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Concordia Maritime

Quarterly Report Nov 3, 2021

3146_10-q_2021-11-03_79e5c946-d4b1-4bf9-9973-c8f623ac677b.pdf

Quarterly Report

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Interim report, 1 January–30 September 2021

Secured earnings and improved loan terms

  • Total income Q3 SEK 165.6 (210.7) million 9 months SEK 553.6 (860.1) million
  • EBITDA Q3 SEK –56.8 (45.1) million 9 months SEK –119.1 (282.4) million
  • Result before tax Q3 SEK –141.4 (–35.9) million 9 months SEK –350.0 (21.4) million
  • Result per share after tax Q3 SEK –2.96 (–0.75) 9 months SEK –7.39 (0.45)

Events in the third quarter

  • Activities aimed at strengthening Concordia Maritime's financial position and liquidity, including time charters for the P-MAX vessels and divestment of the IMOIIMAX vessels
  • Agreement with lending banks on new terms and conditions for eight of the Company's ten P-MAX vessels

Events after the end of the quarter

Agreement with lending banks on new terms and conditions for two of the Company's ten P-MAX vessels

Quarter 3 (Jul–Sep) 9 months (Jan–Sep) Full year
Key figures 2021 2020 2021 2020 2020
Total income, SEK million 165.6 210.7 553.6 860.1 1,025.8
EBITDA, SEK million –56.8 45.1 –119.1 282.4 277.8
EBITDA, USD million –6.6 5.5 –14.0 30.1 30.2
Operating result, SEK million –117.5 –14.0 –293.5 92.5 32.6
Result before tax, SEK million –141.4 –35.9 –350.0 21.4 –65.1
Result after tax, SEK million –141.4 –35.9 –352.6 21.4 –66.0
Equity ratio, % 25 31 25 31 28
Return on equity, % neg 0 neg 0 neg
Available liquid funds, including
unutilised credit facilities, SEK million
70.0 438.5 70.0 438.5 378.0
Result per share after tax, SEK –2.96 –0.75 –7.39 0.45 –1.38
Equity per share, SEK 12.49 21.18 12.49 21.18 16.66
Lost-time injuries 0 0 0 1 2

Accounting policies, see page 20. Definitions, see page 18.

Strong demand for oil leads to increased activity in the tanker market

The tanker transport market remained very weak in the third quarter, which is also reflected in the quarter's results. However, rising demand for oil and a gradual increase in oil production have recently led to a slight increase in activity – notably in the crude oil segment.

The Extraordinary General Meeting held in mid-August unanimously approved the proposed measures put forward by the Board and management. These included contracting out the P-MAX vessels to Stena Bulk on a five-year charter. The contract guarantees a base rate of USD 15,500 per vessel and day. Additional income may be generated from profit-sharing and/or divestment of vessels. In turn, the vessel charters made it possible to arrange the new loan term agreements for the Company's ten P-MAX vessels, which were entered into with lending banks in September and November.

As a further step in the process of strengthening the Company's liquidity, the two IMOIIMAX vessels were sold during the quarter.

P-MAX fleet on new contracts

The P-MAX vessels were gradually transferred to the new charter contract with Stena Bulk during the quarter. However, as most of the deliveries took place in September, the higher earnings from this contract have only had a minor impact on the accounts for the quarter. Result before tax for the quarter was SEK –141.4 (–35.9) million. EBITDA was SEK –56.8 (45.1) million, corresponding to USD –7.5 (5.5) million. The result was adversely affected by a loss of income due to a large number of docking days and a book loss on the sale of the IMOIIMAX vessels. However, the cash effect of the vessel sale was positive.

High oil demand and soaring oil prices

Looking at market development, we can see that global demand for oil continues to grow at a rapid pace. Since April 2021, it has increased by about 5 million barrels per day. Production has also increased, but not at nearly the same rate. The imbalance between consumption and production has led to continued stock withdrawals close to consuming countries – which is one of the main reasons for the weak tanker market. The decision by OPEC+ to boost output by about 400,000 barrels per day per month starting in August is a step in the right direction but has not yet had a substantial impact on the tanker market as a whole. However, we are seeing a recent strengthening, albeit from low levels, in individual segments, in particular Suezmax.

The increased demand for oil is also evident in the sharp rise in oil prices. The price of Brent oil has more than doubled over the last year and is at about USD 85 per barrel at the time of writing, in early November.

Continued volatility – but gradual improvement

The imbalance that is currently affecting the market is not tenable in the long term. Consumption of oil is expected to continue rising and is likely to be back at pre-Covid levels by the end of the year. At the same time, oil stocks are now at levels well below the five-year average and production needs to increase if the price of oil is not to exceed USD 100 per barrel. And with increased production comes increased shipping demand. In addition, we are facing a winter season, where cold, ice and severe weather are likely to result in local increases in freight rates. We have already seen examples of weather-related delays in the Bosphorus.

So it now looks as though our previously communicated belief in a gradual market improvement is finally coming true. Certainly later than we thought – but still very good to be able to say.

Looking at supply, net fleet growth is expected to be at a record low level in the period ahead. Growth in 2022 is expected to be 2 percent, the lowest in a long time. All in all, this creates the opportunity for significant leverage going forward.

So the market has finally started to move – still from low levels, but nevertheless small steps in the right direction.

Gothenburg, November 2021 Kim Ullman, President

Business activities

Spot market earnings per day for the product tanker fleet in the third quarter of 2021 were USD 12,400 (14,500). This was USD 6,600 higher than average earnings per day for the market1), which were USD 5,800 (9,100). The Suezmax fleet's earnings per day in the quarter were USD 9,700 (12,100), compared with average earnings per day for the market2) of USD 4,200 (12,200).

The product tanker fleet

The ten 65,200 dwt P-MAX tankers are the backbone of Concordia Maritime's fleet. During the quarter, a five-year charter contract was signed with Stena Bulk and all vessels were employed under the contract at the end of the quarter. More about the agreement can be found on page 6 and on the Company's website: concordiamaritime.com.

Earnings

Average earnings per day for the entire product tanker fleet, spot and TC, during the quarter were USD 13,900 (15,000). For the first three quarters, average earnings per day for the entire product tanker fleet, spot and TC, were USD 13,300 (17,400). For vessels employed in the spot market, average earnings per day for the first three quarters were USD 11,700 (17,600).

Suezmax fleet

During the quarter, the Suezmax fleet consisted of the Suezmax tanker Stena Supreme (158,000 dwt), which is on a long-term charter, and shares in three vessels on shortterm contracts. The latter are joint charters with Stena Bulk,

1) Clarksons w.w. average MR Clean Earnings

and Concordia Maritime's share is 50 percent for two of the vessels and 33 percent for the other. All the vessels were employed in the spot market via Stena Sonangol Suezmax Pool, controlled by Stena and the Angolan state oil company Sonangol.

Earnings

Average earnings per day for the Suezmax fleet were USD 9,700 (26,200) for the quarter and USD 11,700 (40,900) for the first three quarters

Repairs and drydock

Two scheduled drydockings were completed during the quarter.

Current status of contracted freights Q4 2021,

3 November* Total number Share of Average
of available chartered earnings
charter days days (%) (\$/day)
Suezmax, spot 114 31 9,900

The contracted average earnings are based on initial projections, which may change considerably during the course of an individual voyage. This means that the final accounting result may differ materially from the average earnings stated above.

* The Product tanker vessel type is excluded from the table as all vessels are out on time charters.

2) Clarksons w.w. average Suezmax Long Run Historical Earnings

Earnings, spot

Average earnings,
Concordia Maritime
Average earnings,
market1, 2)
USD per day Number
of ships
Q3
2021
Q3
2020
9 months
2021
9 months
2020
Q3
2021
Q3
2020
9 months
2021
9 months
2020
Product tankers 8 12,400 14,500 11,700 17,600 5,800 9,100 6,300 18,200
Suezmax 2.7 9,700 26,200 11,700 40,900 4,200 12,200 6,200 38,200

1) Clarksons w.w. average MR Clean Earnings

2) Clarksons w.w. average Suezmax Long Run Historical Earnings

Concordia Maritime's spot market product tanker fleet performed above Clarksons theoretical index during the quarter. Concordia Maritime's earnings in the Suezmax segment were higher than the index, which shows that the Stena Sonangol pool remains one of the industry's leaders.

EBITDA per quarter

USD millions Q3
2021
Q2
2021
Q1
2021
Q4
2020
Q3
2020
Q2
2020
Q1
2020
Q4
2019
Product tankers, time charter 6.4 4.4 4.5 4.6 4.5 4.2 4.6 1.5
Product tankers, spot, owned and leased tonnage –6.54) –3.63) –7.62) –2.0 0.3 5.2 5.5 3.11)
Product tankers, spot, short-term chartered tonnage 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
Sale of vessels –3.6
Product tankers, total –3.7 0.8 –3.1 2.6 4.9 9.3 10.1 4.7
Suezmax, spot, owned and leased tonnage –0.1 0.2 0.3 0.1 1.4 3.4 3.6 3.1
Suezmax, spot, short-term chartered tonnage –2.0 –2.0 –1.8 –1.8 0.0 0.0 0.0 0.0
Sale of vessels
Suezmax, total –2.1 –1.8 –1.5 –1.7 1.4 3.4 3.6 3.1
Admin. and other –0.8 –1.0 –0.8 –0.8 –0.7 –1.0 –0.9 –1.3
Total –6.6 –2.0 –5.4 0.1 5.5 11.8 12.7 6.5

1) The total includes a negative bunker hedge of USD –0.5 million. 2) The total includes a negative bunker hedge of USD –2.9 million.

3) The total includes a negative bunker hedge of USD –1.9 million. 4) The total includes a negative bunker hedge of USD –0.3 million.

Earnings per vessel category

Q3
9 months
Full year
SEK millions 2021 2020 2021 2020 2020
Product tankers, time charter 74.2 63.8 196.0 201.9 262.2
Product tankers, spot 72.7 126.3 289.3 552.9 638.0
Product tankers, total earnings 146.9 190.0 485.3 754.8 900.2
Suezmax, spot 18.7 20.6 68.3 105.2 122.8
Suezmax, total earnings 18.7 20.6 68.3 105.2 122.8
Other 0.0 0.1 0.0 0.1 2.9
Total income 165.6 210.7 553.6 860.1 1,025.8

Newbuilding prices

At the end of the quarter, the price of a standard product tanker was about USD 40 million. The price of a standard suezmax tanker at the end of the quarter was about USD 74 million. The charts show the value at the end of each period and refer to standard vessels.

Source: Clarkson

Scrapping and deliveries

Deliveries of new vessels during the quarter were at about the same level as in the previous quarter. At the same time, phasing-out through scrapping increased.

Source: Clarkson

Financial summary

Result

Result after tax for the quarter was SEK –141.4 (–35.9) million. The weak tanker market during the quarter meant low earnings for the spot market vessels. Costs for ongoing operation and administration are higher than for the same period the previous year due to a larger number of chartered-in vessels.

Equity

Equity per share was SEK 12.49 (21.18).

Changes in translation and hedging reserves

The Parent Company's functional currency is SEK, but the majority of the transactions in the Group are in USD. The Group's result is generated in USD, which means the result in SEK is a direct function of the SEK/USD exchange rate trend.

The closing amount in the hedging reserve at the end of the quarter was SEK 2.0 (–60.5) million. The closing balance for the translation reserve in equity amounted to SEK 452.2 (492.3) million at the reporting date. The changes are recognised in equity through OCI.

Liquidity

Concordia Maritime's available liquid funds have been significantly reduced during the year due to planned investments such as the installation of statutory ballast water treatment systems and the withdrawal of credit facilities, while operating income has been low as a result of the current market situation. Available liquid funds including unutilised credit facilities amounted to SEK 378.0 million at the end of 2020 and SEK 70.0 million at the end of Q3 2021.

Investments and deposits

Investments in property, plant and equipment during the quarter amounted to SEK 86.5 (36.6) million. Investments are related to purchases for drydock work completed during the quarter and scheduled in 2021. The two IMOIIMAX vessels were sold during the quarter, generating cash proceeds of USD 5.2 million and a net book loss of SEK –30.3 million. During the quarter, Concordia Maritime did not buy or sell any assets classified as short-term investments in the Company's balance sheet.

Bunker hedge

Concordia Maritime's bunker hedge of 32,550 tonnes, effective October 2021 to May 2022, was closed during the quarter.

Hedge accounting is applied for the bunker hedge, and the fair value is recognised in other comprehensive income. A fair value change of SEK 17.1 million for this position was reported in OCI during the quarter. The realised values are recognised in the Company's income statement at maturity. Realised values of SEK –2.7 (0.0) million were recognised in operating expenses during the quarter.

Positions

At the end of the quarter, the Company had FFA positions for the period October 2021 to March 2022. These were valued at SEK 23.0 thousand and are reported in the Company's income statement.

Measures to strengthen the Company's financial position and liquidity

At the EGM of Concordia Maritime AB (publ) on 12 August 2021, it was decided, in accordance with the Board's proposal, to approve the agreement with Stena Bulk AB on time chartering of all ten of the Company's P-MAX product tankers ("the time charter") and the guarantee agreement whereby Stena Sessan AB guarantees to pay the banks up to USD 10 million on behalf of Concordia under certain circumstances("the guarantee").

The time charter ensures stable income over a five-year period. In addition, it enables Concordia Maritime to take advantage of the previously communicated expected market improvement through the profit-sharing offered by the contract. Concordia also has the right to divest the entire fleet or parts thereof during the charter period, without any fees. The aim is to dispose of vessels when the tanker market strengthens so that the Company's liquidity and freedom of action can be improved.

Agreements on new loan terms

Agreements on new loan terms were entered into with lending banks in September 2021. The main elements of the agreements are lower repayment rates and new covenant levels. The agreements cover eight of the Company's ten P-MAX vessels. Concordia Maritime also entered into binding agreements on similar loan terms with the lender for the Company's remaining two P-MAX vessels in early November 2021.

Continued work ahead

Efforts to strengthen the Company's financial position and liquidity will continue. The combination of a lack of vessel sales, increased daily costs or other unforeseen events and continued weak market conditions could put Concordia Maritime at risk of needing to obtain additional credit or strengthen its financial position in some other way.

Valuation of the fleet

The Group's standard process is to conduct six-monthly assessments of the fleet to determine whether there is any indication of impairment. The fleet is defined as two cash-generating units, with product tankers representing one unit and suezmax another unit. An impairment loss is recognised when the carrying amount of an asset or cash-generating unit exceeds its recoverable amount. The recoverable amount is the higher of fair value (external valuations) and value in use (future discounted cash flows). At the end of Q3 2021, the cash-generating units' carrying amounts did not exceed their recoverable amounts and no impairment was therefore recognised.

Seasonal variations

At the end of the quarter, 1.3 vessels in the sailing fleet of 12.3 (10 owned, 1 on a bareboat contract and 1.3 vessels on short time charters) were employed in the spot market. Earnings for the vessels that are not signed out to time charters are related to the freight level on the open market.

Employees

The number of employees in the Group on 30 September 2021 was 3 (3). The Group employed 596 (584) temporary seagoing employees through Stena Sphere's manning company. The number of temporary seagoing employees has increased compared with the same period in 2020. This is due to cabotage trade in Brazil, which requires a certain percentage of the crew to be Brazilian. Another reason for the increase is inefficient crew changes during the period due to Covid-19.

Parent Company

The Parent Company's sales for the quarter amounted to SEK 11.4 (0.4) million, with intragroup invoicing representing SEK 0.0 (0.0) million of this amount. The Parent Company's available liquid funds at the end of the quarter amounted to SEK 50.6 (953.0) million, which includes receivables from Group companies in the cash pool and unutilised credit facilities.

Operational challenges

Due to Covid-19, the Company has been unable to carry out crew changes as normal during the quarter. Crew safety comes first and crew changes are carried out when possible.

The Group's total income and earnings

Q3 Full year
SEK millions 2021 2020 2020
Total income1) 165.6 210.7 1,025.8
Operating result –117.5 –14.0 32.6
Result before tax –141.4 –35.9 –65.1
Result per share
after tax, SEK
–2.96 –0.75 –1.38

Liquidity and financial position

SEK millions 30 Sep
2021
30 Sep
2020
Available liquid funds2) 70.0 438.5
Interest-bearing liabilities 1,587.1 2,047.9
Equity 596.2 1,011.0
Equity ratio, % 25 31

Translation difference3)

As a result of the SEK/USD exchange rate, the Company's profit in SEK has changed, while profit in USD remains unchanged.

1) Accounting policies, see page 20.

2) Including unutilised available credit facilities but not short-term investments. 3) The change is reported in OCI.

Concordia Maritime's contribution to more sustainable tanker shipping

Concordia Maritime conducts long-term sustainability work which is based on three focus areas that the Company considers most important and where there is greatest potential for influence.

Providing safe tanker transport

Concordia Maritime's operations must be conducted in a manner that protects employees, the environment and vessels. A strong safety culture at all levels of the organisation is needed in order to minimise the risk of accidents and incidents.

Reducing our environmental impact

Concordia Maritime is strongly committed to reducing the impact of its operations on the environment. Continuous work to reduce emissions and increase energy efficiency is conducted within the organisation and with other stakeholders.

Taking our responsibility for employees and society

3

2

1

Concordia Maritime is a responsible employer and community participant, promoting good working conditions, equality, human rights and anti-corruption.

Principles and guidelines

A clear framework sets out the guidelines on how Concordia Maritime should act as a responsible company and employer.

Partnerships and collaboration Influence is exerted by working closely with partners and other forms of collaboration.

Monitoring and controls

A structured approach to monitoring and controls creates conditions for measuring and improving the Company's sustainability performance.

Sustainable tanker shipping

Sustainability report

None of Concordia Maritime's vessels were involved in any incident that resulted in discharges of bunker oil or cargo during the quarter. We are proud that no workplace incidents were reported on our vessels during the quarter. However, there were two minor incidents classified as RWC (restricted work case) during the quarter. During a dry-docking operation in Portugal, a crew member tripped and fell, injuring a finger. The crew member will be given easier tasks on board and will make a full recovery. The second minor accident happened on Stena Primorsk when a crew member suffered a sprained ankle. This crew member will also make a full recovery.

The Company strongly encourages the reporting of any risks on board our vessels. A high level of alertness and a well structured safety approach has meant that we have reported two high potential near misses during the quarter. One occurred on Stena Premium while docking. It was then discovered that a lifeboat cable was corroded and needed to be replaced. The other happened on Stena Important while picking up a pilot. Miscommunication between the pilot and the vessel meant that the vessel came into very easy contact with a buoy. There was no damage to either the vessel or the buoy.

None of Concordia Maritime's vessels were involved in any piracy-related incidents during the quarter.

External controls

Eight vetting inspections were conducted during the quarter. There were 14 observations recorded during these inspections, resulting in an average of 1.75 observations per inspection. A total of 33 vetting inspections were conducted in the full year 2020. There were 83 observations recorded during these inspections, resulting in an average of 2.5 observations per inspection. No port state control resulted in the detention in port of any Concordia Maritime vessel during the quarter.

Energy management

The Company's fleet of owned vessels decreased its bunker consumption by 31% in Q3 2021 compared with Q3 2020, which is due to several vessels being docked during the quarter. The quarter's EEOI (energy efficiency operational indicator), which measures vessels' energy efficiency and CO2 emissions, improved for the P-MAX fleet, while a deterioration was noted for our two IMOIIMAX vessels and the Company's leased Suezmax vessels.

Key figures

Safety

Q3 2021 Q3 2020 9 months 2021 9 months 2020 Full year 2020 Target 2021
LTI 0 0 0 1 2 0
LTIF 0 0 0 0.89 0.72 0
Number of inspections with more than
5 observations (owned vessels)
1 0 1 2 2 0
Average number of vetting observations
per inspection (owned vessels)
1.75 2.30 1.92 2.38 2.5 <4
Number of PSC inspections with detentions 0 0 0 0 0 0
Number of piracy-related incidents 0 0 0 1 1 0
Damage to property 0 1 1 2 3 0
Medical treatment case 0 0 0 0 0 0
Restricted work case 2 0 3 1 1 0
High potential near miss 2 1 4 1 3 0
High risk observation 0 0 0 0 0 0

Environmental impact

Q3 2021 Q3 2020 9 months 2021 9 months 2020 Full year 2020
Bunker consumption (tonnes)
LSFO 15,199 20,762 54,905 59,282 79,399
MGO 2,763 5,681 10,586 17,139 20,407
Total 17,962 26,443 65,491 76,421 99,806
Emissions (tonnes)
CO2 56,191 80,950 204,936 239,554 312,680
SOx 154 214 558 642 847
NOx 1,607 2,312 5,860 6,837 8,930
Particulates 12.1 26.4 69.2 76.5 102
Efficiency (EEOI)
gCO2/tonne-NM 11.65 11.02 11.25 11.02 11.16
Oil spills, litres 0 0 0 0 0

Definitions, see page 18.

Framework and guidelines

In addition to internal regulations, Concordia Maritime follows a number of international frameworks and principles.

Global Compact

Concordia Maritime is a member of the UN Global Compact Initiative and follows the Universal Declaration of Human Rights. The corporate members undertake to comply with ten principles on human rights, environment, labour and anti-corruption, and to respect them throughout the value chain.

MACN

In 2016, Concordia Maritime became a member of the Maritime Anti-Corruption Network (MACN), an international initiative created by maritime industry players to share experiences and promote best practice in combating all forms of corruption and bribery.

OECD guidelines

Concordia Maritime complies with the OECD guidelines for multinational enterprises. The guidelines deal with how these enterprises are to relate to human rights, environment and labour.

ILO's Fundamental Conventions

Concordia Maritime complies with the International Labour Organization's (ILO) eight fundamental conventions, which represent a minimum global standard for labour. The conventions address fundamental human rights at work.

World Ocean Council

Concordia Maritime is a member of the World Ocean Council, a global organisation consisting of shipping-related businesses that want to join together in taking responsibility for the world's ocean.

UN's Sustainable Development Goals

Concordia Maritime sees the goals as a shared commitment that requires cooperation between governments, companies and society at large. We fully support the 17 goals and believe that they have the potential to contribute to more sustainable development – both for society at large and individual companies and businesses.

Follow the market's development at www.concordiamaritime.com

The market for transportation of crude oil and refined oil products is in an exciting phase. Continuous updates and analysis of developments can be found on Concordia Maritime's website.

Income statement Group

SEK millions Q3 2021 Q3 2020 9 months 2021 9 months 2020 Full year 2020
Consolidated income statement
Average exchange rate SEK/USD 8.65 8.87 8.49 9.40 9.20
Time charter income, leasing of vessels 27.1 23.3 71.5 73.7 95.7
Time charter income, operational services 47.1 40.5 124.5 128.2 166.5
Spot charter income1) 91.4 146.9 357.6 658.1 760.7
Other income 0.0 0.1 0.0 0.1 2.9
Total revenue 165.6 210.7 553.6 860.1 1,025.8
Voyage-related operating costs –38.5 –54.2 –197.6 –232.7 –274.3
Operating costs, ships1) –92.7 –45.5 –262.1 –142.7 –207.9
Personnel costs, temporary seagoing –50.7 –54.4 –148.4 –159.3 –210.3
Personnel costs, land-based –2.9 –3.9 –10.9 –11.6 –16.0
Other external expenses –37.52) –7.6 –53.72) –31.3 –39.6
Depreciation/impairment –60.7 –59.2 –174.4 –189.9 –245.2
Total operating costs1) –283.1 –224.8 –847.1 –767.6 –993.2
Operating result –117.5 –14.0 –293.5 92.5 32.6
Interest and similar income 6.3 –2.5 8.6 4.3 5.8
Interest and similar expense –30.2 –19.4 –65.0 –75.5 –103.5
Financial net –24.0 –21.9 –56.5 –71.2 –97.7
Result before tax –141.4 –35.9 –350.0 21.4 –65.1
Tax 0.0 0.0 –2.5 0.0 –0.9
Result after tax –141.4 –35.9 –352.6 21.4 –66.0

1) Accounting policies, see page 20.

2) Amount includes net loss of SEK –30.3 (0,0) million on vessel sales.

Other comprehensive income

SEK millions Q3 2021 Q3 2020 9 months 2021 9 months 2020 Full year 2020
Result after tax –141.4 –35.9 –352.6 21.4 –66.0
Items that have been/can be transferred to result for the period
Translation differences 17.4 –20.0 40.5 –38.9 –119.6
Changes in fair value of cash flow hedges for the period 17.1 –10.0 69.9 –22.8 –72.3
Changes in fair value of cash flow hedges transferred to result for the period 2.7 0.6 43.0 –1.2 –3.5
Items that cannot be transferred to result for the year
Changes in the fair value of equity instruments at fair value through OCI 0.0 0.4 0.0 –1.8 0.9
Comprehensive income for the period –103.9 –64.9 –198.9 –43.2 –260.6

Per-share data

Q3 2021 Q3 2020 9 months 2021 9 months 2020 Full year 2020
Number of shares 47,729,798 47,729,798 47,729,798 47,729,798 47,729,798
Result per share, before/after dilution –2.96 –0.75 –7.39 0.45 –1.38
Equity per share, SEK 12.49 21.18 12.49 21.18 16.66

Condensed balance sheet Group

SEK millions 30 Sep 2021 30 Sep 2020 31 Dec 2020
Closing exchange rate SEK/USD 8.76 8.96 8.23
Assets
Ships and equipment1) 2,252.9 2,820.1 2,599.1
Financial assets 1.7 0.0 0.0
Total non-current assets 2,254.5 2,820.1 2,599.1
Current receivables 130.2 167.0 145.2
Short-term deposits 0.0 1.6 0.0
Cash and bank balances2) 34.5 262.8 130.2
Total current assets 164.7 431.4 275.5
Total assets 2,419.3 3,251.5 2,874.6
Equity and liabilities
Equity 596.2 1,011.0 795.0
Non-current liabilities 1,439.2 1,759.2 1,627.8
Current liabilities 383.9 481.3 451.8
Total equity and liabilities 2,419.3 3,251.5 2,874.6

1) Including right-of-use assets of SEK 390.9 (1,826.9) million. 2) Including restricted funds of SEK 0 (0) million.

Changes in equity

SEK millions Share
capital
Other
paid-in
capital
Translation
reserve
Hedging
reserve
Fair value
reserve
Retained
earnings
Total
Changes Jan-Sep 2021
Opening balance 01.01.2021 381.8 61.9 411.5 –110.9 0.0 50.7 795.1
Comprehensive income
for the period
40.7 112.9 0.0 –352.6 –198.9
Closing balance 30.09.2021 381.8 61.9 452.2 2.0 0.0 –301.8 596.1
Changes Jan-Sep 2020
Opening balance 01.01.2020 381.8 61.9 531.2 –35.1 –2.2 118.1 1,055.6
Comprehensive income
for the period
–38.9 –25.4 –1.8 21.4 –44.7
Closing balance 30.09.2020 381.8 61.9 492.3 –60.5 –4.0 139.4 1,011.0

Condensed cash flow statement Group

SEK millions Q3 2021 Q3 2020 9 months 2021 9 months 2020 Full year 2020
Operating activities
Result before tax –141.4 –35.9 –350.0 21.4 –66.0
Adjustments:
Depreciation/impairment 60.7 59.2 174.4 189.9 245.2
Other items 65.9 –62.3 103.1 –71.0 –176.2
Cash flow from operating activities before changes in working capital –17.3 –39.1 –74.8 140.2 3.0
Changes in working capital 27.5 60.3 110.9 224.9 300.0
Cash flow from operating activities 10.2 21.2 36.2 365.2 303.0
Investing activities
Sale of non-current assets 487.4 0.0 487.4 0.0 0.0
Investment in non-current assets –86.5 –36.6 –200.4 –75.3 –140.9
Sale of financial assets 0.0 0.0 0.0 0.0 3.4
Investment in financial assets 0.0 0.0 0.0 0.0 0.0
Other financial items 0.0 0.0 0.0 0.1 0.0
Cash flow from investing activities 401.0 –36.7 287.0 –75.2 –137.5
Financing activities
New loans 52.0 0.0 194.7 0.0 59.5
Amortisation of loans –20.6 –44.8 –83.9 –198.3 –239.3
Dividend to shareholders 0.0 0.0 0.0 0.0 0.0
Other financing –463.3 –19.1 –534.8 –44.9 –73.7
Cash flow from financing activities –431.9 –63.9 –424.0 –243.2 –253.5
Cash flow for the period –20.7 –79.3 –100.7 46.8 –87.9
Balance at beginning of period (Note 1) 51.6 345.3 130.2 227.7 227.8
Exchange differences (Note 2) 3.7 –3.2 5.1 –11.6 –9.5
Balance at end of period (Note 1) 34.5 262.8 34.5 262.8 130.2
Note 1. Balance consists of cash, bank balances and credit facility
Note 2. Exchange differences attributable to:
Cash and cash equivalents at beginning of year 3.2 –9.3 8.1 –10.3 –27.4
Cash flow for the period 0.4 6.1 3.0 –1.3 17.9
3.7 –3.2 5.1 –11.6 –9.5

Condensed income statement Parent Company

SEK millions 9 months 2021 9 months 2020
Net sales 42.3 2.0
Operating costs, ships –91.8 –3.4
Other external expenses –8.8 –11.4
Personnel expenses –7.5 –6.8
Operating result –65.8 –19.7
Result from subsidiaries 0.0 0.0
Other interest and similar income 96.1 72.4
Interest and similar expense –25.8 –65.7
Result before tax 4.6 –13.1
Tax 0.0 0.0
Result after tax 4.6 –13.1

Condensed balance sheet

SEK millions 30 September
2021
30 September
2020
Assets
Ships and equipment 0.0 0.0
Financial assets 1.7 0.0
Investments in Group companies 746.4 746.4
Non-current receivables, Group companies 898.3 0.0
Total non-current assets 1,646.4 746.5
Current receivables 9.4 13.3
Receivables from Group companies 12.4 966.9
Cash and bank balances1) 15.1 9.5
Total current assets 37.0 989.7
Total assets 1,683.4 1,736.2
Equity and liabilities
Equity 444.0 501.7
Non-current liabilities 937.5 956.3
Current liabilities 265.9 278.2
Total equity and liabilities 1,683.4 1,736.2

1) Including restricted funds of SEK 0 (0) million.

Risks and risk management

Concordia Maritime operates in an industry where demand for the Company's services is affected by business cycles and seasonal effects, as well as factors of a more temporary nature. This creates both business opportunities and risks, and the Company's ability to identify, assess, manage and monitor them is an important part of the governance and control of Concordia Maritime's business operations.

Concordia Maritime's risk work is aimed at creating good conditions, through well-considered risk-taking, for achieving the Company's business goals and upholding its ability to create long-term value for customers and owners. Risk work is based on an established framework that specifies acceptable levels of risk-taking. Risk-taking levels are determined by the Board.

The main risks associated with Concordia Maritime's operations and the industry – and which could have a significant negative impact on the Group's operations, strategy, profitability, cash flow, shareholder value or reputation – are divided into four categories. Sustainability risks are integrated into the risk categories.

Strategic risks are primarily external factors that could affect Concordia Maritime's operations. The Board and management have limited opportunity to control these

risks in the short term, but must still deal with them in the planning and governance of the operations. Strategic risks also include internal factors that could make it difficult to achieve the Company's overall business goals.

  • Operational risks are related to operating activities. These are risks that Concordia Maritime can largely control and prevent – either itself or through cooperation partners.
  • Compliance risks are related to the fact that Concordia Maritime operates in a global market and an industry that is subject many laws, regulations and rules on, for example, safety and the environment. The risks are associated with non-compliance, but also with the consequences of the Company adapting to, for example, stricter environmental legislation.
  • Financial risks include credit, currency and interest rate risks that may adversely affect the Company's results. See also "Measures to strengthen the Company's financial position and liquidity" under "Financial summary".

More information about risks and risk management can be found in Concordia Maritime's 2020 annual report, which is available at www.concordiamaritime.com.

CO2 Carbon dioxide.

CVC Consecutive Voyage Charter.

Damage to property

An event that results in damage to the vessel, and/ or vessel equipment costing more than USD 2,000 to repair (excludes system/equipment failure).

Depreciation

Accounting deductions made in the company's financial statements in order to compensate for wear and ageing of its vessels and equipment.

DWT Deadweight tonnage – a measure of a vessel's maximum weight capacity.

Energy Efficiency Operational Indicator (EEOI)

An operational measure to assess a vessel's energy efficiency and CO2 emissions.

FFA

Forward Freight Agreement - a financial contract entitling the holder to buy or sell freight prices at a future date.

High potential near miss

Incident that could have resulted in a serious accident.

HSFO High sulphur fuel oil.

LSFO Low sulphur fuel oil.

Lost-time injury (LTI)

An accident that results in an individual being unable to carry out his or her duties or return to work on a scheduled shift on the day after the injury, unless this is due to delays getting medical treatment ashore. Also includes fatalities.

Lost-time injury frequency (LTIF)

Safety performance measure which is the number of LTIs per million exposure hours in man-hours (LTIF = LTIs x 1,000,000/ exposure hours).

Medical treatment case (MTC)

Work-related injury requiring treatment by a doctor, dentist, surgeon or qualified health professional. MTC does not include LTI, RWC, hospitalisation for observation or a consultative examination by a doctor.

MGO Marine gas oil.

NOx Nitrogen oxides.

Restricted work case (RWC)

An injury that results in an individual being unable to carry out normal duties during a scheduled work shift or being temporarily or permanently assigned other duties on the day after the injury.

SOx Sulphur oxides.

Spot market (open market)

Chartering of vessels on a voyage-by-voyage basis, with freight rates fluctuating virtually daily. The shipowner pays for the bunker oil and port charges.

Time charter

The shipowner charters out its ship complete and crewed for a long period at fixed rates. The charterer

Definitions Alternative performance measures1)

Cash flow from operating activities

Result after financial net plus depreciation minus tax paid (cash flow before change in working capital and investments and before effect of ship sales). The Company believes that the key figure provides a deeper understanding of the Company's profitability.

EBITDA

Performance measure indicating operating result before interest, taxes, impairment, depreciation and amortisation. The Company believes that the key figure provides a deeper understanding of the Company's profitability.

Equity ratio

Equity as a percentage of total assets. The Company believes that the key figure makes it easier for investors to form a picture of the Company's capital structure.

Return on equity

Result after tax as an average of the last twelve months expressed as a percentage of average equity on a 12-month rolling basis. The Company believes that the key figure provides a deeper understanding of the Company's profitability.

Return on capital employed

Result after financial net plus finance costs as an average of the last twelve months expressed as a percentage of average capital employed on a 12-month rolling basis. Capital employed refers to total assets minus non-interest-bearing liabilities, including deferred tax liability. The Company

believes that the key figure provides a deeper understanding of the Company's profitability.

Return on total capital

Result after financial net plus finance costs as an average of the last twelve months expressed as a percentage of average total assets on a 12-month rolling basis. The Company believes that the key figure provides a deeper understanding of the Company's profitability.

pays for the bunker oil and port charges. 1) Alternative performance measures as defined by the European Securities and Markets Authority (ESMA)

Reconciliation of alternative performance measures

EBITDA

SEK millions Q3 2021 Q3 2020 9 months 2021 9 months 2020 Full year 2020
Operating result –117.5 –14.0 –293.5 92.5 32.6
Depreciation/impairment 60.7 59.2 174.4 189.9 245.2
EBITDA –56.8 45.1 –119.1 282.4 277.8

Return on total capital

SEK millions 9 months 2021 9 months 2020 Full year 2020
Result after financial net –374.2 –74.5 –65.1
Finance costs 93.1 169.7 103.5
Result after financial net plus finance costs –281.1 95.2 38.4
Total assets 2,791.8 3,554.7 3,343.2
Return on total capital –10.1% 2.7% 1.2%

Return on equity

SEK millions 9 months 2021 9 months 2020 Full year 2020
Result after tax –440.0 0.1 –66.0
Equity 713.9 1,060.4 995.2
Return on equity –61.6% 0.01% –6.6%

Equity ratio

SEK millions 9 months 2021 9 months 2020 Full year 2020
Equity 596.2 1,011.0 795.0
Total assets 2,419.3 3,251.5 2,874.6
Equity ratio 25% 31% 28%

Return on capital employed

SEK millions 9 months 2021 9 months 2020 Full year 2020
Result after financial net –374.2 0.3 –65.1
Finance costs 93.1 105.1 103.5
Result after financial net plus finance costs –281.1 105.4 38.4
Total assets 2,791.8 3,535.7 3,343.2
Non-interest-bearing liabilities –234.1 –211.5 –218.9
Capital employed 2,557.7 3,324.2 3,124.3
Return on capital employed –10.99% 3.2% 1.2%

Accounting policies

This interim financial report in summary for the Group has been prepared in accordance with IAS 34 Interim Financial Reporting and relevant provisions of the Swedish Annual Accounts Act. The interim report for the Parent Company has been prepared in accordance with chapter 9 of the Swedish Annual Accounts Act.

For the Group and Parent Company, the same accounting policies have been applied as in the most recent annual report.

The Concordia Maritime Group applies International Financial Reporting Standards (IFRS) as adopted by the EU. The Group applies the same accounting policies and calculation methods in the quarterly reports as in the annual report for 2020, in addition to those described in this report.

The Group's interim report has been prepared in accordance with IAS 34 and the Swedish Annual Accounts Act.

The report for the Parent Company has been prepared in accordance with the Swedish Annual Accounts Act. The Board of Directors and CEO confirm that the interim report provides a true and fair overview of the operations, financial position and performance of the Parent Company and Group, and describes material risks and uncertainties faced by the Parent Company and Group companies.

Gothenburg, 3 November 2021

Kim Ullman CEO

Audit review report

Concordia Maritime AB Corp. ID 556068-5819

Introduction

We have reviewed the condensed set of financial statements in the interim report for Concordia Maritime AB (publ) for the third quarter and the nine months ended 30 September 2021. The Board of Directors and CEO are responsible for the preparation and presentation of this interim financial report in accordance with IAS 34 and the Swedish Annual Accounts Act. Our responsibility is to express an opinion on this interim report based on our review.

Scope of the review

We conducted our review in accordance with the International Standard on Review Engagements, ISRE 2410 Review of Interim Financial Information Performed by the Independent Auditor of the Entity. A review consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with ISA and other generally accepted auditing standards in Sweden.

The procedures performed in a review do not enable us to obtain assurance that we would become aware of all significant matters that might be identified during an audit. Accordingly, we do not express an audit opinion.

Conclusion

Based on our review, nothing has come to our attention that causes us to believe that the interim financial report has not been prepared, in all material respects, in accordance with IAS 34 and the Swedish Annual Accounts Act for the Group and the Swedish Annual Accounts Act for the Parent Company.

Gothenburg, 3 November 2021 Öhrlings PricewaterhouseCoopers AB

Fredrik Göransson Authorised Public Accountant

Quarterly overview

SEK millions Q3 2021 Q2 2021 Q1 2021 Q4 2020 Q3 2020 Q2 2020 Q1 2020 Q4 2019
Profit/loss items
Total income1) 165.6 208.4 179.6 165.7 210.7 300.7 348.6 317.6
Operating costs excluding impairment1) –283.1 –282.7 –281.4 –225.7 –224.8 –252.2 –290.6 –320.9
Operating result (EBIT) –117.5 –74.2 –101.9 –59.9 –14.0 48.5 58.0 –3.3
of which result from sale of investments in jointly-controlled entities (vessels) 0.0 0.0
Financial net –24.0 –14.2 –18.3 –26.5 –21.9 –20.2 –29.0 –26.1
Result before tax –141.4 –88.4 –120.2 –86.5 –35.9 28.3 29.0 –29.3
Result after tax –141.4 –89.7 –121.4 –87.4 –35.9 28.3 29.0 –29.5
Cash flow from operating activities 10.2 6.3 19.7 –62.1 21.2 238.9 105.0 –44.2
EBITDA –56.8 –16.7 –45.7 –4.6 45.1 114.1 123.2 62.3
Balance-sheet items
Ships (number) 2,252.9 (11) 2,685.3 (13) 2,771.6 (13) 2,599.1 (13) 2,820.1 (13) 2,954.5 (13) 3,198.9 (13) 3,052.8 (13)
Ships under construction (number) 0 0 0 0 0 0 0 0
Liquid funds incl. investments 34.5 51.6 45.1 130.2 264.4 346.6 206.9 231.2
Other assets 131.9 156.7 166.1 145.2 167.0 167.0 372.6 349.5
Interest-bearing liabilities 1,587.1 1,963.8 1,968.1 1,656.5 2,047.9 2,199.6 2,407.0 2,446.7
Other liabilities and provisions 236.1 226.9 255.7 423.0 192.6 191.2 273.9 142.6
Equity 596.2 700.0 759.0 795.0 1,011.0 1,077.3 1,097.5 1,055.6
Total assets 2,419.3 2,890.7 2,982.8 2,874.6 3,251.5 3,468.2 3,778.4 3,644.9
Key figures, %
Equity ratio 25 24 25 28 31 31 29 29
Return on total capital –10 –4 –1 1 3 3 1 1
Return on capital employed –11 –5 –1 2 3 3 2 1
Return on equity –62 –41 –24 –7 0 0 –7 –9
Operating margin –87 –36 –57 –36 –7 16 17 –1
Share data
Total income1) 3.47 4.37 3.76 3.47 4.41 6.30 7.30 6.65
Operating costs excluding impairment –5.93 –5.92 –5.90 –4.73 –4.71 –5.28 –6.09 –6.72
Operating result –2.46 –1.55 –2.13 –1.26 –0.29 1.02 1.22 –0.07
Financial net –0.50 –0.30 –0.38 –0.56 –0.46 –0.42 –0.61 –0.55
Result after tax –2.96 –1.88 –2.54 –1.83 –0.75 0.59 0.61 –0.62
Cash flow from operating activities 0.21 0.13 0.41 1.30 0.44 5.01 2.20 –0.93
EBITDA –1.19 –0.35 –0.96 –0.10 0.95 2.39 2.58 1.30
Equity 12.49 14.67 15.90 16.66 21.18 22.57 22.99 22.12

Definitions, see page 18.

1) Accounting policies, see page 20.

Other information

Related party transactions

Concordia Maritime has a small internal organisation, and purchases services from related-party companies in Stena Sphere, which include Stena Bulk. The latter company conducts tanker business that coincides with Concordia Maritime in some respects. Accordingly, there is an agreement, entered into many years ago, which regulates the relationship between the two companies with respect to new business. Under the terms of this agreement, Concordia Maritime has the right to opt for 0, 50 or 100 percent participation in each new transaction (with the exception of shorter transactions of less than 12 months). From Q3 2021, all ten P-MAX vessels are on 5-year charters to Stena Bulk.

Stena Bulk

Stena Bulk specialises in transportation of refined petroleum products and vegetable oils. Under an agreement with Stena Bulk, Concordia Maritime is entitled to the financial result arising from vessels chartered in by Stena Bulk for a period of more than one year, should Concordia Maritime decide to participate in such charters. Other business generated by Stena Bulk is not available to Concordia Maritime.

Concordia Maritime purchases services on a regular basis from the Stena Sphere in the following areas

Vessel charter

Payment is based on commission on freight rates as follows: 1 percent for P-MAX, 1.25 percent for Suezmax and 2 percent for IMOIIMAX.

  • Commission on the purchase and sale of vessels Payment is based on a commission of 1 percent on freight rates.
  • Operation and manning of the Group's vessels (ship management)

Payment is based on a fixed price per year and vessel, with an additional payment for manning of vessels.

Commercial operation, administration, marketing, insurance, technical monitoring and development of Concordia Maritime's fleet Payment is based on a fixed price per month and vessel. With regard to technical consulting services for newbuild projects, an hourly rate is applied on a cost-plus basis, which is then charged to the project. All related party transactions are conducted on commercial terms and

Office rent and office services

A fixed annual price is charged.

Financing agreement

Concordia Maritime AB has been granted a credit facility under an agreement with AB Stena Finans. The Company has obtained financing for ballast water treatment installations under an agreement with Tritec Marine Ltd.

Purchase of services from Stena Sphere

Q3 9 months Full year
SEK MILLIONS 2021 2020 2021 2020 2020
Group 61.9 73.3 189.5 211.1 269.8
Parent Company 0.1 0.2 0.5 0.4 0.6

at market-related prices.

Contact

Kim Ullman, CEO Tel +46 31 85 50 03 or +46 704 85 50 03 kim.ullman@ concordiamaritime.com

Martin Nerfeldt, CFO

Tel +45 88 93 86 61 or +46 704 85 50 07 martin.nerfeldt@ concordiamaritime.com

Calendar

Q4 2021 10 February 2022
Q1 2022 and AGM 27 April 2022

Distribution For environmental reasons, our interim reports are only published digitally. Concordia Maritime's interim reports and additional financial information about the Company can be read or downloaded from concordiamaritime.com

This information is information that Concordia Maritime Aktiebolag (publ) is obliged to publish in accordance with the EU Market Abuse Regulation. The information was provided by the contact person above for publication on 3 November 2021 at 13.00 CET.

Fleet, 3 November 2021

Ships Employment Partner
Product tankers
P-MAX
Stena Premium Time charter to August 2026
Stena Polaris Time charter to August 2026
Stena Performance Time charter to August 2026
Stena Provence Time charter to August 2026
Stena Progress Time charter to August 2026
Stena Paris Time charter to August 2026
Stena Primorsk Time charter to August 2026
Stena Penguin Time charter to August 2026
Stena Perros Time charter to August 2026
Stena President Time charter to August 2026

Crude oil tankers

Suezmax

Stena Supreme1) Spot Stena Sonangol Suezmax Pool
0.5 unnamed vessel2) Spot Stena Sonangol Suezmax Pool

1) Contracted on a bareboat basis until 2028, with annual purchase options from 2019 2) 50% charter November 2020 – November 2021 Planned redelivery 4 November 2021

Concordia Maritime SE–405 19 Gothenburg, Sweden Tel +46 31 85 50 00 Corp. ID 556068-5819 www.concordiamaritime.com

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