Quarterly Report • Nov 9, 2023
Quarterly Report
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This document is available on www.damicointernationalshipping.com
d'Amico International Shipping S.A.
Registered office at 25C Boulevard Royal, Luxembourg Share capital US\$ 62,053,278.45 as at 30 September 2023
| BOARD OF DIRECTORS AND CONTROL BODIES 3 |
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|---|---|
| KEY FIGURES 4 |
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| CONSOLIDATED INTERIM MANAGEMENT REPORT 5 |
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| GROUP STRUCTURE 5 | |
| ALTERNATIVE PERFORMANCE MEASURES (APM) 9 | |
| SUMMARY OF THE RESULTS IN THE THIRD QUARTER AND NINE MONTHS OF 2023 12 | |
| SIGNIFICANT EVENTS OF THE FIRST NINE MONTHS 19 | |
| SIGNIFICANT EVENTS SINCE THE END OF THE PERIOD AND BUSINESS OUTLOOK 22 | |
| D'AMICO INTERNATIONAL SHIPPING GROUP CONSOLIDATED INTERIM FINANCIAL |
REPORT AS |
| AT 30 SEPTEMBER 2023 24 |
|
| CONDENSED CONSOLIDATED INTERIM INCOME STATEMENT 24 | |
| CONDENSED CONSOLIDATED INTERIM STATEMENT OF COMPREHENSIVE INCOME 24 | |
| CONDENSED CONSOLIDATED INTERIM STATEMENT OF FINANCIAL POSITION 25 | |
| CONDENSED CONSOLIDATED INTERIM STATEMENT OF CASH FLOWS 26 | |
| INTERIM CONDENSED STATEMENT OF CHANGES IN CONSOLIDATED SHAREHOLDERS' EQUITY 27 |
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| NOTES………………. 28 |
Chairman, Chief Executive Officer Paolo d'Amico
Directors Antonio Carlos Balestra di Mottola, Chief Financial Officer Cesare d'Amico – Executive Director Marcel C. Saucy – Non-executive, Lead Independent Director Tom Loesch – Non-executive, Independent Director Monique I.A. Maller – Non-executive, Independent Director
MOORE Audit S.A.
| Q3 2023 | Q3 2022 | US\$ Thousand | 9 MONTHS 2023 |
9 MONTHS 2022 |
|---|---|---|---|---|
| 99,529 | 95,386 Total net revenue | 305,435 | 213,379 | |
| 70,397 | 69,072 EBITDA * | 213,146 | 135,315 | |
| 70.7% | 72.4% | as % of margin on Total net revenues | 69.8% | 63.4% |
| 54,528 | 54,235 EBIT * | 166,788 | 87,950 | |
| 54.8% | 56.9% | as % of margin on Total net revenues | 54.6% | 41.2% |
| 48,886 | 43,558 Net profit | 148,719 | 62,776 | |
| 49.1% | 45.7% | as % of margin on Total net revenues | 48.7% | 29.4% |
| 49,394 | 46,664 Adjusted Net profit** | 153,005 | 69,314 | |
| US\$ 0.402 | US\$ 0.356 Earnings (loss) per share | US\$ 1.219 | US\$ 0.513 | |
| 51,391 | 61,479 Operating cash flow | 224,369 | 80,461 | |
| (1,892) | (3) Gross CAPEX* | (37,456) | (897) | |
| As at 30 September 2023 |
As at 31 December 2022 |
|||
| Total assets | 1,010,617 | 1,054,885 | ||
| Net financial indebtedness* | 264,594 | 409,850 | ||
| Shareholders' equity | 596,107 | 478,414 |
* See Alternative Performance Measures on page 9;
** Excluding results on disposal and non-recurring financial items – please refer also to the summary of financial results for the first 9 months of 2023.
| Q3 2023 | Q3 2022 | 9 MONTHS 2023 |
9 MONTHS 2022 |
|
|---|---|---|---|---|
| 30,860 | 30,230 Daily operating measures - TCE earnings per employment day (US\$)1 |
31,904 | 22,421 | |
| 36.0 | 35.3 Fleet development - Total vessel equivalent | 36.0 | 35.6 | |
| 25.7 | 17.7 - Owned | 22.8 | 17.7 | |
| 3.3 | 8.0 - Bareboat chartered | 5.7 | 8.0 | |
| 7.0 | 9.7 - Time chartered | 7.5 | 9.9 | |
| 2.0% | 2.3% Off-hire days/ available vessel days2 (%) | 2.0% | 1.3% | |
| 31.2% | 32.0% Fixed rate contract/ available vessel days3 (coverage %) |
27.9% | 38.8% |
*see Alternative Performance Measures on page 9;
1 This figure represents time charter ("TC") equivalent earnings for vessels employed on the spot market and time charter contracts, net of commissions. Please refer to the Alternative Performance Measures included further on in this report.
2 This figure is equal to the ratio between the total off-hire days, inclusive of dry-docks, and the total number of available vessel days.
3 Fixed rate contract days/available vessel days (coverage ratio): this figure represents the proportion of available vessel days, including offhire days, employed on time charter contracts.
Set out below is d'Amico International Shipping Group's structure as at 30 September 2023:
d'Amico International Shipping S.A. (individually the "Company" or "d'Amico International Shipping", and when together with its subsidiaries "DIS", "DIS Group" or "the Group") is an international marine transportation company, part of the d'Amico Società di Navigazione SpA group (the "d'Amico Group"), which traces its origins to 1936. As at 30 September 2023, d'Amico International Shipping controls through d'Amico Tankers d.a.c. (Ireland), its fully owned subsidiary, a fleet of 36.0 vessels, of which 29.0 owned and bareboat vessels (with purchase obligations), with an average age of approximately 8.3 years, compared to an average in the product tankers industry of 12.6 years for MRs (25,000 – 54,999 dwt) and 13.7 for LR1s (55,000 – 84,999 dwt). All DIS' vessels are double-hulled and are primarily engaged in the transportation of refined oil products, providing worldwide shipping services to the major oil companies and trading houses. All the vessels are compliant with IMO (International Maritime Organization) regulations, including MARPOL (the International Convention for the Prevention of Pollution from Ships), with the requirements of oil-majors and energy-related companies and other relevant international standards. Based on MARPOL/IMO rules, cargoes such as palm oil, vegetable oil and other chemicals can only be transported by vessels that meet certain requirements (IMO Classed). As at 30 September 2023, 77.8% of DIS' controlled fleet was IMO Classed, allowing the Group to transport a large range of products.
DIS' business purpose is to operate, through its main subsidiary d'Amico Tankers d.a.c., a fleet of owned and chartered-in vessels, engaged in the transportation of refined petroleum products and vegetable oils.
DIS Group's revenue, amounting to US\$ 407.8 million in the first 9 months of 2023 (+30.8% relative to the first 9 months of 2022) (please refer to DIS' Consolidated financial statements as at 31 December 2022), is mainly generated from the employment, either directly or through its partnerships, of the vessels of its fleet under spot contracts and time charters, for the marine transportation of refined petroleum products. Vessels operating under fixed rate contracts, including time charters, usually provide more steady and predictable cash flows than vessels operating on the spot market. Spot contracts offer the opportunity to maximise DIS Group's revenue during periods of increasing market rates, although they may result in lower earnings than time charters during periods of decreasing rates. This employment mix varies according to prevailing and forecasted market conditions. Gains or losses can also arise from the sale of the vessels in DIS Group's fleet.
DIS Group believes that it benefits from a strong brand name and an established reputation in the international market due to its long operating history and that such a reputation is important in maintaining and strengthening long-term relationships with its partners and existing customers and in developing relationships with new customers. Its partners and customers appreciate the transparency and accountability, which have been priorities for the DIS Group from its early days. Accountability, transparency, and a focus on quality are pillars of its operations and key to DIS Group's success.
The quality of DIS Group's fleet is preserved through scheduled maintenance programmes, by aiming for exacting standards on owned vessels and by chartering-in vessels from owners who meet high-quality standards.
DIS has a presence in Luxembourg, Dublin (Ireland), London (U.K.), Monte Carlo (Monaco), Singapore, New York (USA) and Rome (Italy). These offices are located in the key maritime centres around the world. DIS provides transportation services employing all its vessels worldwide, rather than in specific geographical areas. DIS believes that its international presence allows it to meet the needs of its international clients in different geographical areas, strengthening the Company's recognition and its brand name worldwide. In addition, through the different opening hours of offices located in several time zones, DIS can continuously monitor its operations and assist its customers.
As at 30 September 2023, DIS employed 628 seagoing personnel and 24 onshore personnel. In addition, through related party contracts, DIS benefits from the services of employees of the d'Amico Group working in the administrative, chartering, operations, sale and purchase and technical departments of d'Amico Shipping Singapore, d'Amico Shipping USA, d'Amico Società di Navigazione SpA, Rudder SAM and d'Amico Shipping UK.
The DIS Group controlled as at 30 September 2023, either through ownership or charter arrangements, a modern fleet of 36.0 product tankers (31 December 2022: 36.0 product tankers). DIS Group's product tanker vessels range from approximately 36,000 to 75,000 dwt.
Since 2012, the DIS Group has ordered 22 newbuildings, the last of which was delivered in October 2019. All these newbuildings are fuel-efficient and in compliance with recent environmental legislation. They cater therefore to the high standards required by the Group's oil major customers, in addition to being highly cost effective.
Operating a large fleet enhances the generation of earnings and operating efficiencies. A large fleet strengthens the Group's ability to advantageously position vessels and improves the fleet's availability and scheduling flexibility, providing DIS with a competitive advantage in securing spot voyages. In particular, the scale of DIS' operations provides it with the flexibility necessary to enable it to capitalise on favourable spot market conditions to maximise earnings and negotiate favourable contracts with suppliers.
The following table sets forth information about DIS' fleet on the water as at 30 September 2023.
| Name of vessel | Dwt | Year built | Builder, Country4 | IMO classed |
|---|---|---|---|---|
| LR1 fleet | ||||
| Owned | ||||
| Bright Future5 | 75,000 | 2019 | Hyundai Mipo, South Korea (Vinashin, Vietnam) | - |
| Cielo di Cagliari | 75,000 | 2018 | Hyundai Mipo, South Korea (Vinashin, Vietnam) | - |
| Cielo Rosso | 75,000 | 2018 | Hyundai Mipo, South Korea (Vinashin, Vietnam) | - |
| Cielo di Rotterdam | 75,000 | 2018 | Hyundai Mipo, South Korea (Vinashin, Vietnam) | - |
| Cielo Bianco | 75,000 | 2017 | Hyundai Mipo, South Korea (Vinashin, Vietnam) | - |
| Bareboat with purchase options and purchase obligation | ||||
| Cielo di Houston | 75,000 | 2019 | Hyundai Mipo, South Korea (Vinashin, Vietnam) | - |
| MR fleet | ||||
| Owned | ||||
| High Explorer | 50,000 | 2018 | Onomichi, Japan | IMO II/III |
| High Adventurer | 50,000 | 2017 | Onomichi, Japan | IMO II/III |
| High Challenge | 50,000 | 2017 | Hyundai Mipo, South Korea (Vinashin, Vietnam) | IMO II/III |
| High Wind | 50,000 | 2016 | Hyundai Mipo, South Korea (Vinashin, Vietnam) | IMO II/III |
| High Trust | 49,990 | 2016 | Hyundai Mipo, South Korea (Vinashin, Vietnam) | IMO II/III |
| High Trader | 49,990 | 2015 | Hyundai Mipo, South Korea (Vinashin, Vietnam) | IMO II/III |
| High Loyalty | 49,990 | 2015 | Hyundai Mipo, South Korea | IMO II/III |
| High Voyager | 45,999 | 2014 | Hyundai Mipo, South Korea | IMO II/III |
| High Freedom | 49,990 | 2014 | Hyundai Mipo, South Korea | IMO II/III |
| High Tide | 51,768 | 2012 | Hyundai Mipo, South Korea | IMO II/III |
| High Seas | 51,678 | 2012 | Hyundai Mipo, South Korea | IMO II/III |
| GLENDA Melissa | 47,203 | 2011 | Hyundai Mipo, South Korea | IMO III |
| GLENDA Meryl | 47,251 | 2011 | Hyundai Mipo, South Korea | IMO III |
| GLENDA Melody | 47,238 | 2011 | Hyundai Mipo, South Korea | IMO III |
| GLENDA Melanie | 47,162 | 2010 | Hyundai Mipo, South Korea | IMO III |
| Bareboat with purchase options and purchase obligations | ||||
| High Discovery | 50,036 | 2014 | Hyundai Mipo, South Korea | IMO II/III |
| High Fidelity | 49,990 | 2014 | Hyundai Mipo, South Korea (Vinashin, Vietnam) | IMO II/III |
| TC-in long-term with purchase options | ||||
| High Leader | 50,000 | 2018 | Japan Marine, Japan | IMO II/III |
| High Navigator | 50,000 | 2018 | Japan Marine, Japan | IMO II/III |
4 Hyundai Mipo, South Korea (Vinashin, Vietnam) refers to vessels ordered at Hyundai Mipo and built at their Vinashin (Vietnam) facility. 5Ex-Cielo di Londra.
| Crimson Pearl | 50,000 | 2017 | Minaminippon Shipbuilding, Japan | IMO II/III |
|---|---|---|---|---|
| Crimson Jade | 50,000 | 2017 | Minaminippon Shipbuilding, Japan | IMO II/III |
| TC-in long-term without purchase options | ||||
| Green Planet | 50,843 | 2014 | Daesun Shipbuilding, South Korea | IMO II/III |
| High Prosperity | 48,711 | 2006 | Imabari, Japan | - |
| High SD Yihe | 48,700 | 2005 | Imabari, Japan | - |
| Handy-size fleet | ||||
| Owned | ||||
| Cielo di Salerno | 39,043 | 2016 | Hyundai Mipo, South Korea (Vinashin, Vietnam) | IMO |
| Cielo di Hanoi | 39,043 | 2016 | Hyundai Mipo, South Korea (Vinashin, Vietnam) | IMO |
| Cielo di Capri | 39,043 | 2016 | Hyundai Mipo, South Korea (Vinashin, Vietnam) | IMO |
| Cielo di Ulsan | 39,060 | 2015 | Hyundai Mipo, South Korea (Vinashin, Vietnam) | IMO |
| Cielo di New York | 39,990 | 2014 | Hyundai Mipo, South Korea | IMO |
| Cielo di Gaeta | 39,990 | 2014 | Hyundai Mipo, South Korea | IMO |
As at 30 September 2023, DIS directly employed 36.0 Vessels: 3 LR1s ('Long Range 1'), 7 MRs ('Medium Range') and 2 Handy-size vessels on term contracts at fixed rates, whilst 3 LR, 17 MR and 4 Handy-size vessels were at the same date employed on the spot market.
d'Amico International Shipping is part of the d'Amico Group, one of the world's leading privately-owned marine transportation companies, with over 80 years of experience in the shipping business, whose ultimate parent company is d'Amico Società di Navigazione S.p.A. (Italy). As at 30 September 2023, the d'Amico Group controlled a wide fleet of owned and chartered-in vessels, of which 36.0 were part of the DIS fleet, operating in the product tanker market. d'Amico International Shipping also benefits from the expertise of the d'Amico Group, which provides technical management services, including crewing and insurance arrangements, as well as safety, quality and environmental services for DIS' vessels.
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 nonfinancial 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 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:
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 Profit and Loss financial statement, it is equal to revenues less voyage costs.
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 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, 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 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. 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.
Return on Capital Employed is a profitability ratio which measures how efficiently a company is using its capital. It is calculated by dividing the EBIT by the capital employed, that is, by total assets less current liabilities.
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).
Comprises bank loans and other financial liabilities, less cash and cash equivalents and liquid financial assets or shortterm 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.
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 expense (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).
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).
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 Management financial review).
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 time-charter earnings generated by employing DIS' vessels on 'time-charter' contracts (please refer to the Management financial review).
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 Management financial review).
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).
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).
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".
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).
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.
The company that controls a vessel, replacing the registered owner, either through a time-charter or a bareboat charter.
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.
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.
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.
Throughout the first nine months of 2023, the conditions of the product tanker market have remained strong historically, though earnings have not reached the exceptionally high levels observed in late 2022 and have shown some moderation at the beginning of the third quarter, posting however a recovery in the months of August and September as refining throughputs rose sharply to meet the increasing travel demand worldwide and as the US economy and industrial sector proved more resilient than anticipated.
The overall demand for product tankers has been supported this year by several factors, in particular, the shifts in oil trade patterns relating to sanctions imposed on Russia, generating longer-haul routes, the rebound in Chinese oil demand, congestion in the Panama canal, slow fleet growth, low refined product inventories, high and volatile oil prices generating attractive arbitrage opportunities, high refining margins driven by gasoline cracks in the firsthalf of the year and by diesel cracks later, and lastly by the ongoing displacement of older refineries by more modern and efficient ones located farther away from the key consuming regions.
The one-year time-charter rate is always the best indicator of spot market expectations and as at the end of September 2023 was assessed at around US\$ 27,000 per day for a conventional MR2, with a premium of around US\$ 2,000 per day for an Eco MR2.
In the first 9 months of 2023, DIS recorded a Net profit of US\$ 148.7 million vs. a Net profit of US\$ 62.8 million posted in the same period of 2022. Such positive variance is attributable to a much stronger product tanker market relative to the same period of last year. Excluding results on disposal and non-recurring financial items, as well as the asset impairment (in the first 9 months of 2022), DIS' Net result would have amounted to US\$ 153.0 million in the first 9 months of 2023, compared with US\$ 69.3 million recorded in the same period of 2022. In Q3 2023, DIS posted a Net profit of US\$ 48.9 million vs. a Net profit of US\$ 43.6 million in the third quarter of last year. Excluding results on disposal and non-recurring financial items, as well as the asset impairment, DIS' Net result would have amounted to US\$ 49.4 million in Q3 2023 compared with US\$ 46.7 million in Q3 2022.
In the first 9 months of 2023, DIS generated an EBITDA of US\$ 213.1 million vs. US\$ 135.3 million achieved in the same period of 2022 (Q3 2023: US\$ 70.4 million vs. Q3 2022: US\$ 69.1 million), whilst its operating cash flow was positive for US\$ 224.4 million in the first 9 months of 2023 compared with US\$ 80.5 million generated in the same period of last year.
In terms of spot performance, DIS achieved a daily spot rate of US\$ 33,434 in the first 9 months of 2023 vs. US\$ 26,963 in the same period of 2022 (Q3 2023: US\$ 31,782 vs. Q3 2022: US\$ 37,159), due to the much stronger market relative to the same period of last year.
At the same time, 27.9% of DIS' total employment days in the first 9 months of 2023, were covered through 'timecharter' contracts at an average daily rate of US\$ 27,951 (9 months 2022: 38.8% coverage at an average daily rate of US\$ 15,251). 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\$ 31,904 in the first 9 months of 2023, compared with US\$ 22,421 achieved in the same period of 2022 (Q3 2023: US\$ 30,860 vs. Q3 2022: US\$ 30,230).
| Q3 2023 | Q3 2022 | US\$ Thousand | 9 MONTHS 2023 |
9 MONTHS 2022 |
|---|---|---|---|---|
| 136,947 | 136,494 Revenue | 407,779 | 311,774 | |
| (38,646) | (42,321) Voyage costs | (105,984) | (101,994) | |
| 98,301 | 94,173 Time charter equivalent earnings* | 301,795 | 209,780 | |
| 1,228 | 1,213 Bareboat charter revenue * | 3,640 | 3,599 | |
| 99,529 | 95,386 Total net revenue | 305,435 | 213,379 | |
| - | (1,188) Time charter hire costs | (27) | (2,909) | |
| (21,403) | (20,199) Other direct operating costs | (69,391) | (62,340) | |
| (7,130) | (4,414) General and administrative costs | (18,446) | (11,254) | |
| (599) | (513) Result on disposal of fixed assets | (4,425) | (1,561) | |
| 70,397 | 69,072 EBITDA* | 213,146 | 135,315 | |
| (15,869) | (14,837) Depreciation and impairment | (46,358) | (47,365) | |
| 54,528 | 54,235 EBIT* | 166,788 | 87,950 | |
| 1,147 | (197) Net financial income | 3,525 | 696 | |
| (6,611) | (10,321) Net financial (charges) | (20,819) | (25,603) | |
| 49,064 | 43,717 Profit before tax | 149,494 | 63,043 | |
| (178) | (159) Income taxes | (775) | (267) | |
| 48,886 | 43,558 Net profit | 148,719 | 62,776 |
*see Alternative Performance Measures on page 9;
Revenue was US\$ 136.9 million in Q3 2023 (US\$ 136.5 million in Q3 2022) and US\$ 407.8 million in the first 9 months of 2023 (US\$ 311.8 million in the same period of last year). The increase in gross revenue compared with the previous year is attributable mainly to a stronger freight market. In addition, the percentage of off-hire days in the first 9 months of 2023 (2.0%) was higher than in the same period of the previous year (1.3%), 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\$ (38.6) million in Q3 2023 and US\$ (106.0) million in the first 9 months of the current year (Q3 2022: US\$ (42.3) million and 9 months 2022: US\$ (102.0) million). The higher costs in the first 9 months of 2023 reflect DIS' higher exposure to the spot market and higher bunker prices, relative to the same period of last year.
Time charter equivalent earnings were of US\$ 98.3 million in Q3 2023 vs. US\$ 94.2 million in Q3 2022 and of US\$ 301.8 million in the first 9 months of 2023 vs. US\$ 209.8 million in the same period of 2022. In detail, DIS realized a daily average spot rate of US\$ 31,782 in Q3 2023 compared with US\$ 37,159 in Q3 2022 and of US\$ 33,434 in the first 9 months of 2023 compared with US\$ 26,963 in the same period of last year.
In the first 9 months of 2023, DIS maintained a good level of 'coverage'6 (fixed-rate contracts), securing an average of 27.9% (9 months 2022: 38.8%) of its available vessel days at a daily average fixed rate of US\$ 27,951 (9 months 2022: US\$ 15,251). 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.
6 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\$ 6,885 (in line with DIS' fleet FY'22 average 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.
DIS' total daily average TCE (Spot and Time Charter)7 was of US\$ 30,860 in Q3 2023 vs. US\$ 30,230 in Q3 2022, and of US\$ 31,904 in the first 9 months of 2023 vs. US\$ 22,421 in the first 9 months of last year.
| DIS TCE daily rates (US dollars) |
2022 | 2023 | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| Q1 | Q2 | Q3 | 9M | Q4 | FY | Q1 | Q2 | Q3 | 9M | |
| Spot | 12,857 | 28,687 | 37,159 | 26,963 | 42,751 | 31,758 | 36,652 | 31,746 | 31,782 | 33,434 |
| Fixed | 14,968 | 15,373 | 15,497 | 15,251 | 19,957 | 15,925 | 26,367 | 28,383 | 28,830 | 27,951 |
| Average | 13,796 | 23,389 | 30,230 | 22,421 | 38,294 | 26,376 | 34,056 | 30,831 | 30,860 | 31,904 |
Bareboat charter revenue was of US\$ 1.2 million in Q3 2023 and of US\$ 3.6 million in the first 9 months of 2023, 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 is effective for annual periods beginning on or after 1 January 2019 and was adopted by the Company. IFRS 16 substantially changes the Group's Consolidated Financial Statements, significantly affecting the treatment by lessees of contracts which in previous periods were treated as operating leases. 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 (amounting to the liability plus the present value of any restoration costs and any incremental costs in entering the lease, as well as any lease payments made prior to commencement of the lease, minus any lease incentives already received). 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\$ 31.1 million in the first 9 months of 2023 and by US\$ 36.4 million in the same period of 2022, 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\$ (31.1) million in the first 9 months of 2023, compared with US\$ (39.3) million in the same period of last year. In the first 9 months of 2023, DIS operated a lower number of chartered-in vessels (7.5 equivalent ships) relative to the same period of last year (9.9 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\$ 13.8 million in the first 9 month of 2023 (US\$ 16.5 million increase in the first 9 months of 2022), 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\$ (55.6) million in the first 9 months of 2023 vs. US\$ (45.9) million in the same period of 2022. In the first 9 months of 2023, the Company operated a larger fleet of owned and bareboat vessels relative to the same period of last year (9 months 2023: 28.5 vs. 9 months 2022: 25.7). 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\$ (7.1) million in Q3 2022 (US\$ (4.4) million in Q3 2022) and to US\$ (18.4) million in the first 9 months of 2023 (US\$ (11.3) million in the first 9 months of 2022). These costs relate mainly to onshore personnel, together with office costs, consultancies, travel expenses and others.
Result on disposal of vessel was negative for US\$ (0.6) million in Q3 2023 vs. US\$ (0.5) million in Q3 2022 and for US\$ (4.4) million in the first 9 months of 2023 vs. US\$ (1.6) million in the same period of last year. The amount refers to the amortisation of the net deferred result on vessels sold and leased back in the previous years. In addition, the amount for the first 9 months of 2023 includes US\$ (3.4) 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
7 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\$ 6,885 (in line with DIS' fleet FY'22 average 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.
High Loyalty, whose purchase options were exercised by d'Amico Tankers d.a.c. in the first half of the current year.
EBITDA was of US\$ 70.4 million in Q3 2023 (US\$ 69.1 million in Q3 2022) and US\$ 213.1 million in the first 9 months of 2023 (US\$ 135.3 million in the first 9 months of 2022), reflecting the better freight markets experienced in the first nine months of the current year.
Depreciation, impairment, and impairment reversal amounted to US\$ (15.9) million in Q3 2023 (US\$ (14.8) million in Q3 2022) and to US\$ (46.4) million in the first 9 months of 2023 (US\$ (47.4) million in the first 9 months of 2022). The amount for the first 9 months of 2022 includes an impairment of US\$ (2.1) on a MR vessel (M/T High Priority) owned by d'Amico Tankers d.a.c., whose sale was announced in Q1 2022 and finalized in Q2 2022. In accordance with IFRS 5, this vessel was classified as 'asset held for sale' at the end of Q1 2022, with the difference between its fair value less cost to sell and its book value charged to the Income Statement.
EBIT was of US\$ 54.5 million in Q3 2023 (US\$ 54.2 million in Q3 2022) and of US\$ 166.8 million in the first 9 months of 2023 (US\$ 88.0 million in the first 9 months of 2022).
Net financial income was of US\$ 1.1 million in Q3 2023 (US\$ (0.2) million in Q3 2022) and of US\$ 3.5 million in the first 9 months of 2023 (US\$ 0.7 million in the first 9 months 2022). The amount for the first 9 months of 2023 comprises mainly interest income on short-term securities and funds held with financial institutions on deposit or current accounts. The amount for the first 9 months of 2022 comprises mainly US\$ 0.6 million unrealized gain in relation to the ineffective part of DIS' interest rate swap agreements, as well as bank interest income on funds held with financial institutions on deposit and current accounts.
Net financial charges amounted to US\$ (6.6) million in Q3 2023 (US\$ (10.3) million in Q3 2022) and US\$ (20.8) million in the first 9 months of 2023 (US\$ (25.6) million in the first 9 months of 2022). The amount for the first 9 months of 2023 comprises mainly US\$ (19.8) 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, as well as US\$ (1.0) million negative exchange difference. The amount recorded in the same period of last year included US\$ (21.5) 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 net realised loss on derivative instruments of US\$ (0.9) million (US\$ (0.6) million realized loss on freight derivative instruments, US\$ (0.8) million realized loss on foreign exchange derivative instruments used for hedging purposes, US\$ 0.5 million realized gain arising from the closing of some interest rate swaps), US\$ (0.6) million negative exchange difference, and US\$ (2.5) million negative impact arising from the termination of the lease contracts on High Fidelity and High Discovery.
DIS recorded a Profit before tax of US\$ 49.1 million in Q3 2023 vs. US\$ 43.7 million in Q3 2022 and a profit of US\$ 149.5 million in the first 9 months of 2023 vs. US\$ 63.0 million in the same period of 2022.
Income taxes amounted to US\$ (0.2) million in Q3 2023 in line with the amount of Q3 2022 and to US\$ (0.8) million in the first 9 months of 2023 vs. US\$ (0.3) million in the same period of 2022.
DIS recorded a Net profit of US\$ 48.9 million in Q3 2023 vs. a Net profit of US\$ 43.6 million achieved in Q3 2022 and a Net profit of US\$ 148.7 million in the first 9 months of 2023 vs. US\$ 62.8 million in the same period of last year.
Excluding the result on disposals and non-recurring financial items from Q3 2023 (US\$ (0.5) million) and from the same period of 2022 (US\$ (3.1) million), DIS' Net result would have amounted to US\$ 49.4 million in Q3 2023 compared with US\$ 46.7 million in Q3 2022.
Excluding the result on disposals and non-recurring financial items from the first 9 months of 2023 (US\$ (4.3) million) and from the first 9 months of 2022 (US\$ (4.6) million), as well as the asset impairment (US\$ (2.1) million in the first 9 months of 2022), DIS' Net result would have amounted to US\$ 153.0 million in the first 9 months of 2023 compared with US\$ 69.3 million recorded in the same period of the previous year.
| As at | As at | |
|---|---|---|
| US\$ Thousand | 30 September 2023 | 31 December 2022 |
| ASSETS | ||
| Non-current assets | 810,232 | 818,401 |
| Current assets | 200,385 | 236,484 |
| Total assets | 1,010,617 | 1,054,885 |
| LIABILITIES AND SHAREHOLDERS' EQUITY | ||
| Shareholders' equity | 596,107 | 478,414 |
| Non-current liabilities | 323,894 | 419,681 |
| Current liabilities | 90,616 | 156,790 |
| Total liabilities and shareholders' equity | 1,010,617 | 1,054,885 |
Non-current assets mainly relate to DIS' owned vessels net book value, including right-of-use assets (there are no vessels under construction as at 30 September 2023). According to the valuation report provided by a primary broker, the estimated market value of DIS' owned and bareboat fleet as at 30 September 2023 was of US\$ 1,092.0 million.
Gross Capital expenditures (Capex) were of US\$ 37.5 million in the first 9 months of 2023 vs. US\$ 0.9 million in the same period of 2022. These amounts include mainly the capitalised dry-dock costs pertaining to owned and bareboat vessels. In addition, the amount for the first 9 months of 2023 includes approximately US\$ 30.0 million related to d'Amico Tankers' exercise of its purchase option on M/T High Explorer (an MR vessel, time-chartered-in by d'Amico Tankers since 2018).
Current assets as at 30 September 2023 amounted to US\$ 200.4 million. As at the same date, in addition to the working capital items (inventories and trade receivables amounting to US\$ 15.6 million and US\$ 74.8 million, respectively), current assets include 'cash and cash equivalent' of US\$ 105.4 million.
Non-current liabilities were of US\$ 323.9 million as at 30 September 2023 and mainly consist of the long-term portion of the debt due to banks (disclosed under the Net Indebtedness section of the report) and of lease liabilities.
Current liabilities, other than the debt due to banks and other lenders (disclosed under the Net Indebtedness section of the report), includes as at 30 September 2023, working capital items amounting to US\$ 34.3 million (mainly relating to trade and other payables), US\$ 21.4 million of lease liabilities, and US\$ 2.9 million of other current financial liabilities.
Shareholders' equity amounted to US\$ 596.1 million as at 30 September 2023 (US\$ 478.4 million as at 31 December 2022). The increase relative to year-end 2022 is mainly due to the Net result generated in the first nine months of 2023, as well as to the change in the valuation of cash-flow hedges during the period and the gross dividend of US\$22.0 million, approved and distributed in Q2 of this year.
DIS' Net debt as at 30 September 2023 amounted to US\$ 264.6 million compared to US\$ 409.9 million as at 31 December 2022. Due to the application of IFRS 16 these balances include from 1 January 2019 an additional lease liability amounting to US\$ 30.0 million as at the end of September 2023 vs. US\$ 39.8 million as at the end of 2022. The net debt (excluding the IFRS16 effect) / fleet market value ratio was of 21.5% as at 30 September 2023 vs. 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).
| As at | As at | |
|---|---|---|
| US\$ Thousand | 30 September 2023 | 31 December 2022 |
| Liquidity - Cash and cash equivalents | 105,358 | 117,896 |
| Other current financial assets | 4,544 | 8,754 |
| Other current financial assets – related party ** | 36 | 33 |
| Total current financial assets | 109,938 | 126,683 |
| Bank loans and other lenders – current | 31,184 | 51,086 |
| Liabilities from leases – current | 21,445 | 71,740 |
| Other current financial liabilities – 3rd parties | 2,953 | 3,129 |
| Total current financial debt | 55,582 | 125,955 |
| Net current financial debt (asset) | (54,356) | (728) |
| Other non-current financial assets – third parties | 4,944 | 9,077 |
| Other non-current financial assets – related party ** | - | 26 |
| Total non-current financial assets | 4,944 | 9,103 |
| Bank loans – non-current | 243,662 | 266,124 |
| Liabilities from financial lease – non-current | 77,484 | 150,225 |
| Other non-current financial liabilities – 3rd parties | 2,748 | 3,332 |
| Total non-current financial debt | 323,894 | 419,681 |
| Net non-current financial debt | 318,950 | 410,578 |
| Net financial indebtedness | 264,594 | 409,850 |
* See Alternative Performance Measures on page 9
** Please refer to the disclosures on related parties in the notes to the consolidated Financial Statements
The balance of Total Current Financial Assets was of US\$ 109.9 million as at the end of September 2023. The total amount comprises mainly Cash and cash equivalents of US\$ 105.4 million, the current portion of deferred losses on disposal on sale and leaseback transactions, amounting to US\$ 1.5 million and the positive fair value of derivative financial instruments (mainly interest rate swaps), amounting to US\$ 3.1 million.
Total Non-Current Financial Assets comprise mainly the non-current portion of deferred losses on disposal on sale and leaseback transactions, amounting to US\$ 1.4 million and the positive fair value of derivative financial instruments (interest rate swaps), amounting to US\$ 3.5 million.
The total outstanding bank debt (Bank loans) as at 30 September 2023 amounted to US\$ 274.8 million, of which US\$ 31.2 million is due within one year. DIS' bank debt as at 30 September 2023 comprises mainly the following long-term facilities granted to d'Amico Tankers d.a.c. (Ireland), the key operating company of the Group:
(iv) Skandinaviska Enskilda Banken 5-years term-loan facility to finance 1 LR1 vessel built in 2017, with an outstanding debt of US\$ 17.3 million.
(v) Tokyo Century Corporation 5-years term-loan facility to finance 1 MR vessel built in 2017, with a total outstanding debt of US\$ 12.3 million.
Lease liabilities include the lease on M/T Cielo di Houston, sold and leased back in 2019 and the leases on M/T High Fidelity and M/T High Discovery, whose previous leases were terminated in Q3 2022, with the vessels then refinanced with new 10-year leases. In addition, 'lease liabilities' include as at 30 September 2023, US\$ 30.0 million arising from the application of IFRS 16 on contracts classified until 2018 as 'operating leases'.
Other Non-current financial liabilities include mainly the deferred profit on disposal on sale and leaseback transactions.
DIS' Net Cash Flow for the first 9 months of 2023 was of US\$ (2.9) million vs. US\$ 43.5 million in the same period of 2022 (Q3 2023: US\$ (7.9) million vs. Q3 2022: US\$ 40.3 million).
| Q3 2023 | Q3 2022 US\$ Thousand |
9 MONTHS 2023 |
9 MONTHS 2022 |
|---|---|---|---|
| 51,391 | 61,479 Cash flow from operating activities | 224,369 | 80,590 |
| (1,892) | (25,499) Cash flow from investing activities | (37,456) | (7,088) |
| (57,442) | 4,282 Cash flow from financing activities | (189,793) | (29,958) |
| (7,943) | 40,262 Change in cash balance | (2,880) | 43,544 |
| 113,301 | 29,688 Cash and cash equivalents net of bank overdrafts at the beginning of the period | 108,238 | 26,406 |
| 105,358 | 69,950 Cash and cash equivalents net of bank overdrafts at the end of the period | 105,358 | 69,950 |
| 105,358 | 85,135 Cash and cash equivalents at the end of the period | 105,358 | 85,135 |
| - | (15,185) Bank overdrafts at the end of the period | - | (15,185) |
Cash flow from operating activities was positive, amounting to US\$ 51.4 million in Q3 2023 vs. US\$ 61.5 million in Q3 2022, and to US\$ 224.4 million in the first 9 months of 2023 vs. US\$ 80.5 million in the first 9 months of 2022. This positive variance is attributable to the better operating performance achieved in the first nine months of 2023, relative to the same period of last year.
The net Cash flow from investing activities was negative for US\$ (1.9) million in Q3 2023 (US\$ (25.5) million in Q3 2022) and for US\$ (37.5) million in the first 9 months of 2023 (US\$ (7.1) million in the first 9 months of 2022). The amount for the first 9 months of 2023, includes d'Amico Tankers d.a.c.'s exercise of its purchase option on the M/T High Explorer for a consideration of JPY 4.1 billion (equivalent to approximately US\$ 30.0 million). In addition, the total amount for the year, comprises also the costs relating to drydocks which occurred in the period. The amount for the first 9 months of 2022 comprised d'Amico Tankers d.a.c.'s acquisition of 100% of Glenda International Shipping d.a.c. (or "the JV") through the redemption of the shares owned by Topley Corporation (part of the Glencore Group) in the JV for a consideration of US\$ 27.4 million. The impact of this transaction, net of the cash equivalent acquired from the JV as at the redemption date, was reflected in the cash flow from investing activities,
amounting to US\$ (25.5) million. In addition, the total amount for the first 9 months of 2022 comprised the costs relating to drydocks which occurred in the period, off-set by US\$ 19.3 million generated from the sale of the M/T High Valor in Q1 2022 and M/T High Priority in Q2 2022.
Cash flow from financing activities was negative, amounting to US\$ (189.8) million in the first 9 months of 2023. This figure comprises mainly: (i) US\$ (70.8) million in bank debt repayments, of which US\$ (23.4) million were due to the reimbursement of the facility related to the M/T Cielo di Londra (whose debt was due to expire in March 2024) and US\$ (13.8) million were due to the reimbursement of the facility related to the M/T High Wind (whose debt was due to expire in 2025); ii) US\$ 37.8 million bank debt drawdown, related mainly to the US\$ 17.5 million financing of the M/T High Explorer, purchased by d'Amico Tankers d.a.c. in Q2 2023 and to the US\$ 20.0 million refinancing of the M/T Cielo di Londra (whose previous facility was reimbursed in Q2 2023); iii) US\$ (127.9) million repayment of lease liabilities, including US\$ (102.8) million related to the termination of the leases on High Voyager, High Freedom, High Loyalty, High Trust and High Trader, following d'Amico Tankers d.a.c.'s exercise of the respective purchase options; iv) US\$ (22.0) million dividend distribution in Q2 2023; v) US\$ (6.7) million in share buybacks.
In the first 9 months of 2023, the main events for the d'Amico International Shipping Group were the following:
Dividend distribution: In March 2023, the Board of Directors of d'Amico International Shipping proposed to the Shareholders a dividend to be paid in cash of US\$ 22,011,953.96 gross (US\$ 18,710,160.87 net, after deducting the 15% applicable withholding tax), corresponding to US\$ 0.0153 per issued and outstanding share net of withholding taxes, to be paid out of the distributable reserves, including the share premium reserve.
Approval of the 2022 statutory and consolidated Financial Statement, the dividend distribution and the 2022- 2024 medium-long term incentive plan: In April 2023, the Annual General Shareholders' meeting of d'Amico International Shipping S.A. approved the 2022 statutory and consolidated financial statements of the Company, showing a consolidated net profit of US\$ 134,869,615. 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 abovementioned dividend was made to the Shareholders on April 26th, 2023 with related coupon n. 5 detachment date (ex-date) occurring on April 24th, 2023 and record date on April 25th, 2023 (no dividend was paid with reference to the 18,170,238 shares repurchased by the Company, treasury shares not carrying a dividend right). In addition, the Annual General Shareholders' meeting of DIS approved the 2022-2024 Medium-Long Term Incentive Plan as illustrated in the Information Document – drafted in accordance with art. Art. 84-bis of the Regulation adopted by CONSOB – and related report of the Board of Directors, both approved on March 9th, 2023 and available on the Company's web site.
Approval of the implementation of a reverse stock split with respect to all the shares of the Company and the related resolutions regarding the authorized capital and the buyback authorization: In June 2023, d'Amico International Shipping S.A.'s board of directors (the "Board of Directors" or the "Board") resolved to implement the share consolidation with respect to all the shares of the Company at a ratio of one (1) to ten (10) (the "Reverse Stock Split"), as approved by the Company's extraordinary general meeting of shareholders held on 13 June 2023 (the "EGM"), in compliance with the relevant delegation of powers conferred by the EGM. The Board resolved to set the date in which the Reverse Stock Split was implemented and effective at 19 June 2023 (the "Effective Date"). To avoid the creation of fractions of consolidated shares as a result of the Reverse Stock Split, as resolved by the EGM, with effect as of the Effective Date, nine (9) of the existing treasury shares of the Company were cancelled, thereby reducing the number of shares issued of the Company from the previous 1,241,065,569 to 1,241,065,560 without reducing the share capital of the Company. As a result of the Reverse Stock Split, as of the Effective Date, the share capital of the Company was set at USD 62,053,278.45, divided into 124,106,556 shares with no nominal value and with ISIN code LU2592315662. Furthermore, as a consequence of the Reverse Stock Split, in accordance with the EGM resolution, as of the Effective Date (i) the Company's authorised share capital, including the issued share capital, amounted to USD 87,500,000, divided into 175,000,000 shares with no nominal value and (ii) the Board was authorized for a period of 5 years from 19 June 2023 (therefore until 19 June 2028), within the limits of the authorised share capital, to, inter alia, increase the Company's issued capital up to the maximum amount of the authorised
capital and to remove or limit the statutory preferential subscription right of the shareholders. In addition, as provided for in the EGM resolution and disclosed via press release, as of the Effective Date, the buyback authorization renewal was implemented.
Early termination of the previous share buyback authorized period and start of the new own shares buyback programme: In June 2023 d'Amico International Shipping S.A.'s extraordinary general meeting of shareholders resolved to terminate with effect on June 19th, 2023, the Board of Directors' five years authorization to repurchase the Company's own shares – as resolved by the annual general meeting of shareholders held on April 20th, 2021 (the "Authorization"). During the Authorization period, DIS did not repurchase any own shares but assigned a total of 263,209 own shares to the beneficiaries of the Company's 2019-2021 Medium-Long Term Variable Incentive Plan.
The Board of Directors resolved to start on 19 June 2023 the own shares buyback programme pursuant to the new authorization issued by the extraordinary general meeting of shareholders held on 13 June 2023 (the "Programme"). According to Article 430-15 et seq. of the Luxembourg law of August 10, 1915 concerning commercial companies, as amended from time to time (the "Luxembourg Law"), Article 8 of the Company's articles of association (the "Articles of Association"), the relevant provisions of the EU Reg. no 596/2014 and its delegated and implementing acts (the "Market Abuse Regulation"), together with the applicable Italian and Luxembourg laws, regulations and the best market practices which are accepted on the Italian regulated market and currently authorized or authorized in future by the applicable laws and regulations. The Programme is aimed at creating an "inventory of treasury shares" that will be available as a means of payment, exchange, transfer, contribution, assignment, sale or other types of disposals associated notably with transactions linked to the Company and/or its subsidiaries' and with any projects offering an effective investment opportunity in line with the strategic policy of the Company. The Programme shall be carried out using available reserves and/or distributable earnings sufficient for the planned repurchase of fully paid-up own shares, subject to these transactions not having the effect of reducing the Company's net assets below the amount mentioned in paragraph 1 & 2 of Article 461-2 of the Luxembourg Law (i.e. the aggregate of the subscribed share capital and the reserves which may not be distributed according to the law or the Articles of Association of the Company), and at a price per share within the following range: (i) a minimum which shall not be 10% lower than the official share price reported in the trading session on the day before each individual transaction is executed; (ii) a maximum which shall not be 10% higher than the official share price reported in the trading session on the day before each individual transaction is executed. As per the shareholders' new authorization, up to 18,615,795 ordinary shares of the Company can be repurchased (including the Own Shares already repurchased and held in the Company's portfolio in compliance with Article 430-15 of the Luxembourg Law). Furthermore, according to the resolution of the Board of Directors, the maximum value of own shares that can be repurchased under the Programme cannot exceed Euro 100 million.
The repurchase and disposal of own shares shall be carried out in one or more tranches on the regulated market managed and organized by Borsa Italiana S.p.A., in accordance with the relevant provisions of the Market Abuse Regulation, in respect of the operative instructions issued from the organizational and management rules of the markets, so as to assure a fair deal to all the shareholders, and will be executed and coordinated by Equita SIM S.p.A. an equity broker duly engaged for this purpose, which will act completely independently and without any influence from the Company regarding the moment of such repurchases and disposals, in accordance with the relevant applicable laws and of the above mentioned Shareholders' new authorization. In all cases, each transaction shall be executed and publicized in accordance with Luxembourg and/or Italian laws and regulations where applicable, as well as according to the relevant provisions concerning exemptions from market abuse applicable legislation for buyback programs and stabilization of financial instruments. In particular, any authorized own shares sale and purchase transactions shall be carried out at any time, not being subject to any time limit and notably in order to pursue the purposes of the Programme.
The authorization to repurchase and sell the Company's own shares in one or more tranches has been granted to the Board of Directors, with the option to delegate, for a maximum period of five (5) years from 19th June, 2023 (i.e. the Reverse Stock Split effective date) and thus expiring on 19th June, 2028.
Executed buyback program: In the first 9 months of 2023, d'Amico International Shipping S.A. has repurchased n. 1,579,619 own shares (representing 1.27% 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 3.8751, for a total consideration of Euro 6,121,137. As at the end of September 2023, d'Amico International Shipping S.A. holds nr. 3,382,542 own shares, representing 2.73% of its outstanding share capital.
Application for membership of the OTCQX® Best Market: In September 2023, the Board of Directors of d'Amico International Shipping S.A., has resolved to apply for membership of the OTCQX Best Market ("OTCQX" or "OTCQX Market"), managed by the OTC Market Group ("OTCM"); DIS' admission is expected before the end of the year and is subject to OTCM's approval. DIS' shares are listed on the STAR Segment of the Italian stock exchange market (Borsa Italiana) and are currently traded over the counter (OTC) in the USA, in the OTC Pink market segment, managed by the OTC Market Group. The OTCQX International Market segment for international companies, is an established public market with high financial and corporate governance standards, recognized by the US Securities Exchange Commission (SEC), which provides to US investors a more transparent, liquid, and efficient cross-trading alternative to the OTC Pink market. In addition, companies listed on OTCQX are Blue sky compliant in 37 US states (not available in the OTC Pink market), enabling reverse solicitation and distribution of research by brokers to US investors in such states.
'Time Charter-Out' Fleet: In January 2023, d'Amico Tankers d.a.c. fixed a time charter-out contract with an oil-major for one of its handysize vessels for a minimum of 11 months and a maximum of 13 months, starting from January 2023.
In February 2023, d'Amico Tankers d.a.c. fixed a time charter-out contract with a leading trading-house for one of its handysize vessels for 12 months, starting from February 2023. In the same month, d'Amico Tankers d.a.c. fixed a time charter-out contract with another leading trading-house for one of its MR vessels for 12 months, starting from April 2023.
In April 2023, d'Amico Tankers d.a.c. fixed a time charter-out contract with an oil-major for one of its MR vessels for 6 months, starting in April 2023.
In May 2023, d'Amico Tankers d.a.c. fixed a time charter-out contract with an oil-major for one of its MR vessels for 32 months, starting in May 2023.
In July 2023, 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 minimum of 10 months and a maximum of 13 months, starting from August 2023.
In the same month, d'Amico Tankers d.a.c. fixed a time charter-out contract with a leading trading-house for one of its MR vessels for 12 months, starting from August 2023.
In September 2023, d'Amico Tankers d.a.c. extended a time charter-out contract with an oil-major for one of its MR vessels for 3 years.
Exercise of the purchase option on a TC-in MR vessel: In January 2023, 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 High Explorer, a 50,000 dwt MR product tanker vessel, built in 2018 by Onomichi Dockyard Co., Japan, for a consideration of JPY 4.1 billion (equivalent to approximately US\$ 30.0 million), with delivery having occurred in May 2023.
Exercise of purchase options on bareboat chartered-in MR vessels: In January 2023, 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 High Freedom, a 49,999 dwt MR product tanker vessel, built in 2014 by Hyundai Mipo, South Korea, for a consideration of US\$ 20.1 million, with delivery having occurred in May 2023.
In May 2023, d'Amico International Shipping S.A. announced that its operating subsidiary d'Amico Tankers d.a.c. exercised its purchase option on:
'Time Charter-In' Fleet: In September 2023, d'Amico Tankers d.a.c. exercised its options to extend the time charter-in contracts on the following vessels:
'Time Charter-Out' Fleet: In October 2023, d'Amico Tankers d.a.c. fixed a time charter-out contract with a leading trading-house for one of its LR1 vessels for a minimum of 11 months and a maximum of 13 months, starting from November 2023.
In the same month, d'Amico Tankers d.a.c. fixed a time charter-out contract with a leading trading-house for one of its Handy vessels for 12 months, starting from the end of October 2023.
In November 2023, d'Amico Tankers d.a.c. fixed a time charter-out contract with a leading trading-house for one of its Handy vessels for 2 years, starting from December 2023.
In November 2023, d'Amico Tankers d.a.c. extended a time charter-out contract with an oil-major for one of its Handy vessels for a minimum of 11 months and a maximum of 13 months, starting from December 2023
| As at 30 September 2023 | As at 09 November 2023 | |||||||
|---|---|---|---|---|---|---|---|---|
| LR1 | MR | Handysize | Total | LR1 | MR | Handysize | Total | |
| Owned | 5 | 15 | 6 | 26 | 5 | 15 | 6 | 26 |
| Bareboat chartered-in* | 1 | 2 | - | 3 | 1 | 2 | - | 3 |
| Long-term time chartered-in | - | 3 | - | 3 | - | 3 | - | 3 |
| Short-term time chartered-in | - | 4 | - | 4 | - | 4 | - | 4 |
| Total | 6 | 24 | 6 | 36 | 6 | 24 | 6 | 36 |
The profile of d'Amico International Shipping's vessels on the water is summarized as follows.
* with purchase obligation
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, transhipments, 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:
The IEA expects global refinery runs will rise from 81.6 million b/d in October to 84.0 million b/d in December 2023.
According to IEA's October report, refining throughputs in '24 should average 83.4 million b/d, around 1.0 million b/d higher than the average for '23.
| Q3 2023 | Q3 2022 | US\$ Thousand | 9 MONTHS 2023 |
9 MONTHS 2022 |
|---|---|---|---|---|
| 136,947 | 136,494 Revenue | 407,779 | 311,774 | |
| (38,646) | (42,321) Voyage costs | (105,984) | (101,994) | |
| 98,301 | 94,173 Time charter equivalent earnings* | 301,795 | 209,780 | |
| 1,228 | 1,213 Bareboat charter revenue * | 3,640 | 3,599 | |
| 99,529 | 95,386 Total net revenue | 305,435 | 213,379 | |
| - | (1,188) Time charter hire costs | (27) | (2,909) | |
| (21,403) | (20,199) Other direct operating costs | (69,391) | (62,340) | |
| (7,130) | (4,414) General and administrative costs | (18,446) | (11,254) | |
| (599) | (513) Result on disposal of fixed assets | (4,425) | (1,561) | |
| 70,397 | 69,072 EBITDA* | 213,146 | 135,315 | |
| (15,869) | (14,837) Depreciation and impairment | (46,358) | (47,365) | |
| 54,528 | 54,235 EBIT* | 166,788 | 87,950 | |
| 1,147 | (197) Net financial income | 3,525 | 696 | |
| (6,611) | (10,321) Net financial (charges) | (20,819) | (25,603) | |
| 49,064 | 43,717 Profit before tax | 149,494 | 63,043 | |
| (178) | (159) Income taxes | (775) | (267) | |
| 48,886 | 43,558 Net profit | 148,719 | 62,776 | |
| The net result is attributable to the equity holders of the Company | ||||
| 0.402 | 0.356 Earnings (loss) per share in US\$ (1) | 1.219 | 0.513 |
*see Alternative Performance Measures on page 9
| Q3 2023 | Q3 2022 | US\$ Thousand | 9 MONTHS 2023 |
9 MONTHS 2022 |
|---|---|---|---|---|
| 48,886 | 43,558 Profit for the period | 148,719 | 62,776 | |
| Items that can subsequently be reclassified into Profit or Loss | ||||
| (867) | (307) Cash flow hedges | (3,465) | 7,568 | |
| (28) | (148) | Exchange differences in translating foreign operations | 810 | (89) |
| 47,991 | 43,103 Total comprehensive income for the period | 146,064 | 70,054 |
The net result is entirely attributable to the equity holders of the Company
(1 ) For comparative reasons, reported average outstanding shares used in the calculation of the 2022 e.p.s. were adjusted following the criteria of the Reverse stock split which occurred on 13 June 2023 (please refer to the significant events of the first nine months for more detailed information), and the earnings per share (e.p.s.) were restated accordingly. Basic earnings per share (e.p.s.) was calculated on an average number of outstanding shares equal to 121,963,926 in the first nine months of 2023 (122,289,533 shares in the first nine months of 2022) and on an average of 121,616,280 outstanding shares in the third quarter of 2023 (Q3, 2022: 122,288,855 average outstanding shares). In Q3/nine months of 2023 and Q3/nine months 2022 diluted e.p.s. was equal to basic e.p.s.
| As at | As at | |
|---|---|---|
| US\$ Thousand | 30 September 2023 | 31 December 2022 |
| ASSETS | ||
| Property, plant and equipment (PPE) and Right-of-use assets (RoU) | 805,288 | 809,298 |
| Other non-current financial assets | 4,944 | 9,103 |
| Total non-current assets | 810,232 | 818,401 |
| Inventories | 15,608 | 18,303 |
| Receivables and other current assets | 74,839 | 91,498 |
| Other current financial assets | 4,580 | 8,787 |
| Cash and cash equivalents | 105,358 | 117,896 |
| Total current assets | 200,385 | 236,484 |
| TOTAL ASSETS | 1,010,617 | 1,054,885 |
| SHAREHOLDERS' EQUITY AND LIABILITIES | ||
| Share capital | 62,053 | 62,053 |
| Accumulated earnings | 202,548 | 53,938 |
| Share Premium | 346,684 | 368,827 |
| Other reserves | (15,178) | (6,404) |
| Total shareholders' equity | 596,107 | 478,414 |
| Banks and other lenders | 243,662 | 266,124 |
| Non-current lease liabilities | 77,484 | 150,225 |
| Other non-current financial liabilities | 2,748 | 3,332 |
| Non-current liabilities | 323,894 | 419,681 |
| Banks and other lenders | 31,184 | 51,086 |
| Current lease liabilities | 21,445 | 71,740 |
| Payables and other current liabilities | 34,292 | 30,734 |
| Other current financial liabilities | 2,953 | 3,129 |
| Current tax payable | 742 | 101 |
| Total current liabilities | 90,616 | 156,790 |
| TOTAL SHAREHOLDERS' EQUITY AND LIABILITIES | 1,010,617 | 1,054,885 |
9 November 2023
On behalf of the Board
| Q3 2023 | Q3 2022 | US\$ Thousand | 9 MONTHS 2023 |
9 MONTHS 2022 |
|---|---|---|---|---|
| 48,886 | 43,558 Profit for the period | 148,719 | 62,776 | |
| 15,869 | 14,837 Depreciation and amortisation | 46,358 | 45,285 | |
| - | - Impairment | - | 2,080 | |
| 178 | 159 Current and deferred income tax | 775 | 267 | |
| 1,485 | 6,121 Net lease cost | 6,948 | 13,735 | |
| 3,979 | 4,407 Other Financial charges (income) | 10,346 | 11,172 | |
| 599 | 513 Result on disposal of fixed assets | 4,425 | 1,561 | |
| (28) | (329) Other non-cash changes | 798 | (441) | |
| 221 | - Allotment and accruals LTI | 433 | 110* | |
| 71,189 | 69,266 Cash flow from operating activities before changes in working capital | 218,802 | 136,545 | |
| (945) | (2,710) Movement in inventories | 2,696 | (8,989) | |
| (17,444) | 768 Movement in amounts receivable | 16,607 | (33,193) | |
| 4,050 | (189) Movement in amounts payable | (400) | 7,153 | |
| (46) | (108) Taxes (paid) received | (133) | (214) | |
| (1,485) | (3,572) Net cash payments for the interest portion of IFRS16 related leases | (6,948) | (11,176) | |
| (3,928) | (1,976) Net interest paid | (7,055) | (9,536) | |
| 51,391 | 61,479 Net cash flow from operating activities | 224,369 | 80,590 | |
| (1,892) | (3) Acquisition of fixed assets | (37,456) | (897) | |
| - | 46 Sale of fixed assets | - | 19,351 | |
| - | (25,542) Increase in participation in Glenda International Shipping** | - | (25,542) | |
| (1,892) | (25,499) Net cash flow from investing activities | (37,456) | (7,088) | |
| - | 4 Share capital increase | - | 4 | |
| (96) | - Other changes in shareholder's equity | (131) | - | |
| (5,887) | - Movement in treasury shares | (6,661) | - | |
| - | 48 Movement in other financial receivables | - | 121 | |
| - | - Dividend paid | (22,012) | - | |
| (21,721) | (130,703) Bank loan repayments | (70,821) | (162,379) | |
| 20,000 | 144,172 Bank loan drawdowns | 37,750 | 159,517 | |
| - | 42,900 Proceeds from disposal of assets subsequently leased-back | - | 42,900 | |
| (49,738) | (52,139) Net repayments for the principal portion of the lease liability | (127,918) | (70,121) | |
| (57,442) | 4,282 Net cash flow from financing activities | (189,793) | (29,958) | |
| (7,943) | 40,262 Net increase (decrease) in cash and cash equivalents | (2,880) | 43,544 | |
| 113,301 | 29,688 Cash and cash equivalents net of bank overdrafts at the beginning of the period | 108,238 | 26,406 | |
| 105,358 | 69,950 Cash and cash equivalents net of bank overdrafts at the end of the period | 105,358 | 69,950 | |
| 105,358 | 85,135 Cash and cash equivalents at the end of the period | 105,358 | 85,135 | |
| - | (15,185) Bank overdrafts at the end of the period | - | (15,185) |
*For comparative reasons, the allotment of 9 months 2022 LTI shares in the amount of US\$(9) thousand is reclassified from Net cash-flows from financing activities to Cash flow from operating activities before changes in working capital, therefore changing such cash-flows by the same amount.
** The consideration paid by d'Amico Tankers d.a.c. (US\$27.4 million) for the increase in participation in Glenda International Shipping d.a.c., was allocated to the fair value of the assets and liabilities acquired.
| Share capital |
Retained Earnings |
Share premium |
Other Reserves | Total | |||
|---|---|---|---|---|---|---|---|
| US\$ Thousand | Share-based payments |
Other | Cash-flow hedge |
||||
| Balance as at 1 January 2023 | 62,053 | 53,938 | 368,827 | 238 | (16,349) | 9,707 | 478,414 |
| Purchase of Treasury shares | - | - | - | - | (6,661) | - | (6,661) |
| LTI vesting of share-based plans | - | - | - | 433 | - | - | 433 |
| LTI allotment, share-based (2019-2020 plan) | - | (109) | - | (19) | 128 | - | - |
| Dividend payment | - | - | (22,012) | - | - | - | (22,012) |
| Capitalisation of costs related to operations on capital* | - | - | (131) | - | - | - | (131) |
| Total comprehensive income | - | 148,719 | - | - | 810 | (3,465) | 146,064 |
| Balance as at 30 September 2023 | 62,053 | 202,548 | 346,684 | 652 | (22,072) | 6,242 | 596,107 |
* Reversal Stock Split of 13 June 2023
| Share capital |
Retained Earnings |
Share premium |
Other Reserves | Total | |||
|---|---|---|---|---|---|---|---|
| US\$ Thousand | (Accumulated losses) |
Share-based payments |
Other | Cash-Flow hedge |
|||
| Balance as at 1 January 2022 | 62,053 | (80,568) | 368,823 | 38 | (16,505) | (1,459) | 332,382 |
| Share capital increase | *- | - | 4 | - | - | 4 | |
| LTI allotment, share-based (2019-2020 plan) | - | - | - | (19) | 129 | - | 110 |
| Other changes | - | (254) | - | 163 | (91) | ||
| Total comprehensive income | - | 62,776 | - | (290) | 7,568 | 70,054 | |
| Balance as at 30 September 2022 | 62,053 | (18,046) | 368,827 | 19 | (16,503) | 6,109 | 402,459 |
* Following the exercise of the warrants, on 1 July 2022 a capital increase occurred, leading to an increase in the share capital amounting to US\$ 500; that amount falls below DIS' US\$ thousand reporting threshold.
The following notes form an integral part of the interim consolidated financial report.
d'Amico International Shipping S.A. (individually the "Company" or "d'Amico International Shipping", and when together with its subsidiaries "DIS", "DIS Group" or "the Group") a Sociéte Anonyme, was incorporated under the laws of the Grand-Duchy of Luxembourg on 9 February 2007; its statutory seat is in Luxembourg. The ultimate parent company of the Group is d'Amico Società di Navigazione. DIS is an international marine transportation company, operating mainly through its fully owned subsidiary, d'Amico Tankers d.a.c. (Ireland), as well as other indirectly controlled subsidiaries. All DIS' vessels are double-hulled and are primarily engaged in the transportation of refined oil products, providing worldwide shipping services to the major oil companies and trading houses.
These condensed consolidated interim financial statements as at, and for the nine months period ended 30 September 2023 have been prepared in accordance with IAS 34 – Interim Financial reporting, as adopted by the European Union.
The condensed consolidated interim financial statements are presented in U.S. Dollars, which is the functional currency of the Company and its principal subsidiaries. Rounding is applied to the nearest thousand.
The principal accounting policies, which have been consistently applied, are set out below.
The interim condensed consolidated financial statements do not contain all information and disclosures required in the annual financial statements and should be read in conjunction with the Group's annual financial statements as at 31 December 2022.
The consolidated financial statements are prepared on the basis of the historic cost convention, with the exception of certain financial assets and labilities, which are stated at fair value through profit or loss or other comprehensive income for the effective portion of the hedges.
The preparation of the financial statements requires Directors to make accounting estimates and in some cases assumptions in the application of accounting principles. The Management decisions are based on historical experience as well as on expectations associated with the realization of future events, considered reasonable under the circumstances. Critical accounting estimates and judgments are exercised in all areas of the business and are reviewed on an ongoing basis.
d'Amico International Shipping provides transportation services of refined petroleum products and vegetable oil, operating in only one business segment, Product Tankers. Furthermore, the Group only has one geographical segment, employing all its vessels worldwide, rather than in specific geographical areas. The Group's top management monitors, evaluates and allocates the Group's resources across the whole fleet, operations are run in one single currency – the US\$ – and DIS considers, therefore, the product tankers business as a single segment.
The accounting policies adopted are consistent with those of the previous financial year.
There were no new or amended accounting standards having a material impact on the condensed consolidated interim financial statements of the DIS Group.
Based on current assessments, the accounting standards issued and not yet applied are not expected to have a material impact on the condensed consolidated interim financial statements of the DIS Group.
US\$ LIBOR rates for periods of 3 months and 6 months, which have been the reference rates for all of our mortgage loans, are not published anymore from 30 June 2023. All our loans have therefore transitioned to the Secured Overnight Financing Rate (SOFR), the new risk-free reference rate, which can either be based on the Term SOFR, or the Cumulative Compounded SOFR in arrears. Effective hedges can be performed for loans linked to both the Term SOFR and the Cumulative Compounded SOFR in arrears (please refer to note n. 19 of our 2022 annual report for more details relating to the transition to SOFR).
The Group is currently involved in a number of on-going commercial disputes concerning both our owned and chartered-in vessels. The majority are cargo contamination claims. The disputes are mostly covered by insurance policies with the Group's P&I Club and therefore are not expected to generate any significant financial exposure.
All of the Group's Irish operating companies are qualified to be taxed under the Tonnage Tax regime in Ireland. The regime includes a provision whereby a proportion of capital allowances previously claimed by the Group may be subject to tax in the event that vessels are sold, or the Group fails to comply with the ongoing requirements to remain within the regime.
9 November 2023
The manager responsible for preparing the company's financial reports, Mr. Antonio Carlos Balestra di Mottola, in his capacity as Chief Financial Officer of d'Amico International Shipping SA (the "Company") declares to the best of his knowledge, that the nine months and third quarter 2023 financial statements prepared in accordance with the applicable set of accounting standards as published in this report, give a true and fair view of the assets, liabilities, financial position and income statement of the Company and its consolidated subsidiaries and that the interim management report includes a fair review of the development and performance of the business and the position of the Company and its consolidated subsidiaries, together with a description of the principal risks and uncertainties that they face.
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