Earnings Release • Oct 27, 2016
Earnings Release
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27/10/2016 – 5.45 PM Regulated information
The Executive Committee of EXMAR NV has reviewed the results for the third quarter of 2016.
Highlights of recent developments are:
| IFRS "International Financial Reporting | Management Reporting based on | |||
|---|---|---|---|---|
| Standards" | "Proportional Consolidation" | |||
| Consolidated income statement according IFRS | YTD September | YTD September | YTD September | YTD September |
| (in million USD) | 2016 | 2015 | 2016 | 2015 |
| Turnover | 78.5 | 85.0 | 195.5 | 249.0 |
| EBITDA | 4.9 | -8.8 | 89.0 | 83.1 |
| Depreciations | -5.3 | -4.0 | -34.4 | -33.4 |
| Operating result (EBIT) | -0.4 | -12.8 | 54.6 | 49.7 |
| Financial Result: | 0.9 | 8.1 | -25.7 | -16.6 |
| - Of which Change in Fair Value of Financial Derivatives | 0.0 | 0.0 | 0.0 | 0.0 |
| Share in the result of equity accounted investees | 28.3 | 37.6 | 0.0 | 0.0 |
| Result before taxes | 28.8 | 32.9 | 28.9 | 33.1 |
| Income taxes | 0.4 | -1.4 | 0.3 | -1.6 |
| Consolidated result after taxation | 29.2 | 31.5 | 29.2 | 31.5 |
| - Share of the group in the result | 29.2 | 31.5 | 29.2 | 31.5 |
| Information per share (in USD per share) | YTD September | YTD September | YTD September | YTD September |
| 2016 | 2015 | 2016 | 2015 | |
| Weighted average number of shares during the period | 56,744,347 | 56,775,236 | 56,744,347 | 56,775,236 |
| EBITDA | 0.09 | -0.15 | 1.57 | 1.46 |
| EBIT | -0.01 | -0.23 | 0.96 | 0.88 |
| Consolidated result after taxation | 0.51 | 0.55 | 0.51 | 0.55 |
| Contribution to the consolidated operating result (EBIT) | YTD September | YTD September | ||
| of the various operating divisions (in million USD) | 2016 | 2015 | ||
| LNG | 31.3 | 24.8 | ||
| Offshore | -1.1 | 4.4 | ||
| LPG | 28.6 | 23.0 | ||
| Supporting Services and Holding | -4.2 | -2.5 | ||
| Consolidated operating result | 54.6 | 49.7 |
All figures mentioned in this press release have been prepared under IFRS and have not been reviewed by the statutory auditor. EBIT for the first 9 months of 2016 under proportionate consolidation is USD 54.6 million compared to USD 49.7 million for the same period last year. The results for the first 9 months of 2016 have been positively impacted by a USD 14.3 million non-cash profit on the acquisition of 50% shares of Wah Kwong in the pressurized fleet at end of June 2016.
Press Release | Third quarter results 2016 Contact: Miguel de Potter CFO | +32 3 247 56 70 www.exmar.be
The operating result (EBIT) was USD 6.6 million for the third quarter 2016 (compared to USD 9.0 million for the same period in 2015). With the exception of the Excel (2003 built, 138,000 m³), all LNGC's and FSRU's in which EXMAR has an ownership stake are in service and have contributed during the third quarter under their respective Time-Charters. The results were impacted by the cost of completing the commissioning of the Caribbean FLNG at the shipyard.
All Floating Storage and Regasification Units (FSRU) and LNG carriers (with the exception of the Excel) remain committed to long-term charter. Excel is currently employed on the spot market and continues to benefit from the minimum revenue undertaking. It is expected however that this minimum revenue undertaking will be fully utilized by the end of the year.
The Caribbean FLNG has been successfully performance-tested at the Wison Offshore and Marine shipyard in Nantong, People's Republic of China. Delivery of the unit will take place before the end of the year. Several employment opportunities for the unit are currently under active discussions.
The FSRU under construction at Wison is progressing as planned and the unit is expected to be delivered by mid-2017.
Several Joint Development Agreements and Exclusivity Agreements have been signed for the deployment of the FSRU barge and development of FSRU Newbuildings around the world.
The operating result (EBIT) for the third quarter of 2016 was USD -2.3 million (compared to USD -0.2 million in the same period of 2015). This result includes development costs for improved Oil and Gas solution designs.
The accommodation barges Wariboko and Nunce are operating in West Africa under their respective contracts and will be fully employed for the balance of 2016. The contract of the Kissama has been extended until end of November and has been offered for employment contracts in West Africa commencing late 2016 early 2017. Wariboko has been sold for 60% to our Nigerian partners under a purchase option mechanism at the end of May 2016. This accommodation barge remains employed until the middle of 2017 and is currently being marketed beyond that period in the region.
The engineering services of EXMAR OFFSHORE (EOC - Houston) has been negatively impacted by the lack of activity in the market but has been active in the development of the next series of OPTI® production facilities. EXMAR's OPTI® production semisubmersible remains high on the list of development options worldwide where EXMAR has been actively engaged by oil companies in the Gulf of Mexico and the Far East.
More recently, EXMAR OFFSHORE has completed the early design of the OPTI-Micro™ which is an even lower cost Floating Production Solution specifically targeted at fields less than 100 million barrels of oil equivalent. Pricing indications for this facility are in-line with expectations to enable the commercial development of these sized fields.
The operating result (EBIT) of the LPG fleet in the third quarter of 2016 was USD 2.4 million (as compared to USD 9.1 million for the same period in 2015). The result of the third quarter was affected by the spot market conditions on the only VLGC in the fleet, the BW Tokyo.
The average Baltic VLGC Freight Index further decreased during the third quarter resulting in earnings close to OPEX levels. The main reasons being the lack of arbitrage opportunities and less export volumes from the USA.
Potential market consolidation in the sector as well as traditionally stronger winter season and the use of tonnage for floating storage still bode for some optimism in this segment.
EXMAR-controlled BW Tokyo (83,000 m³) currently remains employed on behalf of the same long-term Charterer on short term extensions of the original Time-Charter. Long term opportunities are still being pursued.
Facing more competition from both the smaller and larger segments earnings for spot and short-term commitments for MGC have come under further pressure. Ammonia transportation is developing positively, yet the prospects remain moderate.
The reported cancellation of three newbuilding orders and further postponement of deliveries might have a positive impact in the medium term.
EXMAR's contract portfolio (having recently secured a medium-term TC contract with an Oil Major) remains healthy for the balance of the year with 86% employment already secured, 59% of the fleet has been contracted for 2017 and 41% for 2018. All the vessels under construction are already fully financed.
EXMAR's fourth newbuild from Hanjin Heavy Industries, Kortrijk (2016 built, 38,000 m3 ) will be delivered to its new Charterer for trading on long-term basis in December.
The third quarter of 2016 has remained challenging on the spot market with ample ships incurring idle time both East and West.
There is increasing competition between pressurized vessels ranging from 3,500 m³ to 11,000 m³. The Eastern market has remained relatively busy in the propylene trade.
Looking ahead, Time – Charter rates are expected to increase gradually as a result of the minimal orderbook and potential scrapping of vintage semi-refrigerated tonnage.
At present EXMAR's fleet is entirely covered on Time-Charter whereas cover for 2017 stands at 68%.
| Time-Charter Equivalent (in USD per day) | YTD September 2016 |
YTD September 2015 |
|---|---|---|
| Midsize (38,115 m³) | 27,176 | 29,972 |
| VLGC (83,300 m³) | 32,395 | 57,106 |
| Pressurized (3,500 m³) | 5,169 | 5,570 |
| Pressurized (5,000 m³) | 6,603 | 7,869 |
The contribution of the Services activities (EXMAR SHIPMANAGEMENT, BELGIBO, TRAVEL PLUS) to the operating result (EBIT) for the third quarter of 2016 was USD 0.3 million (compared to USD -0.1 million in 2015 for the same period).
The contribution of the Holding activities to the operating result (EBIT) for the third quarter 2016 was USD -1.1 million (compared to USD -0.9 million in 2015).
It has been decided that the Company will no longer publish Provisional Results as from 1 st January 2017 which is in line with the applicable legislation. The final results for 2016 will be published on 30th March 2017. A revised financial calendar can be found on www.exmar.be.
Antwerp, 27th October 2016 The Executive Committee
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