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d'Amico International Shipping S.A.
Earnings Release • Aug 1, 2024
9964_ir_2024-08-01_9dbcab2a-8357-472e-8469-a9b3d53ffcf2.pdf
Earnings Release
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PRESS RELEASE
The Board of Directors of d'Amico International Shipping S.A. approves Q2 and H1 2024 Results:
'DIS DELIVERED VERY STRONG RESULTS IN Q2 AND H1 2024: NET PROFIT OF US\$ 66.5M IN Q2 AND US\$ 122.9M IN H1. BEST QUARTERLY SPOT RATE IN ITS HISTORY OF US\$ 44,949 IN Q2. SOLID FINANCIAL STRUCTURE, WITH NET DEBT (EXCLUDING IFRS16) TO FLEET MARKET VALUE RATIO OF ONLY 9.1% AND CASH AND CASH EQUIVALENTS OF US\$ 181.9M AS AT 30 JUNE '24'
FIRST HALF 2024 RESULTS
- Time charter equivalent earnings (TCE) of US\$ 210.5 million (US\$ 203.5 million in H1'23)
- Total net revenue of US\$ 213.0 million (US\$ 205.9 million in H1'23)
- Gross operating profit/EBITDA of US\$ 161.1 million (75.7% on total net revenue) (US\$ 142.7 million in H1'23)
- Net result of US\$ 122.9 million (US\$ 99.8 million in H1'23)
- Adjusted Net result (excluding non-recurring items) of US\$ 118.4 million (US\$ 103.6 million in H1'23)
- Cash flow from operating activities of US\$ 155.2 million (US\$ US\$ 173.0 million in H1'23)
- Net debt of US\$ 122.2 million (US\$ 107.6 million excluding IFRS16) as at 30 June 2024 (US\$ 224.3 million and US\$ 198.7 million excluding IFRS16, as at 31 December 2023)
SECOND QUARTER 2024 RESULTS
- Time charter equivalent earnings (TCE) of US\$ 106.5 million (US\$ 97.2 million in Q2'23)
- Total net revenue of US\$ 107.7 million (US\$ 98.4 million in Q2'23)
- Gross operating profit/EBITDA of US\$ 85.0 million (US\$ 66.3 million in Q2'23)
- Net result of US\$ 66.5 million (US\$ 45.7 million in Q2'23)
- Adjusted Net result (excluding non-recurring items) of US\$ 61.7 million (US\$ 47.1 million in Q2'23)
Luxembourg - August 1 st, 2024 – The Board of Directors of d'Amico International Shipping S.A. (Borsa Italiana: "DIS") (hereinafter: "the Company", "d'Amico International Shipping" or the "Group"), a leading international marine transportation company operating in the product tanker market, today examined and approved the Company's half-year and second quarter 2024 consolidated financial results.
MANAGEMENT COMMENTARY
Carlos di Mottola, Chief Executive Officer of d'Amico International Shipping commented:
'I am proud to report that DIS has achieved outstanding financial results for the first six months of 2024. We realized a net profit of US\$122.9 million in H1 2024, compared with US\$99.8 million in the same period last year. In Q2 2024, our net profit was of US\$66.5 million, up from US\$45.7 million in Q2 2023, an excellent result highlighting the strength of the product tanker market.
Our daily spot rate in H1 2024 was of US\$41,404, a 21% increase from US\$34,216 in H1 2023. This rate climbed further to US\$44,949 in Q2 2024, marking a 42% rise relative to the same quarter of the previous
year and corresponds to our highest quarterly spot result in history. Additionally, DIS successfully covered 41.9% of its employment days at an average daily TCE rate of US\$28,016 in H1 2024, compared with a 26.2% coverage at an average rate of US\$27,419 in H1 2023. Consequently, our total blended daily TCE (spot and time-charter) was of US\$35,798 in H1 2024, up from US\$32,434 in H1 2023, and reached US\$37,698 in Q2 2024, compared with US\$30,831 in the same quarter last year.
DIS is capitalizing on favorable conditions in the product tanker sector, driven by limited fleet growth, rising global oil trade, and trade disruptions. Attacks by Houthis in the Red Sea and Gulf of Aden have forced most operators, including DIS, to reroute vessels via the Cape of Good Hope, increasing average distances sailed. Furthermore, the war in Ukraine has impacted oil markets, with EU sanctions and the associated price cap on Russian exports, reshaping trade flows. Russian exports to the EU have decreased, while shipments to China, India, Turkey, and other regions have increased, resulting in longer sailing times.
Our industry is also benefiting from some structural long-term trends. The IEA projects global oil demand to rise by 1.0 mb/d in FY 2024. Global refinery throughput should instead rise by 0.9 mb/d to 83.4 mb/d this year, mainly in countries east of the Suez Canal. While China led refinery throughput growth in 2023, the Middle East (+0.5 mb/d), Africa (+0.2 mb/d), and other Asian countries excluding China (+0.2 mb/d) will drive the expansion this year. The rise in Middle Eastern throughput is due mainly to new capacity which recently came online in Kuwait and Oman. This ongoing shift in refinery capacity to the Middle East and Asia, far from major consumption centers such as Europe, the USA, and Australia, should continue boosting ton-mile demand for product tankers.
The product tanker industry can also count on favorable tonnage supply dynamics. Although vessel orders have increased, market participants remain cautious about newbuilds due to rising costs, technological uncertainties, and limited shipyard availability, leading to delivery times often beyond 2027. Additionally, the global fleet is aging rapidly; as of June 2024, 13.5% of the MR and LR1 fleet (by deadweight tonnage) is over 20 years old, and 46.9% exceeds 15 years. Meanwhile, the current order book for these segments represents only 11.5% of the existing trading fleet.
In the first half of the year, DIS actively engaged in the sale and purchase market. We sold the MT Glenda Melanie, a 2010-built MR and the oldest vessel in our fleet, at an attractive price of US\$27.4 million. In April 2024, we ordered four new LR1 vessels from a reputable Chinese shipyard, with expected delivery in the second half of 2027. These highly efficient and environmentally friendly vessels will significantly enhance our presence in the LR1 segment, which we expect to offer promising returns in the coming years. In June 2024, we also exercised a purchase option on the M/T Crimson Jade, a 2017-built MR, for US\$31.0 million, approximately 30% below the vessel's current market value.
Furthermore, we have leveraged the strong product tanker market to increase our fixed contract coverage, enhancing earnings visibility for the coming years. We successfully concluded two three-year time charter contracts at very profitable levels. Looking forward, we have already covered 37% of our available vessel days in H2 2024 at approximately US\$27,500 per day and 19% of our available vessel days in FY 2025 at around US\$24,650 per day.
Thanks to our strategic decisions, our remarkable financial strength, and the dedication and professionalism of our team, we are in an excellent position to generate compelling returns for our shareholders for the next several years.'
Federico Rosen, Chief Financial Officer of d'Amico International Shipping commented:
'In the first half of 2024, DIS reported a robust net profit of US\$122.9 million, a significant increase from US\$99.8 million in the same period last year. In the second quarter alone, we achieved a net profit of
US\$66.5 million, compared with US\$45.7 million in Q2 2023, underscoring our strong financial performance, bolstered by a thriving product tanker market.
Our EBITDA for H1 2024 reached US\$161.1 million, up from US\$142.7 million in the same period of the prior year. Operating cash flow stood instead at US\$155.2 million in H1 2024, compared with US\$173.0 million in H1 2023. The variance is primarily due to a US\$34.0 million positive timing effect in working capital realized in H1 2023.
In the first half of 2024, we continued to strengthen our financial structure, thanks to a solid cash flow generation. As of June 2024, our net financial position (NFP) was of US\$122.2 million, with cash and cash equivalents amounting to US\$181.9 million, a significant decrease relative to the NFP of US\$224.3 million at the end of 2023. Our leverage ratio, calculated as the NFP (excluding IFRS16 effects) to our fleet's market value, also improved markedly to 9.1% at the end of H1 2024, down from 18.0% at the end of 2023 (72.9% at the end of 2018). Capitalizing on our strong liquidity and excellent credit rating, we reimbursed some of our more expensive bank loans and drew down some new facilities at significantly tighter margins.
As we report another quarter of remarkable achievements, we extend our heartfelt appreciation to our shareholders for their enduring support and trust. Together, we will continue to drive success and create lasting value, ensuring a bright future for our company and stakeholders alike.'
FINANCIAL REVIEW
SUMMARY OF THE RESULTS IN THE SECOND QUARTER AND FIRST HALF OF 2024
The product tanker market remained robust throughout the first half of the year, driven by limited fleet growth, increasing global oil trade volumes, and significant disruptive factors, such as the Houthi attacks on vessels in the Red Sea and Gulf of Aden, as well as the ongoing war in Ukraine.
According to Clarksons' 'Oil and Tanker Trade Outlook' report (June 2024), product tanker demand (measured in deadweight tons) is projected to grow by 5.3% in 2024, marking the fourth consecutive year of strong expansion. The re-routing of vessels around the Cape of Good Hope due to Red Sea disruption has provided notable support to this demand. Product tanker arrivals in the Gulf of Aden have decreased by approximately 60% compared to typical levels, while transits around the Cape of Good Hope have more than doubled. Current projections anticipate that Red Sea-related disruptions will persist through Q3 2024; however, a longer period of disruption could amplify these impacts.
The growth in global oil demand and refinery capacity is also bolstering global products trade volumes this year. New refineries in Kuwait, Oman and Nigeria are contributing to this growth, alongside strong export volumes from the USA driven by high refinery utilization rates. The short-term outlook remains positive, with the ongoing disruptions in the Red Sea providing additional support to an already strong market. Notably, Middle East diesel exports exceeded 1.8million b/d for the first time in June, targeting Europe as its key market.
One area where disruption has eased is Panama. Water levels in the Panama Canal have gradually increased, and transit restrictions were lifted throughout the first half of 2024. This has led to a normalization of auction prices and a stabilization of the product trade from the US Gulf to the West Coast of Latin America.
The one-year time-charter rate is always the best indicator of spot market expectations and as at the end of June 2024 was assessed at around US\$ 34,000 per day for an eco MR2, at a premium of around US\$ 4,000 per day relative to a conventional MR.
In H1 2024, DIS recorded a Net profit of US\$ 122.9 million vs. US\$ 99.8 million posted in the same period of 2023. Such positive variance is attributable to the stronger product tanker market relative to the same period of last year. Excluding results on disposal and non-recurring financial items, DIS' Net result would have amounted to US\$ 118.4 million in H1 2024, compared with US\$ 103.6 million recorded in H1 2023. In Q2 2024, DIS posted a Net profit of US\$ 66.5 million vs. US\$ 45.7 million in the second quarter of last year. Excluding results on disposal and non-recurring financial items, DIS' Net result would have amounted to US\$ 61.7 million in Q2 2024 compared with US\$ 47.1 million in Q2 2023.
DIS generated an EBITDA of US\$ 161.1 million in H1 2024 vs. US\$ 142.7 million achieved in H1 2023 (Q2 2024: US\$ 85.0 million vs. Q2 2023: US\$ 66.3 million), whilst its operating cash flow was positive for US\$ 155.2 million in H1 2024 compared with US\$ 173.0 million in the same period of last year.
In terms of spot performance, DIS achieved a daily spot rate of US\$ 41,404 in H1 2024 vs. US\$ 34,216 in H1 2023 (Q2 2024: US\$ 44,949 vs. Q2 2023: US\$ 31,746), due to a stronger market relative to the same period of last year.
At the same time, 41.9% of DIS' total employment days in H1 2024, were covered through 'time-charter' contracts at an average daily rate of US\$ 28,016 (H1 2023: 26.2% coverage at an average daily rate of US\$ 27,419). A good level of time charter coverage is one of the pillars of DIS' commercial strategy and allows it to mitigate the effects of the spot market volatility, securing a certain level of earnings and cash generation even throughout negative cycles. DIS' total daily average rate (which includes both spot and time-charter contracts) was of US\$ 35,798 in the first six months of 2024, compared with US\$ 32,434 achieved in the same period of 2023 (Q2 2024: US\$ 37,698 vs. Q2 2023: US\$ 30,831).
OPERATING PERFORMANCE
Revenue was US\$ 269.3 million in H1 2024 (US\$ 270.8 million in H1 2023) and US\$ 137.1 million in Q2 2024 (US\$ 130.6 million in Q2 2023). The slight decrease in gross revenue compared with the previous year is attributable mainly to the lower exposure to the spot market and to a lower number of equivalent vessels employed compared to H1 2023. In addition, the percentage of off-hire days in H1 2024 (4.6%) was higher than in the same period of the previous year (2.0%), mainly due to the timing of commercial off-hires and dry-docks.
Voyage costs reflect the mix of spot and time-charter employment contracts. These costs, which occur only for vessels employed on the spot market, amounted to US\$ (58.7) million in H1 2024 compared with US\$ (67.3) million in H1 2023 (Q2 2024: US\$ (30.6) million vs. Q2 2023: US\$ (33.4) million). The lower costs reflect DIS' lower exposure to the spot market relative to the same period of last year.
Time charter equivalent earnings were of US\$ 210.5 million in H1 2024 vs. 203.5 million in H1 2023 and US\$ 106.5 million in Q2 2024 vs. US\$ 97.2 million in Q2 2023. In detail, DIS realized a daily average spot rate of US\$ 41,404 in H1 2024 compared with US\$ 34,216 achieved in H1 2023, and of US\$ 44,949 in Q2 2024 compared with US\$ 31,746 in Q2 2023.
In H1 2024, DIS maintained a good level of 'coverage'1 (fixed-rate contracts), securing an average of 41.9%
1 Coverage ratio (%) and daily average covered rate include a bareboat charter out contract on an LR1 vessel owned by d'Amico Tankers d.a.c., inclusive of an assumed daily Opex of US\$ 7,504 (in line with DIS' actual costs), in order to express this bareboat
(H1 2023: 26.2%) of its available vessel days at a daily average fixed rate of US\$ 28,016 (H1 2023: US\$ 27,419). In addition to securing revenue and supporting the operating cash flow generation, these contracts enabled DIS to strengthen its historical relationships with the main oil majors.
DIS' total daily average TCE (Spot and Time Charter)2 was of US\$ 35,798 in H1 2024 vs. US\$ 32,434 in H1 2023, and of US\$ 37,698 in Q2 2024 vs. US\$ 30,831 in Q2 2023.
| DIS TCE daily rates | 2023 | 2024 | |||||||
|---|---|---|---|---|---|---|---|---|---|
| (US dollars) | |||||||||
| Q1 | Q2 | H1 | Q3 | Q4 | FY | Q1 | Q2 | H1 | |
| Spot | 36,652 | 31,746 | 34,216 | 31,746 | 30,999 | 32,873 | 38,201 | 44,949 | 41,404 |
| Fixed | 26,367 | 28,383 | 27,419 | 28,383 | 28,474 | 28,107 | 28,123 | 27,903 | 28,016 |
| Average | 34,056 | 30,831 | 32,434 | 30,860 | 30,099 | 31,451 | 34,043 | 37,698 | 35,798 |
Bareboat charter revenue was of US\$ 2.4 million in H1 2024, in line with the same period of last year; it relates to the bareboat charter out contract started in October 2021 on one of d'Amico Tankers d.a.c.'s LR1 vessels.
Time charter hire costs. IFRS 16 Leases, effective from 1 January 2019, has been adopted by the Company, significantly changing the treatment of leases in the Group's Consolidated Financial Statements. With some exceptions, liabilities for payments on contracts previously classified as operating leases are now discounted at the lessee's incremental borrowing rate, leading to the recognition of a lease liability and a corresponding right of use asset. Therefore, starting from 1 January 2019, 'time-charter hire costs' includes only time-charter contracts whose residual term is shorter than 12 months as at that date or for contracts starting later, whose duration is shorter than 12 months from their commencement date. The application of IFRS16 reduced 'charter hire costs' by US\$ 14.7 million in H1 2024 and by US\$ 22.0 million in H1 2023, as within the Income Statement, these costs were replaced with other direct operating costs, interest, and depreciation. Excluding the effect of IFRS 16, DIS' 'time-charter hire costs' would have amounted to US\$ (14.7) million in H1 2024 compared with US\$ (22.0) million in the same period of last year. In H1 2024, DIS operated a lower number of chartered-in vessels (5.7 equivalent ships) relative to the first half of last year (7.8 equivalent ships).
Other direct operating costs mainly consist of crew, technical and luboil expenses relating to the operation of owned vessels, together with insurance expenses for both owned and chartered-in vessels. The adjustment to 'other direct operating costs' arising from the application of IFRS 16 increases such expenses by US\$ 6.4 million in H1 2024 (US\$ 9.9 million increase in H1 2023), as within the Income Statement, time-charter hire costs are replaced by other direct operating costs, interest, and depreciation. Excluding the effects of IFRS 16, DIS' 'other direct operating costs' would have amounted to US\$ (38.9) million in H1 2024 vs. US\$ (38.1) million in H1 2023. In H1 2024, the Company operated a larger fleet of owned and bareboat vessels relative to the same period of last year (H1 2024: 28.7 vs. H1 2023: 28.2). DIS constantly monitors its operating costs, while focusing on crew with appropriate skills, high SQE (Safety, Quality & Environment) standards and full compliance with very stringent market regulations. Maintaining a 'top-quality' fleet represents an essential part of d'Amico's vision and strategy.
General and administrative costs amounted to US\$ (11.1) million in H1 2024 vs. US\$ (11.3) million in H1 2023. These costs relate mainly to onshore personnel, together with office costs, consultancies, travel
contract in time-charter equivalent terms. The gross revenue of this bareboat contract is reported under 'bareboat charter revenue' in the Income Statement.
2 Total daily average TCE includes a bareboat charter out contract on an LR1 vessel owned by d'Amico Tankers d.a.c., inclusive of an assumed daily Opex of US\$ 7,504 (in line with DIS' actual costs), in order to express this bareboat contract in time-charter equivalent terms. The gross revenue of this bareboat contract is reported under 'bareboat charter revenue' in the Income Statement.
expenses and others.
Result on disposal of vessel was positive for US\$ 4.6 million in H1 2024 vs. US\$ (3.8) million in same period of last year. The amount for H1 2024 includes a profit of US\$ 5.1 million from the disposal of M/T Glenda Melanie in Q2 2024, partially off-set by the amortisation of the net deferred result on vessels sold and leased back in previous years. The amount for H1 2023 mainly included US\$ (3.1) million negative charge related to the accelerated amortization of the deferred losses on M/T High Freedom, M/T High Trust, M/T High Trader and M/T High Loyalty, whose purchase options were exercised by d'Amico Tankers d.a.c. in the first half of the same year.
EBITDA was of US\$ 161.1 million in H1 2024 compared with US\$ 142.7 million in the same period of last year (Q2 2024: US\$ 85.0 million vs. Q2 2023: US\$ 66.3 million), reflecting the better freight markets experienced in the first six months of the current year.
Depreciation and impairment amounted to US\$ (30.2) million in H1 2024 vs. US\$ (30.5) million in H1 2023 (Q2 2024: US\$ (14.5) million vs. Q2 2023: US\$ (14.7) million). There was no impairment or impairment reversal recorded either in H1 2024 or in H1 2023.
EBIT was of US\$ 131.0 million in H1 2024 compared with US\$ 112.3 million in H1 2023 (Q2 2024: US\$ 70.5 million vs. Q2 2023: US\$ 51.7 million).
Finance income was of US\$ 3.5 million in H1 2024 vs. US\$ 2.4 million in H1 2023 (Q2 2024: US\$ 1.8 million vs. Q2 2023: US\$ 1.2 million). The amounts for H1 2024 comprises mainly interest income on short-term securities and funds held with financial institutions on deposit or current accounts.
Finance charges amounted to US\$ (10.8) million in H1 2024 vs. US\$ (14.2) million in H1 2023 (Q2 2024: US\$ (5.3) million vs. Q2 2023: US\$ (6.8) million). The amount for H1 2024 comprises mainly US\$ (10.5) million in interest expenses and amortized financial fees due on DIS' bank loan facilities, actual expenses on interest rate swaps and interest on lease liabilities, as well as US\$ (0.2) million negative exchange difference and US\$ (0.2) million realized loss on foreign exchange derivative instruments used for hedging purposes. The amount recorded in the same period of last year included mainly US\$ (13.8) million in interest expenses and amortized financial fees due on DIS' bank loan facilities, actual expenses on interest rate swaps and interest on lease liabilities.
DIS recorded a Profit before tax of US\$ 123.7 million in H1 2024 vs. US\$ 100.4 million in H1 2023 and a profit of US\$ 67.0 million in Q2 2024 vs. US\$ 46.0 million in Q2 2023.
Income tax expense amounted to US\$ (0.8) million in H1 2024 vs. US\$ (0.6) million in H1 2023.
In H1 2024, DIS recorded a Net profit of US\$ 122.9 million vs. a Net profit of US\$ 99.8 million achieved in the same period of 2023 and a Net profit of US\$ 66.5 million in Q2 2024 vs. a Net profit of US\$ 45.7 million in Q2 2023. Excluding the result on disposals and non-recurring financial items from H1 2024 (US\$ 4.5 million) and from H1 2023 (US\$ (3.8) million), DIS' Net result would have amounted to US\$ 118.4 million in H1 2024 compared with US\$ 103.6 million recorded in the same period of the previous year.
CASH FLOW AND NET INDEBTEDNESS
In H1 2024, DIS' Net Cash Flow was of US\$ 70.7 million vs. US\$ 5.1 million in H1 2023.
Cash flow from operating activities was positive, amounting to US\$ 155.2 million in H1 2024 vs. US\$ 173.0 million in H1 2023. The variance relative to the same period of last year is mainly attributable to US\$ 34.0 million positive timing effect in working capital achieved in H1 2023.
DIS' Net debt as at 30 June 2024 amounted to US\$ 122.2 million compared to US\$ 224.3 million as at 31 December 2023. Due to the application of IFRS 16 these balances include from 1 January 2019 an additional lease liability amounting to US\$ 14.7 million as at the end of June 2024 vs. US\$ 25.6 million as at the end of 2023. The net debt (excluding the IFRS16 effect) to fleet market value ratio was of 9.1% as at 30 June 2024 vs. 18.0% as at 31 December 2023 (36.0% as at 31 December 2022, 60.4% as at 31 December 2021, 65.9% as at 31 December 2020, 64.0% as at the end of 2019 and 72.9% as at the end of 2018).
SIGNIFICANT EVENTS OF THE FIRST SEMESTER
In H1 2024, the main events for the d'Amico International Shipping Group were the following:
D'AMICO INTERNATIONAL SHIPPING S.A.:
Dividend distribution: In March 2024, the Board of Directors of d'Amico International Shipping proposed to the Shareholders a dividend to be paid in cash of US\$ 30,007,114.24 gross (US\$ 25,506,047.10 net, after deducting the 15% applicable withholding tax), corresponding to US\$ 0.2487 gross per issued and outstanding share (US\$ 0.2114 per issued and outstanding share net of withholding taxes) to be paid out of retained earnings.
Approval of the 2023 statutory and consolidated Financial Statement, the dividend distribution and appointment of the new Board of Directors: In April 2024, the Annual General Shareholders' meeting of d'Amico International Shipping S.A. approved the 2023 statutory and consolidated financial statements of the Company, showing a consolidated net profit of US\$ 192,224,842. The Annual General Shareholders' meeting furthermore resolved the payment of the gross dividend in cash proposed by the Board of Directors. The payment of the above-mentioned dividend was made to the Shareholders on 2 May 2024, with related coupon n. 7 detachment date (ex-date) on 29 April 2024 and record date on 30 April 2024 (no dividend was paid with reference to the 3,453,542 treasury shares held by the Company which do not carry a dividend right). In addition, the Annual General Shareholders' meeting of DIS further resolved to set the number of the members of the Company's Board of Directors at nine (9), to re-elect Mr. Paolo d'Amico, Mr. Cesare d'Amico, Mr. Antonio Carlos Balestra di Mottola, Mrs. Monique Maller, Mr. Marcel Saucy and Mr. Tom Loesch and to appoint Mr. Lorenzo d'Amico, Mrs. Antonia d'Amico and Mr. Massimiliano della Zonca as new members of the Board of Directors, all for a fixed term ending at the Company's annual general meeting of shareholders called to approve the Company's financial statements for the financial year ending on 31 December 2026.
Appointment of Chairman, CEO and CFO: In April 2024, the Board of Directors of d'Amico International Shipping resolved the confirmation of Mr. Paolo d'Amico as Chairman of the Board of Directors, the assignment of the role of Chief Executive Officer to Mr. Antonio Carlos Balestra di Mottola, who was also given the responsibility for the Internal Control and Risk Management System with the attribution of the role of Chief Risk Officer and concurrently attributed the functions of Chief Financial Officer to Mr. Federico Rosen.
Sale of a part of d'Amico International S.A.'s stake in DIS: on May 15, 2024 d'Amico International S.A. ("d'Amico International") announced the successful sale of 6,200,000 shares of d'Amico International Shipping S.A. (the "Company"), representing approximately 5% of its share capital as of that date. The transaction was conducted via a placement by way of an accelerated bookbuilding process reserved to
certain institutional investors (the "Placement"). The Placement was made at a price of €6.50 per share, for an aggregate consideration of €40,300,000. As a result of the Placement, d'Amico International holds approximately 60.66% of the share capital and voting rights of the Company and remains the controlling shareholder of the Company. d'Amico International remains committed to be the leading long-term shareholder in the Company and is a strong believer in the product tanker market. The purpose of the Placement from d'Amico International's perspective was to enhance the trading liquidity in the Company's shares. In connection with the Placement, d'Amico International has agreed to a lock-up commitment with respect to the remaining shares it holds following the settlement and delivery of the Placement for a period ending 180 calendar days after the settlement and delivery of the Placement, subject to certain exceptions. Settlement of the Placement took place on May 20, 2024.
Executed Buy-back program: In June 2024, d'Amico International Shipping S.A. has repurchased n. 105,943 own shares (representing 0.085% of the outstanding share capital of the Company) on the regulated market managed by Borsa Italiana S.p.A. at the average price of Euro 6.3537, for a total consideration of Euro 673,134. As at the end of June 2024, d'Amico International Shipping S.A. holds nr. 3,529,000 own shares, representing 2.84% of its outstanding share capital.
D'AMICO TANKERS D.A.C.:
'Time Charter-Out' Fleet: In January 2024, d'Amico Tankers d.a.c. fixed a time charter-out contract with an oilmajor for one of its handysize vessels for a minimum of 11 months and a maximum of 13 months, starting from February 2024.
In March 2024, d'Amico Tankers d.a.c. fixed a time charter-out contract with a leading trading-house for one of its handysize vessels for a minimum of 9 months and a maximum of 12 months.
In May 2024, d'Amico Tankers d.a.c. fixed a time charter-out contract with a leading trading-house for one of its MR vessels for a period of 6 months.
In June 2024 d'Amico Tankers d.a.c. fixed a time charter-out contract with a leading trading-house for one of its Handysize vessels for a period of three years. In the same month, d'Amico Tankers d.a.c. also fixed one of its MR vessels for a time charter-out contract with a leading refining company for a period of three years.
'Time Charter-In' Fleet: In February 2024, the time-charter-in contract for the M/T High SD Yihe, an MR vessel built in 2005, ended and the vessel was redelivered to her owners.
In April 2024, the time-charter-in contract for the M/T High Prosperity, an MR vessel built in 2006, ended and the vessel was redelivered to her owners.
Sale of Vessels: In March 2024, d'Amico Tankers d.a.c. signed a memorandum of agreement for the sale of the MT Glenda Melanie (the "Vessel"), a 47,162 dwt owned MR product tanker vessel, built in 2010 by Hyundai Mipo, South Korea, for a consideration of US\$ 27.4 million. The vessel was delivered to her new owners in Q2 2024.
Purchase of a second-hand vessel: In April 2024, d'Amico Tankers d.a.c. signed a memorandum of agreement for the purchase of the MT Amfitrion, a 50,000 dwt MR product tanker vessel, built in 2017 by Samsung Heavy Industries Ningbo, China, for a consideration of US\$ 43.5 million. The purchase of MT Amfitrion was subsequently cancelled, as reported under "Subsequent events since the end of the period and business outlook".
Order of four LR1 newbuilding vessels: In April 2024, d'Amico Tankers d.a.c. signed a shipbuilding contract with Jiangsu New Yangzi Shipbuilding Co., China, for the purchase of two (2) new Long Range (LR1 – 75,000 DWT) product tanker vessels at a contract price of US\$ 55.4 million each. These new very efficient vessels are expected to be delivered to d'Amico Tankers d.a.c. in September and November 2027, respectively.
In the same month, d'Amico Tankers d.a.c. signed a shipbuilding contract with Jiangsu New Yangzi Shipbuilding Co., China, for the purchase of two (2) additional new Long Range (LR1 – 75,000 DWT) product tanker vessels at a contract price of US\$ 56.2 million each. These new very efficient vessels are expected to be delivered to d'Amico Tankers d.a.c. in July and December 2027, respectively.
Exercise of a purchase option: In June 2024, d'Amico International Shipping S.A. announced that its operating subsidiary, d'Amico Tankers d.a.c., exercised its purchase option on the M/T Crimson Jade, a 50,000 dwt medium-range product tanker vessel, built in June 2017 by Minaminippon Shipbuilding Co., Ltd., Japan, for a consideration of approximately US\$ 31.0 million with delivery having occurred in July 2024.
SUBSEQUENT EVENTS AND BUSINESS OUTLOOK
D'AMICO TANKERS D.A.C.:
Cancellation of the purchase of a second-hand vessel: In July 2024, d'Amico Tankers d.a.c. has cancelled the memorandum of agreement originally signed on April 9th, 2024, as per the press release issued on April 10th, 2024. The agreement pertained to the purchase of the MT Amfitrion (the "Vessel"), a 50,000 dwt MR product tanker built in 2017. The cancellation results from the Sellers' failure to adhere to the "Cancelling Date" stipulated in the agreement.
| As at 30 June 2024 | As at 01 August 2024 | |||||||
|---|---|---|---|---|---|---|---|---|
| LR1 | MR | Handysize | Total | LR1 | MR | Handysize | Total | |
| Owned | 5 | 14 | 6 | 25 | 5 | 15 | 6 | 26 |
| Bareboat chartered-in* | 1 | 2 | - | 3 | 1 | 2 | - | 3 |
| Long-term time chartered-in | - | 2 | - | 2 | - | 2 | - | 2 |
| Short-term time chartered-in | - | 3 | - | 3 | - | 2 | - | 2 |
| Total | 6 | 21 | 6 | 33 | 6 | 21 | 6 | 33 |
The profile of d'Amico International Shipping's vessels on the water is summarized as follows:
* with purchase obligation
BUSINESS OUTLOOK
The key drivers that should affect the product tankers' freight markets and d'Amico International Shipping's performance are (i) the growth in global oil supply, (ii) refinery margins and throughput, (iii) demand for refined products, (iv) the structure of forward prices for both crude oil and refined petroleum products, (v) the product tankers' fleet growth rate, (vi) the level of inventories in key consuming markets, (vii) the efficiency of the fleet due to factors such as congestion, transshipments and average sailing speeds and (viii) average sailing distances and ballast to laden ratios. Some of the factors that should continue supporting the current strong markets are detailed below:
PRODUCT TANKER DEMAND
- According to the IEA's July 2024 report, global refining throughput is forecast to average 83.4 million b/d this year, approximately 0.9 million b/d higher than the average for 2023. The forecast for 2025 is expected to increase to 84.0 million b/d. Global refinery throughput is anticipated to rebound in Q3 2024 before easing again on renewed maintenance activity in Q4 2024. However, predictions of a robust Atlantic Basin hurricane season highlight the risk of more substantial refinery capacity outages in the second half of the year. US Gulf Coast refiners are particularly vulnerable to storm-related outages, with seasonal hurricane activity potentially impacting global product balances, given the region's significant diesel and gasoline exports.
- According to the IEA's July 2024 report, despite challenging economic conditions, global oil demand is forecast to continue growing rapidly this year, with an expected annual increase of 1.0 million b/d, averaging 103.1 million b/d for the full year. This growth will be entirely driven by non-OECD countries, with developing countries accounting for all this year's gains. In contrast, OECD demand is in structural decline due to factors such as increasing efficiencies and the electrification of the vehicle fleet. While the economic outlook has improved for developed nations, helped by central banks beginning to cut interest rates, the OECD's growth rate will remain subpar and is not expected to surpass 2% in 2024 or 2025 – less than half the pace of non-OECD growth.
- According to Clarksons' June 2024 outlook, demand growth for the seaborne transportation of refined products is expected to be of around 5.3 % this year.
- Ongoing sanctions on Russia and unplanned refinery outages are supporting longer-haul trade patterns for products and European imports of refined products.
- The Houti attacks on vessels in the Red Sea and Gulf of Aden have caused a significant re-routing of ships around the Cape of Good Hope, providing notable support to the ton-mile demand for product tankers.
- Longer-term, recovering demand and structural shifts in the location of refineries are likely to continue boosting long-haul product trades.
PRODUCT TANKER SUPPLY
- Trading inefficiencies, as transshipments of cargoes and ballast to laden ratios increased, have been one of the factors reducing fleet productivity and contributing to the strong freight markets since the start of the war in Ukraine.
- In their June 2024 outlook, Clarksons estimated the product tanker fleet will grow by only 1.8% in 2024.
- Ordering of new ships has started and there have been 87 Ships ordered in the MR and LR1 sectors. However, due to reduced yard capacity / availability they will only be delivered in 2026-2027.
- The strong freight markets have led to continued subdued scraping in 2024, with only 1 vessel in the MR and LR1 sector demolished during the period.
- Due to the limited demolitions over the last few years, the product tanker fleet has been aging rapidly with 13.5% of the MRs and LR1s currently trading already 20 or more years old.
- The IMO's 2030 and 2050 targets for reducing greenhouse gas emissions are high on the shipping agenda. Many owners and banks now require 'green recycling' of vessels in line with EU and IMO conventions, while the EU included shipping in its Emissions Trading Scheme from January 2024. Furthermore, important cargo charterers including oil majors such as Shell and Total, as well as leading trading houses such as Trafigura, have recently signed the Sea Cargo Charter with the aim of disclosing the CO2 emissions of the vessels they operate and reducing these in line with the IMO targets. From January 2023, operators are required to measure their vessels' energy efficiency existing ship index (EEXI), reflecting their technical efficiency and their carbon intensity indicator (CII), assessing how efficiently they are managed. Both measures aim to cut emissions progressively from 2023 to 2030. The expected technological change required to meet the increasingly demanding environmental regulations is reducing the appetite for new building orders. Furthermore, the increase in new building costs and decrease in yard availability is also negatively affecting the appetite for new orders.
FILING AND STORAGE OF THE HALF-YEAR REPORT 2024
The integral version of the Half-Yearly 2024 Financial Report of the Company as of 30 June 2024, as approved on 1 August 2024 by the Board of Directors, is available to the public at DIS registered office and on the Investor Relations section of its website (https://investorrelations.damicointernationalshipping.com/en).
The above-mentioned document has been also filed with Commissione Nazionale per le Società e la Borsa (CONSOB) and Commission de Surveillance du Secteur Financier (CSSF), disseminated and stored at Borsa Italiana S.p.A. (www.borsaitaliana.it) through the e-market SDIR/STORAGE circuit and at Société de la Bourse de Luxembourg S.A. (www.bourse.lu) in its quality of DIS Officially Appointed Mechanism (OAM). From today also this press release is available on the Investor Relations section of the Company's website, disclosed through the e-market SDIR circuit, filed with Commission de Surveillance du Secteur Financier (CSSF) and stored at Borsa Italiana S.p.A. through the e-market STORAGE system and at Société de la Bourse de Luxembourg S.A. in its quality of OAM.
CONFERENCE CALL
At 2.00pm CET, 8.00am EST today a conference call will be held with the financial community during which the Group's economic and financial results will be discussed. It is possible to participate in webcall clicking on the following link: https://www.c-meeting.com/web3/join/3BHH8EBJTPZ9WE or dialing-in one of the following numbers: Italy: + 39 02 8020911 / UK: + 44 1 212818004/ USA: +1 718 7058796.
The presentation slides can be downloaded before the conference call from the Investor Relations page on DIS web site: www.damicointernationalshipping.com
The half-yearly and second quarter 2024 financial report has been prepared in accordance with provisions of Art. 4 of the Luxembourg Law dated 11 January 2008, as amended and supplemented on December 2016, which transposed Directive 2004/109/EC of the European Parliament and of the Council of 15 December 2004 on the harmonization of transparency requirements in relation to information about issuers whose securities are admitted to trading on a regulated market.
d'Amico International Shipping S.A. is a subsidiary of d'Amico Società di Navigazione S.p.A., one of the world's leading privately-o wn ed marine transportation companies, and operates in the product tankers sector, comprising vessels that typically carry refined petroleum products, chemical and vegetable oils. d'Amico International Shipping S.A. controls, through its fully-owned subsidiary namely d'Amico Tankers D.A.C., Dublin, either through ownership or charter arrangements, a modern and double-hulled fleet, ranging from 35,000 to 75,000 deadweight tons. The Company has a long history of family enterprise and a worldwide presence with offices in key maritime centers (London, Dublin, Monaco, Stamford and Singapore). The Company's shares are listed on the Milan Stock Exchange under the ticker symbol "DIS.MI".
d'Amico International Shipping S.A Anna Franchin - Investor Relations Manager Tel: +35 2 2626292901 Tel: +37 7 93105472 E-mail: [email protected]
Capital Link
New York - Tel. +1 (212) 661-7566 London - Tel. +44 (0) 20 7614-2950 E-Mail: [email protected]
Media Relations
Havas PR Milan Marco Fusco Tel.: +39 02 85457029 – Mob.: +39 345.6538145 E-Mail: [email protected] Antonio Buozzi Tel.: +39 320.0624418 E-Mail: [email protected]
APPENDIX
CONDENSED CONSOLIDATED INTERIM STATEMENT OF PROFIT OR LOSS
| Q2 2024 | Q2 2023 | H1 2024 | H1 2023 | |
|---|---|---|---|---|
| UNREVIEWED | UNREVIEWED | US\$ Thousand | ||
| 137,104 | 130,599 | Revenue | 269,265 | 270,832 |
| (30,628) | (33,371) | Voyage costs | (58,724) | (67,338) |
| 106,476 | 97,228 | Time charter equivalent earnings* | 210,541 | 203,494 |
| 1,215 | 1,215 | Bareboat charter revenue * | 2,430 | 2,412 |
| 107,691 | 98,443 | Total net revenue | 212,971 | 205,906 |
| - | - | Time charter hire costs | - | (27) |
| (21,704) | (23,561) | Other direct operating costs | (45,370) | (47,988) |
| (5,827) | (7,096) | General and administrative costs | (11,068) | (11,316) |
| 4,862 | (1,447) | Result from disposal of fixed assets | 4,593 | (3,826) |
| 85,022 | 66,339 | EBITDA* | 161,126 | 142,749 |
| (14,495) | (14,682) | Depreciation and impairment | (30,157) | (30,489) |
| 70,527 | 51,657 | EBIT* | 130,969 | 112,260 |
| 1,764 | 1,208 | Finance income | 3,500 | 2,378 |
| (5,314) | (6,828) | Finance charges | (10,787) | (14,208) |
| 66,977 | 46,037 | Profit before tax | 123,682 | 100,430 |
| (434) | (320) | Income tax expense | (799) | (597) |
| 66,543 | 45,717 | Profit for the period | 122,883 | 99,833 |
| The net result is entirely attributable to the equity holders of the Company | ||||
| 0.552 | 0.37 | Basic and diluted earnings per share in US\$ | 1.018 | 0.82 |
*see Alternative Performance Measures
CONDENSED CONSOLIDATED INTERIM STATEMENT OF COMPREHENSIVE INCOME
| Q2 2024 | Q2 2023 | H1 2024 | H1 2023 | |
|---|---|---|---|---|
| UNREVIEWED | UNREVIEWED | US\$ Thousand | ||
| 66,543 | 45,717 | Profit for the period | 122,883 | 99,833 |
| Items that can subsequently be reclassified into Profit or Loss | ||||
| (568) | (229) | Cash flow hedges – changes in fair value | (480) | (2,598) |
| (6) | 20 | Exchange differences in translating foreign operations | (76) | 838 |
| (574) | (209) | Other comprehensive income for the period, net of income tax | (556) | (1,760) |
| 65,969 | 45,508 | Total comprehensive income for the period | 122,327 | 98,073 |
The net result is entirely attributable to the equity holders of the Company.
CONDENSED CONSOLIDATED INTERIM STATEMENT OF FINANCIAL POSITION
| As at | As at | |
|---|---|---|
| US\$ Thousand | 30 June 2024 | 31 December 2023 |
| ASSETS | ||
| Property, plant and equipment and Right-of-use assets | 790,667 | 794,259 |
| Other non-current financial assets | 1,767 | 2,434 |
| Total non-current assets | 792,434 | 796,693 |
| Inventories | 13,572 | 13,727 |
| Receivables and other current assets | 62,680 | 75,674 |
| Other current financial assets | 4,438 | 4,459 |
| Cash and cash equivalents | 181,886 | 111,154 |
| Total current assets | 262,576 | 205,014 |
| TOTAL ASSETS | 1,055,010 | 1,001,707 |
| SHAREHOLDERS' EQUITY AND LIABILITIES | ||
| Share capital | 62,053 | 62,053 |
| Retained earnings | 336,396 | 246,054 |
| Share Premium | 326,658 | 326,658 |
| Other reserves | (15,398) | (16,959) |
| Shareholders' equity | 709,709 | 617,806 |
| Banks and other lenders | 192,174 | 214,738 |
| Non-current lease liabilities | 66,385 | 73,193 |
| Other non-current financial liabilities | 2,565 | 2,736 |
| Total non-current liabilities | 261,124 | 290,667 |
| Banks and other lenders | 32,643 | 28,699 |
| Current lease liabilities | 13,650 | 20,215 |
| Payables and other current liabilities | 34,164 | 41,390 |
| Other current financial liabilities | 2,920 | 2,810 |
| Current tax payable | 800 | 120 |
| Total current liabilities | 84,177 | 93,234 |
| TOTAL SHAREHOLDERS' EQUITY AND LIABILITIES | 1,055,010 | 1,001,707 |
CONDENSED CONSOLIDATED INTERIM STATEMENT OF CASH FLOWS
| Q2 2024 UNREVIEWED |
Q2 2023 UNREVIEWED |
US\$ Thousand | H1 2024 | H1 2023 |
|---|---|---|---|---|
| 66,543 | 45,717 | Profit for the period | 122,883 | 99,833 |
| 14,495 | 14,682 | Depreciation and amortisation | 30,157 | 30,489 |
| 434 | 320 | Current and deferred income tax | 799 | 597 |
| 1,182 | 2,547 | Lease cost | 2,467 | 5,463 |
| 2,367 | 3,073 | Other net financial cost (income) | 4,819 | 6,367 |
| (4,862) | 1,448 | Result from disposal of fixed assets | (4,593) | 3,826 |
| - | - | Unrealised foreign exchange result | - | (11) |
| (5) | 7 | Other non-cash changes | (75) | 838 |
| 146 | 183 | Share-based allotment and accruals LTI Plan | 304 | 211 |
| 80,300 | 67,977 | Cash flow from operating activities before changes in working capital | 156,761 | 147,613 |
| (345) | (1,171) | Movement in inventories | 155 | 3,641 |
| 4,932 | 20,110 | Movement in amounts receivable | 13,375 | 34,051 |
| (3,141) | (10,238) | Movement in amounts payable | (7,888) | (3,650) |
| (82) | (82) | Tax paid | (119) | (87) |
| (1,182) | (2,547) | Payment of interest portion of lease liability | (2,467) | (5,463) |
| (2,191) | (278) | Net interest paid | (4,598) | (3,127) |
| 78,291 | 73,771 | Net cash flow from operating activities | 155,219 | 172,978 |
| (46,395) | (30,737) | Acquisition of fixed assets and dry-dock expenditures | (51,268) | (35,564) |
| 26,926 | - | Proceeds from disposal of fixed assets | 26,926 | - |
| (19,469) | (30,737) | Net cash flow from investing activities | (24,342) | (35,564) |
| - | (35) | Other changes in shareholder's equity | - | (35) |
| (721) | (774) | Purchase of Treasury shares | (721) | (774) |
| (30,007) | (22,012) | Dividends | (30,007) | (22,012) |
| (43,635) | (31,035) | Bank loan repayments | (50,951) | (49,100) |
| 32,000 | 17,750 | Bank loans drawdowns | 32,000 | 17,750 |
| (4,633) | (48,798) | Repayments of principal portion of lease liabilities | (10,466) | (78,180) |
| (46,996) | (84,904) | Net cash flow from financing activities | (60,145) | (132,351) |
| 11,826 | (41,870) | Net increase (decrease) in cash and cash equivalents | 70,732 | 5,063 |
| 170,060 | 155,171 | Cash and cash equivalents at the beginning of the period | 111,154 | 108,238 |
| 181,886 | 113,301 | Cash and cash equivalents at the end of the period | 181,886 | 113,301 |
The manager responsible for preparing the company's financial reports, Mr Federico Rosen, in his capacity of Chief Financial Officer of d'Amico International Shipping SA (the "Company"), declares that the accounting information contained in this document corresponds to the results documented in the books, accounting and other records of the Company.
____________________ Federico Rosen Chief Financial Officer
ALTERNATIVE PERFORMANCE MEASURES (APM)
Along with the most directly comparable IFRS measures, DIS' management regularly uses Alternative Performance Measures, as they provide helpful additional information for readers of its financial statements, indicating how the business has performed over the period, filling the gaps left by the reporting standards. APMs are financial and non-financial measures of historical or future financial performance, financial position or cash-flows, other than a financial measure defined or specified in the Group's applicable financial reporting framework and International Financial Reporting Standards (IFRS); for this reason they might not be comparable to similarly titled measures used by other companies and are not measurements under IFRS or GAAP and thus should not be considered substitutes for the information contained in the Group's financial statements. The following section sets out the Group's definitions of used APMs:
FINANCIAL APMs (They are based on or derived from figures of the condensed consolidated interim financial statements)
Time charter equivalent earnings
A shipping industry standard allowing the comparison of period-to-period net freight revenues, which are not influenced by whether the vessels were employed on Time charters (TC), Voyage charters or Contracts of affreightment (please see Non-Financial APM definitions below). As indicated in the condensed consolidated interim statement of Profit or Loss, it is equal to revenues less voyage costs.
Bareboat charter revenue
Revenues originating from contracts under which the ship owner is usually paid monthly in advance charter hire at an agreed daily rate for a specified period of time, during which, the charterer is responsible for the technical management of the vessel, including crewing, and therefore also for its operating expenses (see further in Other definitions).
EBITDA and EBITDA Margin
EBITDA is defined as the result for the period before the impact of taxes, interest, the Group's share of the result of joint ventures and associates – if any, depreciation, and amortization. It is equivalent to the gross operating profit, which indicates the Group's revenues from sales less its cost of the services (transport) sold. EBITDA Margin is defined as EBITDA divided by Time charter equivalent earnings (as described above). DIS believes that EBITDA and EBITDA Margin are useful additional indicators investors can use to evaluate the Group's operating performance.
EBIT and EBIT Margin
EBIT is defined as the result for the period before the impact of tax, interest, and the Group's share of the result of joint ventures and associates – if any. It is equivalent to the net operating profit and the Group uses it to monitor its return after operating expenses and the cost of the use of its tangible assets. EBIT Margin is defined as operating profit as a percentage of Time charter equivalent earnings and represents for DIS a suitable measure to show the contribution of the Time-Charter Earnings in covering both fixed and variable costs.
ROCE
Return on Capital Employed is a profitability ratio which measures how efficiently a company is using its capital. It is calculated dividing the EBIT by the capital employed, that is, by total assets less current liabilities.
Gross CAPEX
Gross capital expenditure, that is the expenditure for the acquisition of fixed assets as well as expenditures capitalised as a result of the intermediate or special surveys of our vessels, or of investments for the improvement of DIS vessels, as indicated under Net acquisition of fixed assets within the cash-flow from investing activities; it gives an indication about the strategic planning (expansion) of the Group (capital intensive industry).
Net Indebtedness
Comprises bank loans and other financial liabilities, less cash and cash equivalents and liquid financial assets or short-term investments available to service those debt items. The Group believes net indebtedness is relevant to investors as it is a metric on the overall debt situation of a company, indicating the absolute level of non-equity funding of the business. The relevant table in the net indebtedness section within the report on operations, reconciles net debt to the pertinent balance sheet line items.
IFRS 16 impact
The standard eliminates the classification of leases as either operating leases or finance leases for a lessee; instead, all leases are treated in a similar way to finance leases applying IAS 17. Leases are "capitalised" by recognising the present value of lease payments and showing them either as leased assets (right-of-use assets, RoU) or together with property, plant, and equipment (PPE). Lease items of low value (under US\$ 5 thousand) or for which the lease duration is shorter than one year are excluded from this treatment and are expensed as incurred. If lease payments are made over time, the company also recognises a financial liability representing its obligation to make future lease payments. The most significant effect is an increase in lease assets (or PPE) and financial liabilities, leading to changes in key financial metrics derived from balance sheet data.
For companies with material off-balance sheet leases, IFRS 16 changes the nature of the expenses related to those leases: the straight-line operating lease expenses (time-charter-in) are replaced with a depreciation charge for the lease asset (included within operating costs) and an interest expense on the lease liability (included within finance costs).
NON-FINANCIAL APMs (not derived from figures of the condensed consolidated interim financial statements)
Available vessel days
Total theoretical number of days a vessel is available for sailing during a period. It provides an indication of the Group's fleet earnings potential during a period, which takes into account the date of delivery to and redelivery from the Group of the vessels in its fleet (please refer also to the Key figures, other operating measures).
Coverage
Ratio indicating how many available vessel days are already covered by fixed rate contracts (time charter contracts or contracts of affreightment). It provides an indication of how exposed the Group is to changes in the freight market during a certain period (please refer to Time charter equivalent earnings in the Summary of the results in the second quarter and first half of 2024).
Daily spot rate or daily TC rate
Daily spot rate refers to daily time-charter equivalent earnings (please refer to definition below) generated by employing DIS' vessels on the spot market (or on a voyage basis) and daily TC rate refers to daily timecharter earnings generated by employing DIS' vessels on 'time-charter' contracts (please refer to the Summary of the results in the second quarter and first half of 2024).
Off-hire
Means the period in which a vessel is unable to perform the services for which it is immediately required under a time charter. Off-hire periods can include days spent on repairs, dry-docking and surveys, whether or not scheduled. It can help to explain changes in time-charter equivalent earnings between different periods (please refer to Revenues, in the Summary of the results in the second quarter and first half of 2024).
Time charter equivalent earnings per day
A measure of the average daily revenue performance of a vessel or of DIS' fleet. DIS' method of calculating time charter equivalent earnings per day is consistent with industry standards and is determined by dividing voyage revenues (net of voyage expenses) by on-hire days for the relevant time period. Time charter equivalent earnings per day is a standard shipping industry performance measure used primarily to compare period-to-period changes in a shipping company's performance, since it is unaffected by the changes in the mix of charter contracts (i.e. spot charters, time charters and contracts of affreightment) through which the vessels are employed. It allows a comparison of the Group's performance with industry peers and market benchmarks (please refer to Key figures).
Vessels equivalent
The number of vessels equivalent in a period is equal to the sum of the products of the total available vessel days over that period for each vessel and the participation of the Group (direct or indirect) in that vessel, divided by the number of calendar days in that period. It provides an indication of the Group's fleet size and earnings potential over a period (please refer to Key figures).
OTHER DEFINITIONS
Bareboat charter
A contract type under which the ship owner is usually paid monthly in advance charter hire at an agreed daily rate for a specified period of time, during which the charterer is responsible for the technical management of the vessel, including crewing, and therefore also for its operating expenses (please refer to note 6). A bareboat charter is also known as a "demise charter" or a "time charter by demise".
Charter
A contract for the hire of a vessel for a specified period of time or to carry cargo from a loading port to a discharging port. The contract for a charter is commonly called a charter party and there are three main types of such contracts, a bareboat charter party, a voyage charter party and time charter party (refer to definitions in this section).
Contract of affreightment (COA)
An agreement between an owner and a charterer which obliges the owner to provide a vessel to the charterer to move specific quantities of cargo, at a fixed rate, over a stated time period but without designating specific vessels or voyage schedules, thereby providing the owner with greater operating flexibility than with voyage charters alone.
Disponent Owner
The company that controls a vessel, replacing the registered owner, either through a time-charter or a bareboat charter.
Fixed-rate contracts
For DIS these usually refer to revenues generated through time-charter contracts or contracts of affreightment (please refer to definitions in this section). Bareboat charter contracts are also usually fixed rate contracts but DIS controls rather than employs vessels through such contracts.
Spot charter or Voyage charter
A contract type through which a registered owner (owner) or disponent owner (please refer to definition in this section) is paid freight for transporting cargo from a loading port to a discharging port. The charterer pays the vessel owner or disponent owner on a per-ton or lump-sum basis. The payment for the use of the vessel is known as freight. The owner or disponent owner is responsible for paying voyage expenses. Typically, the charterer is responsible for any delay at the loading or discharging ports. A ship-owner or bareboat charterer operating its vessel on voyage charter is responsible for the technical management of the vessel, including crewing, and therefore also for its operating expenses.
Time charter
Is a contract type through which the registered owner (owner) or disponent owner (please refer to definition within this section) is paid usually monthly in advance charter hire at an agreed daily rate for a specified period of time (usually a fixed rate contract). With such contracts the charterer is responsible for paying the voyage expenses and additional voyage insurance. A ship-owner or bareboat charterer operating its vessel on time-charter is responsible for the technical management of the vessel, including crewing, and therefore also for its operating expenses.