Earnings Release • Jan 28, 2016
Earnings Release
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Delivery of IMOIIMAX vessel Stena Important.
P-MAX vessel Stena Primorsk chartered out. The contract is for two years and runs from late January/early February 2016.
Another P-MAX tanker chartered out over a longer period. The contract runs from February 2016, and is for one year with an option for a further year.
| Key ratios | |
|---|---|
| -- | ------------ |
| Q4 (Oct–Dec) | Full year | ||||
|---|---|---|---|---|---|
| 2015 | 2014 | 2015 | 2014 | ||
| Total income, SEK million | 217.6 | 125.7 | 810.0 | 531.2 | |
| EBITDA, SEK million | 117.3 | 42.9 | 423.8 | 214.7 | |
| EBITDA, USD million | 13.9 | 5.6 | 50.3 | 31.3 | |
| Operating result, SEK million | 57.6 | 2.2 | 209.6 | 56.4 | |
| Result after tax, SEK million | 49.4 | –16.6 | 173.9 | 8.7 | |
| Equity ratio, % | 43 | 42 | 43 | 42 | |
| Return on equity, % | 10 | 1 | 10 | 1 | |
| Available liquid funds, including unutilised credit facilities, SEK million |
367.1 | 233.5 | 367.1 | 233.5 | |
| Result per share after tax, SEK | 1.03 | –0.35 | 3.64 | 0.18 | |
| Equity per share, SEK | 39.15 | 32.99 | 39.15 | 32.99 |
The combination of a strong market, increased earning capacity and a successful chartering strategy contributed to making 2015 the best year for Concordia Maritime since 2001, if we exclude years with ship sales.
Overall, we are able to report a profit before tax of SEK 174.3 (16.5) million for the year. EBITDA was SEK 423.8 (214.7) million, corresponding to USD 50.3 (31.3) million. Result after tax for the fourth quarter amounted to SEK 49.8 (–12.7) million. EBITDA was SEK 117.3 (42.9) million, corresponding to USD 13.9 (5.6) million.
With hindsight, we can say that the year turned out as we expected – even rather better. Looking at the year as a whole, income in the MR and Suezmax segments was about 50 percent higher than in the previous year. The main driving forces included strong underlying demand for oil and petroleum products, driven in turn by low oil prices, and changes in the global refinery infrastructure. A contributing factor to the strong market for crude oil transportation is the overproduction of crude oil of 1.5–2.0 million barrels per day. In the crude oil segment, modest growth in the fleet also contributed to a good balance between supply and demand. Total seaborne transportation of oil products increased by just over 6 percent during the year, the strongest increase since 2006.
The fact that, for our part, we increased both EBITDA and result before tax is a direct consequence of both the strong market and proactive work on our fleet deployment. The strategy of employing the vessels on the open market proved absolutely right and this – together with an increased focus on niche trades – has contributed significantly to the positive trend.
The strong spot market in the latter part of 2014 and virtually the whole of 2015 has resulted in the time charter market also now strengthening. We chartered out a P-MAX tanker for two years at the end of the year and at the beginning of 2016, we chartered out another vessel for a year. Both contracts are fully in line with our chartering strategy. We ensure a good level of income for the vessels, while balancing the exposure to the spot market in a well-judged way.
Another factor behind these developments is an increased earning capacity – as a result of more vessels in the fleet. Overall growth in the fleet during the year, including vessels chartered in, was about 20 percent. The two new IMOIIMAX tankers, Stena Image and
Stena Important, have been very well received by the market and have performed above expectations. The transaction is a good example of ordering the right type of vessel at the right time and the right price. Trade in vessels, both purchases and sales, is an essential part of every shipping company's business model – and the ability to use the right timing cannot be emphasised enough.
During the fourth quarter discussions were initiated in order to start a settlement process regarding the dispute that arose from the grounding of Stena Primorsk in the Hudson River in December 2012. This will continue in the first quarter in 2016. More information can be found on page 6 of this interim report.
As we look back on the year, it should also be said that 2015 was another year in which we were spared from any serious incidents and accidents. Shipping is associated with risks for both people and the environment, but we do our utmost to minimise or eliminate them. Safe vessels, competent crews and well-developed procedures are the backbone of these efforts.
The market has continued to be strong in the early part of 2016 and our basic view of the year is positive. We expect the price of oil to remain low and continuing changes in the global refinery infrastructure to result in stable demand for transportation of oil and refined petroleum products. Relatively large numbers of new ships are expected to be delivered during the year, particularly crude oil tankers at the end of the year, but it is too early to speculate the extent to which these will affect the market.
Kim Ullman, CEO
Overall, 2015 was a strong year for both Concordia Maritime and the market as a whole. After a short seasonal decline in late summer and autumn, the market strengthened again in the fourth quarter.
The ten 65,200 dwt P-MAX tankers are the backbone of Concordia Maritime's fleet. During the period, eight of the vessels were employed in the spot market through agreements with Stena Bulk and Stena Weco. Stena Perros and Stena President were employed on time charters with Stena Bulk during the quarter. The contract expires at the end of January 2016.
At the beginning of the fourth quarter, the Company took delivery of the second of the two ordered IMOIIMAX vessels, Stena Important. Both vessels are employed via the cooperation with Stena Weco and have performed entirely according to plan during the period.
In November, a contract was signed for the charter of an IMO2/3 class MR tanker (ECO-design). The vessel will be chartered jointly with Stena Weco, and Concordia Maritime's share amounts to 50 percent. The contract, which runs from the end of November 2015, is for two years with an option for a further 1-6 months.
At the end of the year, a contract was signed to charter out the P-MAX tanker Stena Primorsk. The contract is for two years and runs from end January/beginning February 2016.
Average income for the entire product tanker fleet, spot and TC, during the fourth quarter was USD 20,000 (14,800) per day. For vessels employed on the spot market, average income for the quarter was USD 20,200 (16,000) for light products and USD 23,600 (13,000) for heavy products.
Looking at the full year, the average income for the entire product tanker fleet, spot and TC, was USD 20,100 (13,700) per day. For vessels employed on the spot market, average income for the year was USD 21,100 (13,400) for light products and USD 21,100 (14,100) for heavy products.
The suezmax tanker Stena Supreme (158,000 dwt) is employed on the spot market via Stena Sonangol Suezmax Pool, controlled by Stena and the Angolan state oil company Sonangol. The pool is a long-time market leader in terms of suezmax tanker income.
Average income for Stena Supreme was USD 40,100 (27,600) per day for the quarter and USD 40,900 (25,600) per day for the full year 2015.
In addition to Stena Supreme, Concordia Maritime also had positions in Stena Bulk's suezmax fleet, corresponding to 50 percent charters of two tankers, during the quarter. These vessels are also employed on the global open market through the Stena Sonangol Suezmax Pool. One of the contracts expired in December 2015, while the other runs until June 2016.
Stena Penguin went into drydock during the quarter. Stena Paris also entered drydock during the quarter (completed in the first quarter of 2016).
Concordia Maritime's product tanker fleet achieved a higher income than the Clarksons theoretical index in the fourth quarter of 2015. Real income and the index may differ slightly from quarter to quarter during the year, but Concordia Maritime's actual income for the full year is in line with the Clarksons theoretical index.
Source: Clarksons Average Suezmax Long Run Historical Earnings
Concordia Maritime's income in the suezmax segment for both the fourth quarter and full year 2015 is lower than the Clarksons theoretical index. However, in this comparison, it should be noted that the Clarksons index does not include waiting time or demurrage, i.e. the charge for time spent in port in excess of the contracted period, which pulls down income in a good market. When compared with other charter pools, the Stena Sonangol Pool is one of the industry's leaders.
| Average income, Concordia Maritime |
Average income, market |
|||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| USD per day | Number of vessels |
Q4 2015 | Q4 2014 | Full year 2015 |
Full year 2014 |
Q4 2015 | Q4 2014 | Full year 2015 |
Full year 2014 |
|
| Product tankers | 10 | 20,800 | 14,800 | 21,100 | 13,700 | 18,200 | 20,700 | 21,400 | 12,600 | |
| Suezmax | 2 | 39,000 | 27,600 | 39,500 | 25,600 | 52,300 | 40,850 | 46,700 | 27,800 | |
| EBITDA per quarter | Q4 | Q3 | Q2 | Q1 | Q4 | Q3 | Q2 | Q1 | ||
| USD millions | 2015 | 2015 | 2015 | 2015 | 2014 | 2014 | 2014 | 2014 | ||
| Product tankers, time charter | 1.3 | 1.2 | 1.1 | 1.5 | 0.5 | 0.5 | 1.7 | 2.71) | ||
| Product tankers, spot | 10.3 | 9.4 | 9.3 | 6.5 | 4.6 | 2.6 | 0.8 | 4.0 | ||
| Panamax | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 11.92) | 1.1 | ||
| Suezmax | 3.7 | 3.6 | 3.2 | 3.7 | 2.0 | 1.4 | 0.7 | 2.2 |
Admin. and other –1.4 –0.9 –1.1 –1.1 –1.4 –1.1 –1.4 –1.5 Total 13.9 13.3 12.5 10.6 5.7 3.4 13.7 8.5
1) Includes one-time payment of USD 1.3 million for redelivery of Stena Progress.
2) Includes one-time payment of USD 3.6 million for lost charter income in jointly-
controlled entities: Stena Poseidon and Palva. Includes result from sale of shares
in jointly-controlled entities (vessels) of USD 8.6 million.
At the end of December, the price of a standard product tanker was about USD 36 million. The price of an IMOII class MR tanker like the IMOIIMAX vessels we ordered was about USD 38 million. This is about 10 percent higher than when we placed our order with the shipyard in 2012. The price of a standard suezmax tanker at the end of the quarter was about USD 63 million.
The charts show the value at the end of each period and refer to standard vessels.
Source: Clarkson
Result after tax for 2015 was SEK 173.9 (8.7) million, which represents a strong improvement compared with 2014. The improvement is due to high demand for transportation of crude oil and petroleum products, resulting in significantly higher market rates in 2015. In addition, the company has taken delivery of two new IMOIIMAX vessels and this has also contributed to the improvement.
The improved result also generated a higher cash flow for 2015, which was SEK 129.3 (7.8) million.
Equity per share was SEK 39.15 (32.99).
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. In the third quarter of 2015, investments in foreign subsidiaries were partially hedged through the forward sale of USD 30 million as hedging instruments. The duration is two years and the amount corresponds to approx. 12% of foreign currency equity. If the hedge is effective, the change in value of the forward currency derivatives is reported in other comprehensive income, with the cumulative changes reported as a separate component of equity (translation reserve). This enables the translation differences arising from foreign operations to be partially offset. The accumulated translation differences, which are recognised in equity, amounted to SEK 406.2 (289.2) million. The changes are recognised in equity through OCI.
Investments during the quarter amounted to SEK 193.2 (54.0) million and for the full year 2015 the investments amounted to 459.3 (87.9) million. The investments were mainly related to payments for the two IMOIIMAX vessels delivered during 2015.
The Group's fleet is assessed on a six-monthly basis to determine whether there is any indication of impairment. The fleet is defined as a cash-generating unit, and 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). Impairment testing of the asset values at 31 December 2015 did not indicate any impairment.
Two vessels from our fleet of 14.0 vessels (13 owned and two on 50% charters) were out on time charters at the end of the quarter. The time charters for these two vessels expire in January 2016 and a new time charter for another vessel begins at the end of January/ beginning of February 2016. Other vessels were employed on the open market. This arrangement of the fleet means that income is affected by the seasonal variations that occur in tanker shipping.
The number of employees in the Group at 31 December 2015 was 6 (6). The Group employed 464 (404) temporary seagoing employees through Stena Sphere's manning company.
The parent company's sales for the fourth quarter amounted to SEK 10.6 (1.5) million, with intragroup invoicing accounting for SEK 2.7 (0.6) million of this amount. The parent company's investments during 2015 amounted to SEK 24.8 (2.0) million. Result before tax was SEK 69.8 (–67.1) million. The parent company's available liquid funds at 31 December 2015 amounted to SEK 1,581.8 (1,615.9) million, which includes receivables from Group companies in the cash pool and unutilised credit facilities.
Financial summary, cont'd
In July 2013, the company owning the vessel received an application for arbitration for the damage the customer believes the company has caused them in connection with Stena Primorsk's grounding in the Hudson River in December 2012 and the company's decision to stop operating the vessel in this shipping channel. In July 2013, the customer requested that the matter be settled by arbitration in the United States. The vessel owner strongly rejects the claim of approx. USD 21 million and is preparing for arbitration.
A discovery phase, in which both parties' standpoints and demands were examined carefully, was completed in the third quarter. During the fourth quarter discussions were initiated in order to start a settlement process. This will continue during the first quarter of 2016. If settlement is not reached, the process will be handled through arbitration, starting in the second quarter 2016, with a ruling likely at the end of the year or in the first quarter of 2017. The company's fees for legal and similar assistance regarding this matter are charged to the company's earnings as incurred.
As a result of the SEK/USD exchange rate, the company's profit in SEK has changed, while profit in USD remains unchanged.
| SEK millions | 31 Dec 2015 |
31 Dec 2014 |
|---|---|---|
| Available liquid funds1) | 367.1 | 233.5 |
| Interest-bearing liabilities | 2,387.2 | 2,038.9 |
| Equity | 1,868.7 | 1,574.7 |
| Equity ratio, % | 42.9 | 42.0 |
1) Includes unutilised available credit facilities.
| Quarter 4 | Full year | |||
|---|---|---|---|---|
| SEK millions | 2015 | 2014 | 2015 | 2014 |
| Total income | 217.6 | 125.7 | 810.0 | 531.2 |
| Operating result | 57.6 | 2.2 | 209.6 | 56.4 |
| Result before tax | 49.8 | –12.7 | 174.3 | 16.5 |
| Result per share after tax, SEK | 1.03 | –0.35 | 3.64 | 0.18 |
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 competes 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.
At the beginning of April 2011, Stena Bulk and the Danish company Weco started a 50-50 joint venture which resulted in a newly established company, Stena Weco, specialising in the transportation of vegetable oils. Under a new agreement with Stena Bulk, Concordia Maritime is entitled to the financial result arising from vessels that may from time to time be chartered in by Stena Weco for a period of more than one year, should Concordia Maritime decide to participate in such charters. Other business generated by Stena Weco is not available to Concordia Maritime.
Vessel charter
Payment is based on a commission of 1.25 percent on freight rates.
Payment is based on a fixed price per year and vessel.
Payment is based on a fixed price per month and vessel. With regard to technical consulting services for construction projects, an hourly rate is applied on a cost-plus basis, which is then charged to the project.
Office rent and office services. A fixed annual price is charged.
All related party transactions take place on commercial terms and at market-related prices.
| SEK millions | Quarter 4 2015 | Quarter 4 2014 | Full year 2015 | Full year 2014 |
|---|---|---|---|---|
| Consolidated income statement | ||||
| Average exchange rate SEK/USD | 8.49 | 7.42 | 8.44 | 6.86 |
| Time charter income | 24.9 | 15.7 | 101.2 | 119.4 |
| Spot charter income | 192.6 | 107.0 | 708.7 | 351.2 |
| Result from sale of investments in jointly-controlled entities | 0 | 0 | 0 | 57.4 |
| Other external income | 0 | 3.1 | 0 | 3.2 |
| Total income | 217.6 | 125.7 | 810.0 | 531.2 |
| Operating costs, ships | –36.5 | –28.8 | –142.8 | –123.3 |
| Personnel costs, temporary seagoing | –46.1 | –37.3 | –179.3 | –138.0 |
| Personnel costs, land-based | –6.8 | –4.9 | –21.5 | –17.0 |
| Other external expenses | –10.8 | –11.7 | –42.5 | –38.0 |
| Depreciation | –59.7 | –40.9 | –214.2 | –158.4 |
| Total operating costs | –159.9 | –123.6 | –600.3 | –474.8 |
| Operating result | 57.6 | 2.2 | 209.6 | 56.4 |
| Interest and similar income | 2.4 | 0.1 | 3.1 | 5.6 |
| Interest and similar expense | –10.2 | –15.0 | –38.4 | –45.4 |
| Financial net | –7.8 | –14.9 | –35.3 | –39.8 |
| Result before tax | 49.8 | –12.7 | 174.3 | 16.5 |
| Tax | –0.5 | –3.9 | –0.5 | –7.8 |
| Result after tax | 49.4 | –16.6 | 173.9 | 8.7 |
| Other comprehensive income | ||||
| Items that have been/can be transferred to result for the period | ||||
| Translation differences | –6.3 | 116.0 | 116.9 | 259.8 |
| Available-for-sale financial assets | 0 | 0 | 3.2 | –3.2 |
| Cash flow hedges, interest-related | 0 | 4.6 | 0 | 17.1 |
| Tax attributable to items that have been, or can be, | ||||
| transferred to result for the period | 0.0 | 2.2 | 0.0 | 0.0 |
| Comprehensive income for the period | 43.1 | 106.2 | 294.0 | 282.4 |
| Per-share data, SEK | ||||
| Number of shares | 47,729,798 | 47,729,798 | 47,729,798 | 47,729,798 |
| Result per share, before/after dilution | 1.03 | –0.35 | 3.64 | 0.18 |
| Equity per share, SEK | 39.15 | 32.99 | 39.15 | 32.99 |
| SEK millions | 31 Dec 2015 | 31 Dec 2014 |
|---|---|---|
| Closing exchange rate SEK/USD | 8.35 | 7.81 |
| Assets | ||
| Ships and equipment | 3,809.0 | 3,129.7 |
| Ships under construction | 0.0 | 205.8 |
| Financial assets | 0.5 | 0.8 |
| Total non-current assets | 3,809.5 | 3,336.3 |
| Current receivables | 271.4 | 242.9 |
| Short-term investments | 0.0 | 0.0 |
| Cash and bank balances | 273.6 | 136.6 |
| Total current assets | 544.9 | 379.5 |
| Total assets | 4,354.5 | 3,715.8 |
| Equity and liabilities | ||
| Equity | 1,868.7 | 1,574.7 |
| Non-current liabilities | 2,129.0 | 2,013.9 |
| Current liabilities | 356.8 | 127.2 |
| Total equity and liabilities | 4,354.5 | 3,715.8 |
In July 2013, the company owning the vessel received an application for arbitration for the damage the customer believes the company has caused them in connection with Stena Primorsk's grounding in the Hudson River in December 2012 and the company's decision to stop operating the vessel in this shipping channel. In July 2013, the customer requested that the matter be settled by arbitration in the United States. The vessel owner strongly rejects the claim of approx. USD 21 million and is preparing for arbitration.
A discovery phase, in which both parties' standpoints and demands were examined carefully, was completed in the third quarter. During the fourth quarter discussions were initiated in order to start a settlement process. This will continue during the first quarter of 2016. If settlement is not reached, the process will be handled through arbitration, starting in the second quarter 2016, with a ruling likely at the end of the year or in the first quarter of 2017. The company's fees for legal and similar assistance regarding this matter are charged to the company's earnings as incurred.
| SEK millions | Share capital |
Other paid in capital |
Translation reserve |
Hedging reserve |
Fair value reserve |
Retained earnings |
Total |
|---|---|---|---|---|---|---|---|
| Changes Jan-Dec 2015 | |||||||
| Opening balance 01.01.2015 | 381.1 | 61.9 | 289.3 | –3.2 | 0.0 | 844.9 | 1,574.7 |
| Comprehensive income for the period | 0.0 | 0.0 | 116.9 | 3.2 | 0.0 | 173.9 | 294.0 |
| Closing balance 31.12.2015 | 381.1 | 61.9 | 406.2 | 0.0 | 0.0 | 1,018.8 | 1,868.7 |
| Changes Jan-Dec 2014 | |||||||
| Opening balance 01.01.2014 | 381.1 | 61.9 | 29.4 | –20.3 | 3.2 | 836.3 | 1,292.3 |
| Comprehensive income for the period | 259.9 | 17.1 | –3.2 | 8.6 | 282.4 | ||
| Closing balance 31.12.2014 | 381.1 | 61.9 | 289.3 | –3.2 | 0 | 844.9 | 1,574.7 |
| SEK millions | Quarter 4 2015 | Quarter 4 2014 | Full year 2015 | Full year 2014 |
|---|---|---|---|---|
| Operating activities | ||||
| Result before tax | 49.8 | –12.7 | 174.3 | 16.5 |
| Adjustments: | ||||
| Depreciation | 59.6 | 33.1 | 214.2 | 150.5 |
| Result from sale of securities | 0 | –0.1 | 0 | –4.0 |
| Result from sale of investments in jointly-controlled entities | 0 | –1.5 | 0 | –58.9 |
| Other items | –11.2 | 15.2 | 3.7 | 17.7 |
| Cash flow from operating activities before changes in working capital |
98.2 | 34.0 | 392.2 | 121.8 |
| Changes in working capital | –18.3 | –10.8 | –14.8 | –36.2 |
| Cash flow from operating activities | 80.0 | 23.2 | 377.5 | 85.6 |
| Investing activities | ||||
| Investment in non-current assets | –193.2 | –54.0 | –459.3 | –87.9 |
| Sale of financial assets | 0 | 2.4 | 0 | 90.2 |
| Sale of investments in jointly-controlled entities | 0 | 6.3 | 0 | 237.6 |
| Cash flow from investing activities | –193.2 | –45.3 | –459.3 | 239.9 |
| Financing activities | ||||
| New loans | 219.8 | 104.3 | 438.6 | 117.2 |
| Amortisation of loans | –118.1 | –33.1 | –227.5 | –434.9 |
| Dividend to shareholders | 0 | 0 | 0 | 0.0 |
| Cash flow from financing activities | 101.7 | 71.2 | 211.2 | –317.7 |
| Cash flow for the period | –11.6 | 49.1 | 129.3 | 7.8 |
| Balance at beginning of period (Note 1) | 268.6 | 71.4 | 136.6 | 106.0 |
| Exchange differences (Note 2) | 16.6 | 16.1 | 7.7 | 22.8 |
| Balance at end of period (Note 1) | 273.6 | 136.6 | 273.6 | 136.6 |
| 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 | 8.4 | 0.0 | 8.4 | 0.0 |
| Cash flow for the period | 8.2 | 16.1 | –0.7 | 22.8 |
| 16.6 | 16.1 | 7.7 | 22.8 |
| SEK millions | Full year 2015 | Full year 2014 |
|---|---|---|
| Net sales | 24.8 | 2.0 |
| Other external expenses | –15.4 | –15.4 |
| Personnel expenses | –16.0 | –12.6 |
| Operating result | –6.5 | –26.0 |
| Result from subsidiaries | 86.4 | 0.0 |
| Other interest and similar income | 25.9 | 12.8 |
| Interest and similar expense | –36.0 | –53.9 |
| Result before tax | 69.8 | –67.1 |
| Tax | 5.6 | 0 |
| Result for the period | 75.4 | –67.1 |
| SEK millions | 31 Dec 2015 | 31 Dec 2014 |
|---|---|---|
| Assets | ||
| Ships and equipment | 0.0 | 0.1 |
| Financial assets | 40.0 | 34.3 |
| Investments in Group companies | 745.8 | 745.8 |
| Total non-current assets | 785.8 | 780.2 |
| Current receivables | 30.5 | 2.8 |
| Receivables from Group companies | 1,483.4 | 1,399.6 |
| Cash and bank balances | 4.9 | 119.4 |
| Total current assets | 1,518.8 | 1,521.9 |
| Total assets | 2,304.6 | 2,302.1 |
| Equity and liabilities | ||
| Equity | 612.1 | 536.7 |
| Non-current liabilities | 1,477.6 | 1,753.8 |
| Current liabilities | 215.0 | 11.5 |
| Total equity and liabilities | 2,304.6 | 2,302.1 |
| Pledged assets | 83.5 | 68.1 |
| Contingent liabilities 1) | 307.3 | 272.5 |
1) The parent company has provided a guarantee for a subsidiary, which relates to vessel financing.
As with all commercial enterprises, Concordia Maritime's activities are associated with certain risks, the occurrence of which may have a material adverse effect on the company's business, earnings, financial position and future prospects or result in a fall in value for the company's shares, meaning that investors could lose all or part of their invested capital. The risks below are not presented in order of importance and are not the only risks and uncertainties the company faces. Additional risks and uncertainties of which the company is currently unaware or does not consider significant may also develop into factors that may have a material adverse effect on the company's business, earnings, financial position or future prospects. The description does not claim to be complete or exact, as risks and their extent vary over time.
The overall risk areas are corporate risks, market-related risks, operational risks and financial risks.
More information about risks and risk management can be found in Concordia Maritime's 2014 annual report, which is available at www.concordiamaritime.com.
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 principles and computation methods have been applied as in the most recent annual report. No new or revised IFRS recommendations or IFRIC interpretations have had any material effect on the Group's or parent company's financial position, results or disclosures.
The Concordia Maritime Group applies International Financial Reporting Standards (IFRS) as adopted by the EU. The Group prepares its interim reports in accordance with the accounting policies and calculation methods used in the 2014 annual report, unless otherwise indicated in this report.
The Group's year-end 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 year-end 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. The report has not been reviewed by the Company's auditors.
Gothenburg, 28 January 2016
| Carl-Johan Hagman Chairman |
Stefan Brocker Deputy Chairman |
Daniel Holmgren | Mats Jansson | Helena Levander | Mahmoud Sifaf |
|---|---|---|---|---|---|
| Jörgen Lorén | Michael G:son Löw | Morten Chr. Mo | Dan Sten Olsson | Kim Ullman |
CEO
| SEK millions | Q4 2015 | Q3 2015 | Q2 2015 | Q1 2015 | Q4 2014 | Q3 2014 | Q2 2014 | Q1 2014 |
|---|---|---|---|---|---|---|---|---|
| Profit/loss items | ||||||||
| Total income | 217.6 | 209.7 | 204.3 | 178.4 | 125.7 | 104.0 | 166.2 | 135.2 |
| Operating costs excluding impairment |
–159.9 | –149.0 | –152.0 | –139.4 | –123.6 | –117.9 | –114.0 | –119.3 |
| Operating result (EBIT) | 57.6 | 60.7 | 52.3 | 39.0 | 2.2 | –13.9 | 52.2 | 15.9 |
| of which result from sale of investments in jointly-controlled |
||||||||
| entities (vessels) | — | — | — | — | — | — | 56.1 | — |
| Financial net | –7.8 | –8.3 | –8.3 | –10.9 | –14.9 | –9.2 | –10.1 | –5.7 |
| Result after financial net | 49.8 | 52.4 | 44.0 | 28.1 | –12.7 | –23.1 | 42.1 | 10.2 |
| Result after tax | 49.4 | 52.4 | 44.0 | 28.1 | –16.6 | –27.0 | 40.1 | 12.2 |
| Cash flow from operating activities |
80.0 | 145.9 | 55.2 | 87.0 | 34.0 | 23.8 | 21.9 | 42.1 |
| EBITDA | 117.3 | 114.0 | 105.2 | 87.3 | 42.7 | 26.7 | 90.2 | 55.1 |
| Balance-sheet items | ||||||||
| Ships (number) | 3,809.0 (13) | 3,559.6 (12) | 3,527.9 (12) | 3,415.1 (11) | 3,129.7 (11) | 2,944.9 (11) | 2,769.6 (11) | 2,708.6 (12) |
| Ships under construction (number) |
0 | 133.1 (1) | 124.2 (1) | 243.4 (2) | 205.8 (2) | 142.0 (2) | 130.8 (2) | 102.0 (2) |
| Liquid funds incl. investments |
273.5 | 268.6 | 137.1 | 201.4 | 136.6 | 71.4 | 94.2 | 211.8 |
| Other assets | 271.4 | 286.5 | 315 | 267.5 | 243.7 | 261.6 | 182.2 | 364.6 |
| Interest-bearing liabilities | 2 387.2 | 2,298.1 | 2,260.8 | 2,250.7 | 2,038.9 | 1,792.2 | 1,669.0 | 1,970.6 |
| Other liabilities and provisions |
102.2 | 123.3 | 109.3 | 109.2 | 102.2 | 152.7 | 111.3 | 112.0 |
| Equity | 1 868.7 | 1,826.5 | 1,734.5 | 1,767.6 | 1,574.7 | 1,474.9 | 1,396.5 | 1,304.4 |
| Total assets | 4 354.5 | 4,248.0 | 4,105.3 | 4,127.5 | 3,715.8 | 3,419.8 | 3,176.8 | 3,387.0 |
| Key ratios, % | ||||||||
| Equity ratio | 43 | 43 | 42 | 43 | 42 | 43 | 44 | 39 |
| Return on total capital Return on capital |
5 | 4 | 2 | 2 | 2 | 1 | 0 | 2 |
| employed | 5 | 3 | 2 | 2 | 2 | 1 | 0 | 2 |
| Return on equity | 10 | 6 | 2 | 2 | 1 | 0 | 0 | 1 |
| Operating margin | 26 | 29 | 25 | 22 | 2 | –13 | 31 | 12 |
| Share data | ||||||||
| Total income | 4.56 | 4.39 | 4.28 | 3.71 | 2.63 | 2.18 | 3.48 | 2.83 |
| Operating costs excluding impairment |
–3.35 | –3.12 | 3.18 | –2.92 | –2.59 | –2.47 | –2.39 | –2.50 |
| Operating result before impairment |
1.21 | 1.27 | 1.10 | 0.82 | 0.05 | –0.29 | 1.09 | 0.33 |
| Financial net | –0.14 | –0.18 | –0.17 | –0.23 | –0.31 | –0.19 | –0.21 | –0.12 |
| Result after tax | 1.03 | 1.10 | 0.92 | 0.59 | –0.48 | –0.57 | 0.84 | 0.26 |
| Cash flow from operating activities |
1.68 | 3.06 | 1.16 | 1.82 | –5.76 | 0.50 | 0.46 | 0.88 |
| EBITDA | 2.46 | 2.26 | 2.08 | 1.72 | 0.85 | 0.47 | 1.81 | 1.08 |
| Equity | 39.15 | 38.27 | 36.34 | 37.03 | 32.99 | 30.90 | 29.26 | 27.33 |
Please note that there has been no dilution effect since 2002.
Definitions: see page 13
Kim Ullman, CEO +46 31 85 50 03 or +46 704 85 50 03 kim.ullman@
concordiamaritime.com Ola Helgesson, CFO +46 31 85 50 09 or +46 704 85 50 09
ola.helgesson@ concordiamaritime.com
Calendar
| 26 April 2016 |
|---|
| 28 July2016 |
| 9 November 2016 |
Distribution For environmental reasons, we are only publishing our interim reports digitally. Concordia Maritime's interim reports and additional financial information about the Company can be read or downloaded from our website www.concordiamaritime.com/en/ investor-relations
The information in this report is information that Concordia Maritime is required to disclose in accordance with the Swedish Securities Market Act and/or the Swedish Financial Instruments Trading Act. The information was made public on 28 January 2016, at approx. 2.30 p.m.
Concordia Maritime 405 19 Gothenburg, Sweden Tel +46 31 85 50 00 Corp. ID 556068-5819 www.concordiamaritime.com
| Vessel name | Employment | Partner | |
|---|---|---|---|
| PRODUCT TANKERS | |||
| P-MAX | Stena Premium | Spot (light) | Stena Weco |
| Stena Polaris | Spot (light) | Stena Weco | |
| Stena Performance | Spot (light) | Stena Weco | |
| Stena Provence | Spot (light) | Stena Weco | |
| Stena Progress | Spot (light) | Stena Weco | |
| Stena Paris | Spot (light) | Stena Weco | |
| Stena Primorsk | Spot (heavy) | Concordia Maritime/ Stena Bulk Pool |
|
| Stena Penguin | Spot (heavy) | Concordia Maritime/ Stena Bulk Pool |
|
| Stena Perros | Time charter to Jan 2016 (heavy) |
Concordia Maritime/ Stena Bulk Pool |
|
| Stena President | Time charter to Jan 2016 (heavy) |
Concordia Maritime/ Stena Bulk Pool |
|
| IMOIIMAX | Stena Image | Spot (light) | Stena Weco |
| Stena Important | Delivered Oct 2015 | Stena Weco | |
| MR ECO | Unnamed vessel1 | Spot | Stena Weco |
| CRUDE OIL TANKERS | |||
| Suezmax | Stena Supreme | Spot | Stena Sonangol Suezmax Pool |
| Unnamed vessel2 | Spot | Stena Sonangol Suezmax Pool |
1) 50% charter November 2015–November 2017 (with an option for a further 1-6 months). 2) 50% charter July 2015–June 2016.
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).
Return on equity Result after taxas an average of the last twelve months expressed as a percentage of average equity on a 12-month rolling basis.
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.
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 noninterest-bearing liabilities, including deferred tax liability.
Equity ratio Equity as a percentage of total assets.
Spot charter (open market) Hiring of vessels on a voyage-by-voyage basis.
Time charter Hiring of vessels for a specified period at a fixed rate.
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