine out of 10 scheduled crew changes were performed as planned during the quarter up from five to six of 10 during Q2 2020. KCC has regretfully still crew members having stayed onboard longer than their service period, and KCC's ship manager, Klaveness Ship Management (KSM), has high priority on securing safe repatriation of these crew members.
KCC's combination carriers provide the most carbon efficient and environmentally friendly deep-sea transportation solution available today. Our vessels effectively combine wet and dry cargo, minimizing ballast to 10-15% of the total time, whilst regular tankers and dry bulk vessels typically ballast 30-45% of the time in the same trading patterns. This gives up to 40% reduction in CO2 emissions for the same transport work, when performed by KCC's combination carriers.
CO2 emissions per ton transported cargo per nautical mile (EEOI) ended at 7.5 for fourth quarter and 7.6 for 2020 in total, down from 7.9 in 2019. The EEOI for 2020 is negatively impacted by the time charter of three vessels trading as standard tankers and phase-in and not yet fully optimal trading of the CLEANBU vessels. The efficient combination trading for the CABU vessels has, however, contributed positively.
Both the EEOI and the average CO2 emission per vessel are above the set targets for 2022. A number of initiatives both onboard the vessels and with respect to the operation of the vessels have been launched in 2020 and to date in 2021 which are expected to show positive effects during 2021.This includes amongst others testing out of different types of silicone-based hull coatings, propeller ultrasound devices and semiautonomous hull cleaning robots to reduce marine growth and lower fuel consumption. The planning speed of the vessels have been reduced and a new weather routing system will soon be tested with the target to further reduce fuel consumption and CO2 emissions. In addition, the redelivery of the last vessel on time charter and further optimization of the CLEANBU combi-trading patterns will likely result in reduced ballast-days and contribute to a further reduction in EEOI going forward.
1 EEOI (Energy Efficiency Operational Index) is defined by IMO and represents CO2 emitted per transported cargo per nautical mile for a period of time (both fuel consumption at sea and in port included). In theory, this index will show the good energy efficiency for the combination carriers as the combination carriers have substantially lower ballast than standard vessels. As the fleet is relatively small, the reported EEOI is sensitive to temporary trade disruptions with trading the vessels as standard vessels with "normal ballast" as well as one or two longer ballast voyages e.g. when positioning CABU vessels to/from trading in Americas. These variations are evident when we look at the historical numbers, but will most likely be more stable when we have a larger fleet. Prior to 2020, end date of a voyage is decisive for which period EEOI for a voyage is included. From 2020 and onwards, reporting system provider was changed so that we are able to calculate EEOI on a per day basis, allocated to the corresponding quarter.
2 Benchmark: The EEOI and % ballast for "Benchmark standard vessels" are calculated based on standard vessels (panamax/kamsarmax dry, 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 AXSmarine.
3 CO2 emissions – average per vessels = total emissions/vessel years. Vessel years = days available – offhire days at yard. Quarterly figures are annualized. When new vessels are delivered to the fleet, the vessel years are calculated from the date the vessel is delivered. Prior to 2020, end date for a voyage was decisive for which period emission was included. From 2020 and onwards, reporting system provider was changed so that we are able to calculate emissions on a per day basis, allocated to the corresponding quarter.
4 % of days in main combination trades = number of days in combi trade from Far East/Middle East to Australia, US Gulf to Brazil and Middle East/India to South America as a percentage of total onhire days.
The earnings for first quarter 2021 are negatively impacted by the historic weak tanker market in January and to date in February. Both the dry bulk market and fuel prices have, however, strengthened considerably during the same period offsetting negative effects from the tanker market. The outlook for the dry bulk market is strong with demand growth likely to exceed fleet growth in 2021, while the conditions in the tanker market will likely remain challenging for some time. Once the full recovery from the COVID-19 pandemic materializes, however, the supply-demand balance in the tanker markets is promising with a historic low orderbook and possible positive "catch up" demand effects. The CABU fleet will continue to benefit from high tanker contract coverage, while the CLEANBU fleet is more exposed. TCE earnings for both vessel segments are expected to to continue to be considerably higher than the earnings for standard tankers and dry bulk vessels during first quarter.
The sixth CLEANBU vessel was delivered 11 January 2021 and the last two CLEANBU vessels are scheduled to be delivered in March and May. We expect that travel restrictions and extended quarantine regulations in China will add costs and delay start of trading of the last two newbuilds. While the implemented COVID-19 management plan works well, operating costs and off-hire will likely continue to be higher than normal over the coming quarters.
KCC's business model with a diversified market exposure to three markets (dry bulk, tanker and fuel) proves its value in the current extreme market conditions with a historic poor tanker market, but a strong dry bulk market and high fuel prices. Together with KCC's high contract coverage this even out KCC's earnings and makes KCC significantly more resilient than traditional shipping companies. With much increased focus on cutting carbon emissions throughout the shipping industry, KCC's competitive advantage in low carbon shipping, providing the most cost-efficient way of decarbonizing seaborne supply chains, is expected to increase going forward.
Oslo, 18 February 2021
The Board of Directors of
Klaveness Combination Carriers ASA
Lasse Kristoffersen Chairman of the Board
Magne Øvreås Board member
Lori Wheeler Næss Board member
Rebekka Glasser Herlofsen Board member
Morten Skedsmo Board member
Engebret Dahm
CEO
| Quarter ended | Year ended | ||||
|---|---|---|---|---|---|
| Unaudited | Unaudited | Unaudited | Audited | ||
| USD'000 | Notes | 31 Dec 2020 | 31 Dec 2019 | 31 Dec 2020 | 31 Dec 2019 |
| Freight revenue | 3 | 36 444 | 39 158 | 142 289 | 130 768 |
| Charter hire revenue | 3 | 5 269 | 2 168 | 20 442 | 5 752 |
| Total revenues, vessels | 41 713 | 41 325 | 162 731 | 136 521 | |
| Voyage expenses | (18 842) | (22 499) | (71 592) | (75 194) | |
| Net revenues from operations of vessels | 22 871 | 18 826 | 91 139 | 61 327 | |
| Operating expenses, vessels | (10 693) | (8 512) | (37 193) | (29 913) | |
| Group commercial and administrative services | 9 | (1 164) | (1 027) | (3 538) | (4 396) |
| Salaries and social expense Tonnage tax |
(414) (82) |
- (65) |
(1 327) (180) |
- (163) |
|
| Other operating and administrative expenses | (194) | (183) | (776) | (1 093) | |
| Operating profit before depreciation (EBITDA) | 10 323 | 9 038 | 48 125 | 25 763 | |
| Ordinary depreciation | 4 | (5 623) | (4 530) | (19 155) | (14 070) |
| Operating profit after depreciation (EBIT) | 4 701 | 4 508 | 28 971 | 11 692 | |
| Finance income | 7 | 161 | 1 757 | 529 | 3 024 |
| Finance costs | 7 | (3 664) | (4 516) | (14 317) | (14 105) |
| Profit before tax (EBT) | 1 198 | 1 749 | 15 182 | 612 | |
| Income tax expenses | - | (15) | - | (15) | |
| Profit after tax | 1 198 | 1 734 | 15 182 | 597 | |
| Attributable to: | |||||
| Equity holders of the parent company | 1 198 | 1 734 | 15 182 | 597 | |
| Non-controlling interests | - | - | - | - | |
| Total | 1 198 | 1 734 | 15 182 | 597 | |
| Earnings per Share (EPS): | |||||
| Basic and diluted, profit for the period attributable to ordinary equity holders of the parent |
0.02 | 0.04 | 0.32 | 0.01 |
| Quarter ended | Year ended | ||||
|---|---|---|---|---|---|
| Unaudited | Unaudited | Unaudited | Audited | ||
| 31 Dec 2020 | 31 Dec 2019 | 31 Dec 2020 | 31 Dec 2019 | ||
| USD '000 | |||||
| Profit/ (loss) of the period | 1 198 | 1 734 | 15 812 | 5 97 | |
| Other comprehensive income to be reclassified to profit or loss | |||||
| Net movement fair value on cross-currency interest rate swaps (CCIRS) | 9 877 | 1 149 | 1 253 | (1 438) | |
| Reclassification to profit and loss (CCIRS) | (8 191) | (1 038) | (3 715) | 1 347 | |
| Net movement fair value on interest rate swaps | 811 | 79 | (2 491) | (686) | |
| Net movement fair value FX hedge | - | 52 | - | 38 | |
| Net movement fair value bunker hedge | 242 | 348 | 87 | 918 | |
| Net movement fair value FFA hedge | (1 154) | 671 | (1814) | 85 | |
| Net other comprehensive income to be reclassified to profit or loss | 1 586 | 1 261 | (6 679) | 265 | |
| Other comprehensive income/(loss) for the period, net of tax | 1 586 | 1261 | (6 679) | 265 | |
| Total comprehensive income/(loss) for the period, net of tax | 2 783 | 2 995 | 8 503 | 862 | |
| Attributable to: | |||||
| Equity holders of the parent company | 2 783 | 2 995 | 8 503 | 862 | |
| Total | 2 783 | 2 995 | 8 503 | 862 |
(Figures in USD '000)
| Unaudited | Restated* | ||
|---|---|---|---|
| ASSETS | Notes | 31 Dec 2020 | 31 Dec 2019 |
| Non-current assets | |||
| Vessels | 4 | 404 258 | 315 208 |
| Newbuilding contracts | 5 | 48 441 | 62 316 |
| Right of-use assets | 4 | 1 672 | 1 765 |
| Long-term financial assets | 6 | 3 427 | 202 |
| Long-term receivables | 70 | - | |
| Total non-current assets | 457 868 | 379 490 | |
| Current assets | |||
| Short-term financial assets | 6 | 87 | 1 077 |
| Inventories | 6 159 | 7 163 | |
| Trade receivables and other current assets | 18 501 | 14 313 | |
| Short-term receivables from related parties | 742 | 130 | |
| Cash and cash equivalents | 65 685 | 57 089 | |
| Total current assets | 91 174 | 79 772 | |
| 459 262 | |||
| TOTAL ASSETS | 549 043 |
| Unaudited | Restated* | |
|---|---|---|
| EQUITY AND LIABILITIES | 31 Dec 2020 | 31 Dec 2019 |
| Equity | ||
| Share capital 8 |
5 725 | 5 725 |
| Share premium | 130 155 | 130 155 |
| Other reserves | (6 511) | 316 |
| Retained earnings | 87 162 | 76 744 |
| Total equity | 216 532 | 212 941 |
| Non-current liabilities | ||
| Mortgage debt 6 |
206 813 | 169 304 |
| Long-term financial liabilities 6 |
5 409 | 3 626 |
| Long-term lease liabilities | 1 239 | 1 395 |
| Bond loan 6 |
80 649 | 33 836 |
| Total non-current liabilities | 294 109 | 208 161 |
| Current liabilities | ||
| Short-term mortgage debt 6 |
22 473 | 17 367 |
| Other interest bearing liabilities 6 |
- | 1 835 |
| Short-term financial liabilities 6 |
757 | - |
| Short-term lease liabilities | 493 | 407 |
| Trade and other payables | 13 165 | 17 778 |
| Short-term debt to related parties | 1 339 | 617 |
| Tax liabilities | 175 | 157 |
| Total current liabilities | 38 401 | 38 161 |
| TOTAL EQUITY AND LIABILITIES | 549 043 | 459 262 |
* Restatement described in note 12
Oslo, 18 February 2021
The Board of Directors of
Klaveness Combination Carriers ASA
Chairman of the Board
Lori Wheeler Næss
Board member
Rebekka Glasser Herlofsen
Magne Øvreås Board member
Board member
Morten Skedsmo
Board member
Engebret Dahm CEO
(Figures in USD '000)
| 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 | - | - | - | - | 15 182 | 15 182 |
| Other comprehensive income for the period | - | - | - | (6 679) | - | (6 679 |
| Purchase of own shares | - | - | (147) | - | - | (147) |
| Share option program | - | - | - | - | 39 | 39 |
| Dividends | - | - | - | - | (4 803) | (4 803) |
| Equity at 31 December 2020 | 5 725 | 130 155 | (147) | (6 363) | 87 162 | 216 532 |
| Restated* 2019 |
Share capital |
Other paid in capital |
Treasury Shares |
Hedging reserve |
Retained earnings |
Total |
|---|---|---|---|---|---|---|
| Equity 1 January 2019 | 4 863 | 92 271 | - | 51 | 80 901 | 178 086 |
| Correction from prior periods* | (937) | (937) | ||||
| Equity 1 January 2019, restated | 4 863 | 92 271 | - | 51 | 79 964 | 177 149 |
| Profit (loss) for the period | - | - | - | - | 597 | 597 |
| Other comprehensive income for the period | - | - | - | 265 | - | 265 |
| Capital increase (May 20, 2019) | 845 | 37 080 | - | - | - | 37 925 |
| Capital increase (June 21, 2019) | 17 | 805 | - | - | - | 822 |
| Share option program | - | - | - | - | 3 | 3 |
| Dividends | - | - | - | - | (3 820) | ( 3 820) |
| Equity at 31 December 2019, restated | 5 725 | 130 155 | - | 316 | 76 744 | 212 941 |
* Restatement described in note 12
(Figures in USD '000)
| Quarter ended | Year ended | ||||
|---|---|---|---|---|---|
| Unaudited | Unaudited | Unaudited | Audited | ||
| Notes | 31 Dec 2020 | 31 Dec 2019 | 31 Dec 2020 | 31 Dec 2019 | |
| Profit before tax | 1 198 | 1 749 | 15 182 | 612 | |
| Tonnage tax expensed | 82 | 65 | 180 | 163 | |
| Ordinary depreciation | 4 | 5 623 | 4 530 | 19 155 | 14 070 |
| Amortization of upfront fees bank loans | 207 | 130 | 693 | 373 | |
| Financial derivatives unrealised loss / gain (-) | 6 | 86 | (986) | (342) | 3 681 |
| Gain/loss on foreign exchange | (107) | 998 | (4) | (1 074) | |
| Interest income | 7 | (14) | (288) | (271) | (1 885) |
| Interest expenses | 7 | 3 195 | 2 854 | 11 884 | 9 889 |
| Taxes paid for the period | - | - | - | (46) | |
| Change in current assets | (5 322) | (3 423) | (3 797) | (5 090) | |
| Change in current liabilities | 4 507 | 8 913 | (2 573) | 9 294 | |
| Interest received | 7 | 14 | 288 | 271 | 1 885 |
| A: Net cash flow from operating activities | 9 469 | 14 831 | 40 013 | 31 873 | |
| Acquisition of tangible assets | 4 | (991) | (3 072) | (4 271) | (6 010) |
| Installments and other cost on newbuilding contracts | 5 | (34 859) | (13 950) | (88 634) | (158 285) |
| B: Net cash flow from investment activities | (35 850) | (17 022) | (92 905) | (164 295) | |
| Proceeds from mortgage debt | 6 | 60 450 | - | 60 450 | 93 000 |
| Net proceeds from bond loan | - | - | - | (630) | |
| Proceeds from bond loan (KCC04) | 6 | - | - | 76 390 | - |
| Buyback of bond loan (KCC03) | 6 | (16 221) | - | (34 100) | - |
| Transaction costs on issuance of loans | 6 | (709) | (193) | (1 914) | (1 596) |
| Repayment of mortgage debt | 6 | (4 342) | (3 911) | (17 367) | (13 923) |
| Terminated financial instruments | - | - | (3 101) | - | |
| Interest paid | 7 | (3 246) | (2 669) | (11 632) | (9 014) |
| Repayment of financial lease liabilities | (125) | (107) | (454) | (385) | |
| Purchase of own shares | - | - | (147) | - | |
| Capital increase May 20, 2019 | - | - | - | 40 096 | |
| Transaction costs on capital increase | - | - | - | (2 147) | |
| Dividends | (1 441) | (480) | (4 802) | (3 814) | |
| C: Net cash flow from financing activities | 34 366 | (7 360) | 63 322 | 101 587 | |
| Net change in liquidity in the period (A + B + C) | 7 986 | (9 551) | 10 431 | (30 836) | |
| Cash and cash equivalents at beginning of period* | 57 699 | 64 805 | 55 254 | 86 090 | |
| Cash and cash equivalents at end of period* | 65 685 | 55 254 | 65 685 | 55 254 | |
| Net change in cash and cash equivalents in the period | 7 986 | (9 551) | 10 431 | (30 836) | |
| Cash and cash equivalents | 65 685 | 57 089 | 65 685 | 57 089 | |
| Other interest bearing lialibities (overdraft facility) | - | 1 835 | - | 1 835 | |
| Cash and cash equivalents (as presented in cash flow state ment) |
65 685 | 55 254 | 65 685 | 55 254 | |
* Cash and cash equivalents include drawn amount on overdraft facility.
| 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 |
| 11 | Reconciliation of alternative performance measures |
| 12 | Restatement of 2019 |
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 five CLEANBU vessels in operation and three CLEANBU newbuildings with estimated delivery in 1H 2021. The sixth CLEANBU vessel was delivered 11 January 2021. 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 European 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 2019, which have been prepared in accordance with IFRS, as adopted by the European Union.
During second quarter 2020, three CLEANBU vessels owned by KCC Shipowning AS were sold to KCC KBA AS, which is subject to ordinary Norwegian taxation. In third quarter 2020 two of the CLEANBUS were sold back to KCC Shipowning, and KCC KBA AS owned as per end ofDecember 2020 one CLEANBU, MV Barracuda. Due to unrecognized losses carried forward in the Group, the transfer to ordinary taxation did not have any material impact on the tax expense for the period. Tax expense for the Group in 2020 is zero.
Where KCC has acquired own shares under a share buy-back program, the amount of consideration paid, including directly attributable costs, is recognized as a change in equity and classified as treasury shares. No gain or loss are recognized in profit and loss related to the purchase, sale, issue, reissue or cancellation of KCC's own equity instruments.
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 2019, except for the adoption of new accounting standards or amendments with effective date after 1 January 2020. 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. As per year-end 2020, the Group owned nine CABUs, five CLEANBUs on water and three CLEANBUs on order with expected deliveries in first half of 2021. The sixth CLEANBU vessel was delivered on 11 January 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 typesof dry bulk products.
| Q4 2020 | Q4 2019 | |||||
|---|---|---|---|---|---|---|
| (USD'000) | CABU | CLEANBU | Total | CABU | CLEANBU | Total |
| Operating revenue, vessels | 28 918 | 12 795 | 41 713 | 34 869 | 6 456 | 41 325 |
| Voyage expenses | (14 216) | (4 626) | (18 842) | (19 463) | (3 036) | (22 499) |
| Net revenue | 14 702 | 8 169 | 22 871 | 15 406 | 3 420 | 18 826 |
| Operating expenses, vessels | (5 850) | (4 844) | (10 693) | (5 397) | (3 115) | (8 512) |
| Group administrative services | (637) | (527) | (1 164) | (651) | (376) | (1 027) |
| Salaries and social expense | (226) | (187) | (414) | - | - | - |
| Tonnage tax | (61) | (21) | (82) | (55) | (10) | (65) |
| Other operating and administrative expenses | (106) | (88) | (194) | (116) | (67) | (183) |
| Operating profit before depreciation (EBITDA) | 7 822 | 2 501 | 10 323 | 9 186 | (147 ) | 9 038 |
| Ordinary depreciation | (3 035) | (2 588) | (5 623) | (2 974) | (1 556) | (4 530) |
| Operating profit after depreciation (EBIT) | 4 788 | (87) | 4 701 | 6 212 | (1 703) | 4 508 |
| Q4 2020 | ||||||
|---|---|---|---|---|---|---|
| (USD'000) | CABU | CLEANBU | Total | CABU | CLEANBU | Total |
| Net revenues from operations of vessels | 14 702 | 8 169 | 22 871 | 15 406 | 3 420 | 18 826 |
| IFRS 15 adjustment* | (156) | 57 | (99) | 153 | 665 | 818 |
| Net revenue ex IFRS adjustment | 14 546 | 8 226 | 22 772 | 15 559 | 4 085 | 19 644 |
| Onhire days | 767 | 395 | 1 162 | 819 | 218 | 1 037 |
| Average TCE earnings per onhire day (\$/d) | 18 958 | 20 840 | 19 597 | 19 002 | 18 715 | 18 941 |
| Q4 2020 | Q4 2019 | |||||
|---|---|---|---|---|---|---|
| (USD'000) | CABU | CLEANBU | Total | CABU | CLEANBU | Total |
| Operating expenses, vessels | 5 850 | 4 844 | 10 693 | 5 397 | 3 115 | 8 512 |
| Leasing cost previously presented as opex | 81 | 45 | 125 | 93 | 31 | 124 |
| Reversal old claim | - | - | 285 | - | 285 | |
| Start up cost CLEANBU vessels | - | (630) | (630) | - | (155) | (155) |
| Operating expenses, vessels adjusted | 5 930 | 4 259 | 10 189 | 5 776 | 2 991 | 8 766 |
| Operating days | 828 | 447 | 1 275 | 828 | 276 | 1 104 |
| Opex per day (\$/d) | 7 162 | 9 527 | 7 991 | 6 975 | 10 836 | 7 940 |
| Q4 2020 YTD | Q4 2019 YTD | |||||
|---|---|---|---|---|---|---|
| (USD'000) | CABU | CLEANBU | Total | CABU | CLEANBU | Total |
| Operating revenue, vessels | 122 208 | 40 523 | 162 730 | 123 445 | 13 077 | 136 521 |
| Voyage expenses | (60 281) | (11 311) | (71 592) | (70 048) | (5 145) | (75 193) |
| Net revenue | 61 926 | 29 212 | 91 139 | 53 397 | 7 932 | 61 327 |
| - | - | |||||
| Operating expenses, vessels | (23 829) | (13 364) | (37 193) | (21 681) | (8 231) | (29 913) |
| Group administrative services | (2 251) | (1 287) | (3 538) | (3 494) | (902) | (4 396) |
| Salaries and social expense | (844) | (483) | (1 327) | - | - | - |
| Tonnage tax | (134) | (46) | (180) | (143) | (20) | (163) |
| Other operating and administrative expenses | (503) | (272) | (776) | (795) | (298) | (1 093) |
| Operating profit before depreciation (EBITDA) | 34 364 | 13 760 | 48 125 | 27 284 | (1 520) | 25 763 |
| Ordinary depreciation | (11 643) | (7 513) | (19 155) | (10 706) | (3 364) | (14 070) |
| Operating profit after depreciation (EBIT) | 22 722 | 6 248 | 28 971 | 16 577 | (4 884) | 11 692 |
| Q4 2020 YTD | Q4 2019 YTD | |||||
|---|---|---|---|---|---|---|
| (USD'000) | CABU | CLEANBU | Total | CABU | CLEANBU | Total |
| Net revenues from operations of vessels | 61 926 | 29 212 | 91 139 | 53 397 | 7 932 | 61 329 |
| IFRS 15 adjustment* | (234) | (512) | (746) | 123 | 572 | 695 |
| Offhire compensation | - | (134) | (134) | - | - | - |
| Net revenue ex IFRS adjustment | 61 692 | 28 566 | 90 259 | 53 520 | 8 504 | 62 024 |
| Onhire days | 3 102 | 1 198 | 4 300 | 3 171 | 465 | 3 636 |
| Average TCE earnings per onhire day (\$/d) | 19 886 | 23 851 | 20 990 | 16 877 | 18 300 | 17 060 |
| Q4 2020 YTD | Q4 2019 YTD | ||||
|---|---|---|---|---|---|
| CABU | CLEANBU | Total | CABU | CLEANBU | Total |
| 23 829 | 13 364 | 37 193 | 21 681 | 8 231 | 29 913 |
| 326 | 127 | 453 | 372 | 72 | 445 |
| - | - | 285 | - | 285 | |
| - | (1391) | (1 391) | - | (1 724) | (1 724) |
| 24 156 | 12 099 | 36 255 | 22 339 | 6 580 | 28 918 |
| 3 294 | 1 326 | 4 620 | 3 285 | 612 | 3 897 |
| 7 333 | 9 125 | 7 848 | 6 800 | 10 751 | 7 421 |
| - |
The Group has income from COA contracts (1-3 years duration), spot voyages and TC contracts. Set out below is the disaggregation of the Group's revenue from contracts with customers.
| Revenue types | Quarter ended | YTD | |||
|---|---|---|---|---|---|
| USD'000 | Classification | 31 Dec 2020 | 31 Dec 2019 | 31 Dec 2020 | 31 Dec 2019 |
| Revenue from COAs | Freight revenue | 23 109 | 28 597 | 100 659 | 98 110 |
| Revenue from spot voyages | Freight revenue | 13 336 | 10 560 | 41 631 | 32 658 |
| Revenue from TC contracts | Charter hire revenue | 5 269 | 2 168 | 20 308 | 5 752 |
| Other revenue | Charter hire revenue | - | - | 134 | - |
| Total revenue, vessels | 41 713 | 41 325 | 162 731 | 136 521 |
| Vessels | ||||
|---|---|---|---|---|
| (USD '000) | 31 Dec 2020 | 31 Dec 2019 | ||
| Cost price 1.1 | 492 075 | 330 218 | ||
| Delivery of newbuildings | 103 708 | 155 847 | ||
| Adjustment acquisition value newbuildings delivered | (809) | - | ||
| Additions (mainly upgrading and docking of vessels) | 4 852 | 6 010 | ||
| Costprice end of period | 599 826 | 492 075 | ||
| Acc. Depreciation 1.1 | 176 866 | 163 181 | ||
| Depreciation for the period | 18 702 | 13 685 | ||
| Acc. Depreciation end of period | 195 568 | 176 866 | ||
| Carrying amounts end of period* | 404 258 | 315 208 | ||
| *carrying value of vessels includes dry-docking | ||||
| No. of vessels | 14 | 12 | ||
| Useful life | 25 | 25 | ||
| Depreciation schedule | Straight-line | Straight-line | ||
| Reconciliation of depreciations | Quarter ended | YTD | ||
| USD'000 | 31 Dec 2020 | 31 Dec 2019 | 31 Dec 2020 | 31 Dec 2019 |
The CLEANBU vessels MV Baleen and MV Bangus were delivered from Jiangsu New Yangzi Shipbuilding Co. Ltd, respectievely, 4 August 2020 and 13 October 2020. The CABU vessels MV Bantry, MV Bangor and MV Banasol have performed scheduled dry-docking in 2020 of in total USD 4.8 million. Dry-docking of MV Banasol was completed early January 2021 and related addition in Q4 2020 of USD 1.7 million is presented as prepaid expense.
Depreciation vessels 5 497 4 423 18 702 13 685 Depreciation right of use assets 125 107 453 385
Identification of impairment indicators is based on an assessment 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 somewhat higher opex and more offhire caused by Covid-19, however, TCE earnings for Q4 for both the fleet of CABUs and the fleet of CLEANBUs and diversified market exposure support the conclusion of no impairment indicators identified as per 31 December 2020. Contract coverage for the CABUs for 2021 is high, while the CLEANBUs will trade in the spot market. The CLEANBU fleet shows good progress expanding service into the clean petroleum product markets. New milestones related to acceptance from new customers and new ports as well as expanding into new trading patterns are reached every quarter.
The Group has per 31 December 2020 three CLEANBU combination carrier newbuildings on order at Jiangsu New Yangzi ShipbuildingCo., Ltd in China, whereof MV Baiacu was delivered 11 January 2021 (note 10), and the last two newbuildings will be delivered first half 2021. During Q4 2020, the Group took delivery of the fifth CLEANBU vessel, MV Bangus (note 4).
The fleet of newbuildings are fully financed (note 6).
| (USD '000) | 31 Dec 2020 | 31 Dec 2019 |
|---|---|---|
| Cost 1.1 | 62 316 | 59 877 |
| Borrowing cost | 1 023 | 1 302 |
| Yard installments paid | 80 851 | 148 170 |
| Other capitalized cost | 7 960 | 8 813 |
| Delivery of newbuilings | (103 708) | (155 847) |
| Net carrying amount | 48 441 | 62 316 |
The commitments related to the three newbuildings as per 31 December 2020 are set out below.
| Remaining installments at 31 December 2020 | ||
|---|---|---|
| (USD '000) | 2021 | Total |
| Combination carriers | 97 650 | 97 650 |
| Total commitments newbuildings | 97 650 | 97 650 |
The below tables present the Group's financing arrangements as per 31 December 2020.
During Q4 2020 two drawdowns of in total USD 60.45 million were made under the SEB/SR-Bank/SPV term loan facility in connection with the delivery of MV Baleen and MV Bangus. MV Baleen was delivered in Q3 but debt drawdown was postponed until Q4. The Group also repaid the remaining outstanding amount of NOK 142 million under the KCC03 bond loan at 101% of par in Q4 2020.
| (USD '000) | ||||
|---|---|---|---|---|
| Mortgage debt | Description | Interest rate | Maturity | Carrying amount |
| Nordea/Danske Facility | Term loan, USD 100 mill | LIBOR + 2.3 % | March 2022 | 76 763 |
| DNB/SEB Facility | Term loan, USD 105 mill | LIBOR + 2.3 % | December 2023 | 93 311 |
| SEB/SR-Bank/SPV Facility* | Term loan/RCF, 90.675 mill | LIBOR + 2.3 % | October 2025 | 60 450 |
| Nordea/Crédit Agricole Facility** |
Term loan/RCF, 60 mill | LIBOR + 2,75 % | March 2026 | - |
| Capitalized loan fees | (1 239) | |||
| Mortgage debt 31 December 2020 | 229 285 |
*Facility relates to financing of the three CLEANBU vessels with delivery in 2020 and January 2021. Additional USD 15 million of the USD 30.225 million RCF facility was drawn in January 2021 upon delivery of MV Baiacu.
**Facility relates to financing of the two CLEANBU vessels with delivery in 2021. Potential margin adjustments up to +/- 10 bps once every year based on sustainability KPIs.
| Carrying amount | |||
|---|---|---|---|
| Face value | 31 Dec 2020 | ||
| Bond loan | NOK'000 | Maturity | USD'000 |
| KCC03 | 300 000 | 27.05.2021 | 35 370 |
| Buyback KCC03 (Q1 2020) | (158 000) | (18 628) | |
| Buyback KCC 03 (Q4 2020) | (142 000) | (16 051) | |
| Realised agio | (691) | ||
| Capitalized expenses | - | ||
| Sum KCC03 | - | ||
| KCC04 | 700 000 | 11.02.2025 | 76 390 |
| Exchange rate adjustment | 5 602 | ||
| Capitalized expenses | (1 032) | ||
| Bond discount | (310) | ||
| Sum KCC04 | 80 649 | ||
| Total bond loan | 700 000 | 80 649 |
| (USD '000) | Fair value | Carrying amount | Carrying amount |
|---|---|---|---|
| Interest bearing liabilities | 31 Dec 2020 | 31 Dec 2020 | 31 Dec 2019 |
| Mortgage debt | 208 052 | 208 052 | 170 074 |
| Capitalized loan fees | - | (597) | (770) |
| Bond loan | 78 097 | 81 991 | 34 023 |
| Bond discount | - | (310) | - |
| Capitalized expenses bond loan | - | (1 032) | (187) |
| Total non-current interest bearing liabilties | 286 148 | 287 462 | 203 139 |
| Mortgage debt, current | 22 473 | 22 473 | 17 367 |
| Overdraft facility (Secured) | - | - | 1 835 |
| Total interest bearing liabilities | 308 621 | 309 934 | 222 341 |
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 31 Dec 2020 < 1 year 1-3 years 3-5 years > 5 years Total Mortgage debt (incl interests) (29 422) (167 733) (52 920) - (250 075) Bond loan (incl interest) (4 757) (9 515) (80 678) - (94 950) Total (34 179) (177 248) (133 598) - (345 025) |
|---|
Loan facilities to be refinanced during the next 12 months are included in <1 year.
As per 31 December 2020, 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.
| Financial assets | ||
|---|---|---|
| (USD '000) | 31 Dec 2020 | 31 Dec 2019 |
| Financial instruments at fair value through OCI | ||
| Interest rate swaps | 356 | - |
| Cross-currency interest rate swap | 2 917 | - |
| Forward freight agreements | - | 1 056 |
| Fuel Hedge | 87 | - |
| Financial instruments at fair value through P&L | ||
| Forward freight agreements | - | 21 |
| Interest rate swaps | 154 | 202 |
| Financial assets | 3 515 | 1 279 |
| Current | 87 | 1 077 |
| Non-current | 3 427 | 202 |
| Financial liabilities | ||
| (USD '000) | 31 Dec 2020 | 31 Dec 2019 |
| Financial instruments at fair value through OCI | ||
| Cross-currency interest rate swap (CCIRS) | 5 409 | 1438 |
| Interest rate swaps | - | 364 |
| Forward freight agreements | 757 | - |
| Financial instruments at fair value through P&L | ||
| Interest rate swaps | - | 1 825 |
| Financial liabilities | 6 166 | 3 626 |
| Current | 757 | - |
| Non-current | 5 409 | 3 626 |
| (USD '000) | Quarter ended | Year ended | ||
|---|---|---|---|---|
| Finance income | 31 Dec 2020 | 31 Dec 2019 | 31 Dec 2020 | 31 Dec 2019 |
| Other interest income | 54 | 288 | 398 | 1 885 |
| Fair value changes interest rate swaps | - | 1 469 | - | - |
| Fair value changes in FFA | - | - | - | 21 |
| Gain on foreign exchange | 107 | - | 131 | 1 074 |
| Other financial income | - | - | - | 43 |
| Finance income | 161 | 1 757 | 529 | 3 024 |
| (USD '000) | Quarter ended | Year ended | ||
|---|---|---|---|---|
| Finance cost | 31 Dec 2020 | 31 Dec 2019 | 31 Dec 2020 | 31 Dec 2019 |
| Interest paid to related parties | - | - | - | 202 |
| Interest expenses mortgage debt | 1 921 | 2 260 | 7 729 | 7 563 |
| Interest expenses bond loan | 1 246 | 594 | 4 062 | 2 124 |
| Interest expenses lease liabilities | 27 | 27 | 94 | 96 |
| Amortization capitalized fees mortage debt | 207 | 130 | 693 | 373 |
| Other financial expenses* | 176 | 24 | 906 | 86 |
| Fair value changes in FFA | - | 483 | 21 | - |
| Fair value changes and realization of interest rate swaps** | 86 | 998 | 687 | 3 660 |
| Loss on foreign exchange | - | - | 126 | - |
| Finance cost | 3 664 | 4 516 | 14 317 | 14 105 |
*YTD Q4-20 includes premium from buyback of KCC03 in February 2020 and December 2020. Respectively USD 0.6 million and USD 0.2 million.
**YTD Q4-20 includes realized effect from terminated CCIRS against KSH of USD 0.3 million in Q1 2020.
08 Share capital, shareholders, dividends and reserves
Dividends of USD 1.44 million were paid to the shareholders in December 2020 (USD 0.03 per share). In total dividends of USD 4.8 million have been paid to the shareholders in 2020.
| Quarter ended | Year ended | ||||
|---|---|---|---|---|---|
| USD'000 | 31 Dec 2020 | 31 Dec 2019 | 31 Dec 2020 | 31 Dec 2019 | |
| G&A fee to Klaveness AS | 394 | 559 | 1 614 | 2 238 | |
| Commercial management fee to Klaveness AS | 626 | 407 | 1 588 | 1 628 | |
| Projects and R&D fee to Klaveness Ship Management | 110 | - | 180 | - | |
| Travel expenses and operating cost reinvoiced from Klaveness AS | 35 | 60 | 156 | 530 | |
| Group commercial and administrative services | 1 164 | 1 027 | 3 538 | 4 396 |
| 31 Dec 2020 | 31 Dec 2019 | ||
|---|---|---|---|
| 31 Dec 2020 | 31 Dec 2019 | ||
| 824 | 725 | 3 163 | 2 735 |
| 292 | 253 | 1 101 | 953 |
| 499 | 442 | 1 778 | 2 075 |
| - | - | - | 202 |
| 1 420 | 6 042 | 5 965 | |
| 1 616 |
* KSM refers to Klaveness Ship Management AS
10 Events after the balance sheet date
The sixth CLEANBU vessel, MV Baiacu, was delivered from Jiangsu New Yangzi Shipyard in China at 11 January 2021.
On 18 February 2021, the Company's Board of Directors declared to pay a cash dividend to the Company's shareholders of USD 1.44 million for Q4 (USD 0.03 per share).
There are no other events after the balance sheet date that have material effect on the financial statement as of 31 December 2020.
Non-GAAP financial alternative performance measures (APM) that are used are consistent with those used in the previously quarterly reports. Description and definitions of such measures can be found on the company's homepage: https://www.combinationcarriers.com/alternativeperformance-measures
| Reconciliation EBITDA adjusted | Quarter ended | Year ended | ||
|---|---|---|---|---|
| USD'000 | 31 Dec 2020 | 31 Dec 2019 | 31 Dec 2019 | 31 Dec 2020 |
| EBITDA | 10 323 | 9 038 | 48 125 | 25 763 |
| Start up costs CLEANBU vessels | 630 | 155 | 1 391 | 1 724 |
| EBITDA adjusted | 10 953 | 9 193 | 49 517 | 27 487 |
| Reconciliation EBIT adjusted | Quarter ended | Year ended | ||
|---|---|---|---|---|
| USD'000 | 31 Dec 2020 | 31 Dec 2019 | 31 Dec 2020 | 31 Dec 2019 |
| EBIT | 4 701 | 4 508 | 28 971 | 11 692 |
| Start up costs CLEANBU vessels | 630 | 155 | 1 391 | 1 724 |
| EBIT adjusted | 5 331 | 4 663 | 30 362 | 13 417 |
| Reconciliation of average revenue per onhire day (TCE earnings) | Quarter ended | Year ended | |||
|---|---|---|---|---|---|
| USD'000 | 31 Dec 2020 | 31 Dec 2019 | 31 Dec 2020 | 31 Dec 2019 | |
| Net revenues from operations of vessels | 22 871 | 18 826 | 91 139 | 61 327 | |
| Offhire compensation | - | - | - | - | |
| IFRS 15 adjustment* | (99) | 818 | (746) | 695 | |
| Net revenue ex IFRS adjustment | 22 772 | 19 644 | 90 393 | 62 022 | |
| Onhire days | 1 162 | 1 037 | 4 300 | 3 636 | |
| Average revenue per onhire days (\$/d) (TCE earnings) | 19 597 | 18 941 | 20 990 | 17 060 |
| Reconciliation of opex per day | Quarter ended | Year ended | ||
|---|---|---|---|---|
| USD'000 | 31 Dec 2020 | 31 Dec 2019 | 31 Dec 2020 | 31 Dec 2019 |
| Operating expenses, vessels | 10 693 | 8 512 | 37 193 | 29 913 |
| Leasing cost previously presented as opex | 125 | 124 | 453 | 445 |
| Reversal provision | - | 285 | - | 285 |
| Start up costs CLEANBU vessels | (630) | (155) | (1 391) | (1 724) |
| Operating expenses, vessels adjusted | 10 189 | 8 766 | 36 255 | 28 919 |
| Operating days | 1 275 | 1 104 | 4 620 | 3 897 |
| Opex per day (\$/d) | 7 991 | 7 940 | 7 848 | 7 421 |
| Reconciliation of total assets to capital employed and return on capital employed (ROCE) calculation. |
Quarter ended | Year ended | ||
|---|---|---|---|---|
| USD'000 | 31 Dec 2020 | 31 Dec 2019 | 31 Dec 2020 | 31 Dec 2019 |
| Total assets | 549 043 | 459 262 | 549 043 | 459 262 |
| Total liabilities | 332 510 | 246 322 | 332 510 | 246 322 |
| Total equity | 216 532 | 212 940 | 216 532 | 212 940 |
| Total interest-bearing debt | 309 934 | 222 341 | 309 934 | 222 341 |
| Capital employed | 526 466 | 435 282 | 526 466 | 435 282 |
| EBIT adjusted annualised | 21 323 | 18 653 | 30 362 | 13 417 |
| ROCE adjusted | 4 % | 4 % | 6 % | 3 % |
* 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.
| Reconciliation of equity ratio | Quarter ended | Year ended | ||
|---|---|---|---|---|
| USD'000 | 31 Dec 2020 | 31 Dec 2019 | 31 Dec 2020 | 31 Dec 2019 |
| Total assets | 549 043 | 459 262 | 549 043 | 459 262 |
| Total equity | 216 532 | 212 941 | 216 532 | 212 941 |
| Equity ratio | 39 % | 46 % | 39 % | 46 % |
| Reconciliation of total interest-bearing debt | Quarter ended | Year ended | ||
|---|---|---|---|---|
| USD'000 | 31 Dec 2020 | 31 Dec 2019 | 31 Dec 2020 | 31 Dec 2019 |
| Mortgage debt | 206 813 | 169 304 | 206 813 | 169 304 |
| Long-term bond loan | 80 649 | 33 836 | 80 649 | 33 836 |
| Short-term mortgage debt | 22 473 | 17 367 | 22 473 | 17 367 |
| Other interest bearing liabilities | - | 1 835 | - | 1 835 |
| Total interest-bearing debt | 309 934 | 222 341 | 309 934 | 222 341 |
| Restated | |||
|---|---|---|---|
| Assets | 31 Dec 2019 | Adjustment | 31 Dec 2019 |
| Total non-current assets | 379 490 | - | 379 490 |
| Total current assets | 79 772 | - | 79 772 |
| Total assets | 459 262 | - | 459 262 |
| Restated | |||
|---|---|---|---|
| Liabilities | 31 Dec 2019 | Adjustment | 31 Dec 2019 |
| Total equity | 213 878 | (937) | 212 941 |
| Total non-current liabilities | 208 161 | - | 208 161 |
| Total current liabilities | 37 223 | 937 | 38 161 |
| Total equity and liabilities | 459 262 | - | 459 262 |
An error related to incorrect accrual of USD 0.9 million from 2018 has been identified. The error has been corrected against 2019 opening balance in line with IAS 8 with corresponding restatement of statement of changes in equity and balance sheet as of 31.12.2019.
Klaveness Combination Carriers ASA—Fourth Quarter 2020 28
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