AI Terminal

MODULE: AI_ANALYST
Interactive Q&A, Risk Assessment, Summarization
MODULE: DATA_EXTRACT
Excel Export, XBRL Parsing, Table Digitization
MODULE: PEER_COMP
Sector Benchmarking, Sentiment Analysis
SYSTEM ACCESS LOCKED
Authenticate / Register Log In

Gram Car Carriers ASA

Investor Presentation Apr 21, 2023

3610_rns_2023-04-21_476e6e60-95a1-4dea-9c35-1b265fb93a47.pdf

Investor Presentation

Open in Viewer

Opens in native device viewer

Q1 2023 presentation

Gram Car Carriers ASA

21 April 2023

Disclaimer

THIS PRESENTATION IS NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN OR INTO OR FROM THE UNITED STATES OF AMERICA, ITS TERRITORIES OR POSSESSIONS, AUSTRALIA, CANADA, JAPAN OR SOUTH AFRICA OR TO ANY RESIDENT THEREOF, OR ANY JURISDICTION WHERE SUCH DISTRIBUTION IS UNLAWFUL. THIS PRESENTATION IS NOT AN OFFER OR AN INVITATION TO BUY OR SELL SECURITIES.

This presentation (the "Company Presentation") has been prepared by Gram Car Carriers ASA (the "Company", and together with its consolidated subsidiaries, the "Group").

This Company Presentation has been prepared for information purposes only, and does not constitute or form part of, and should not be construed as, any offer, invitation or recommendation to purchase, sell or subscribe for any securities in any jurisdiction, and neither the issue of the information nor anything contained herein shall form the basis of or be relied upon in connection with, or act as an inducement to enter into, any investment activity. This Company Presentation does not purport to contain all of the information that may be required to evaluate any investment in the Company or any of its securities and should not be relied upon to form the basis of, or be relied on in connection with, any contract or commitment or investment decision whatsoever. This presentation is intended to present background information on the Company, its business and the industry in which it operates and is not intended to provide complete disclosure upon which an investment decision could be made.

This Company Presentation is furnished by the Company, and it is expressly noted that no representation or warranty, express or implied, as to the accuracy or completeness of any information included herein is given by the Company. The contents of this Company Presentation are not to be construed as financial, legal, business, investment, tax or other professional advice. Each recipient should consult with its own professional advisors for any such matter and advice. Generally, any investment in the Company should be considered as a high-risk investment.

This Company Presentation is current as of 21 April 2023. Neither the delivery of this Company Presentation nor any further discussions of the Company with any of the recipients shall, under any circumstances, create any implication that there has been no change in the affairs of the Company since such date. This Company Presentation may contain forward-looking statements relating to the business, financial performance and results of the Company and/or the industry in which it operates. Forward-looking statements concern future circumstances and results and other statements that are not historical facts, sometimes identified by the words "believes", "expects", "predicts", "intends", "projects", "plans", "estimates", "aims", "foresees", "anticipates", "targets", and similar expressions. Any forward-looking statements contained in this Company Presentation, including assumptions, opinions and views of the Company or cited from third party sources, are solely opinions and forecasts which are subject to risks, uncertainties and other factors that may cause actual events to differ materially from any anticipated development. The Company provides no assurance that the assumptions underlying such forward-looking statements are free from errors and does not accept any responsibility for the future accuracy of the opinions expressed in this Company Presentation or the actual occurrence of the forecasted developments.

The distribution of this Company Presentation by the Company in certain jurisdictions is restricted by law. Accordingly, this Company Presentation may not be distributed or published in any jurisdiction except under circumstances that will result in compliance with any applicable laws and regulations. This Company Presentation does not constitute an offer of, or an invitation to purchase, any securities.

IN RELATION TO THE UNITED STATES AND U.S. PERSONS, THIS PRESENTATION IS BEING FURNISHED ONLY TO INVESTORS THAT ARE "QIBs", AS DEFINED IN RULE 144A UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE "U.S. SECURITIES ACT"). THE SHARES HAVE NOT BEEN, AND WILL NOT BE, REGISTERED UNDER U.S. SECURITIES ACT OR WITH ANY SECURITIES REGULATORY AUTHORITY OF ANY STATE OR OTHER JURISDICTION IN THE UNITED STATES, AND MAY NOT BE OFFERED OR SOLD WITHIN THE UNITED STATES, OR TO OR FOR THE ACCOUNT OR BENEFIT OF A U.S. PERSON, EXCEPT PURSUANT TO AN APPLICABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE U.S. SECURITIES ACT AND IN COMPLIANCE WITH ANY APPLICABLE STATE SECURITIES LAWS.

This Company Presentation is subject to Norwegian law, and any dispute arising in respect of this Company Presentation is subject to the exclusive jurisdiction of Norwegian courts with Oslo District Court as first venue.

Key events

  • Board of Directors has approved a dividend of USD 0.224 per share for Q1 2023
  • Q1 2023 revenue of USD 41.1 million and EBIT of USD 20.1 million
  • Q1 2023 average TCE revenue: Panamax USD 30,060; Mid-size USD 29,100 and Distribution fleet USD 15,540
  • Total revenue backlog of USD 874 million at 31 March
  • Well positioned in historically strong market with 3%/20%/24% open days in 2023/24/25
  • Favourable market outlook with continued high charter rates and long contract durations
  • Reduced margins under credit facilities, contributing to lower interest expense
  • Dividend pay-out ratio to be increased to 75% of net income from Q2 2023

Market fundamentals remain strong

Strong demand drivers and predictable supply for the next 2-3 years maintain favourable market outlook

Key figures Q1'23 (Q4'22)

USD 41.1 million (USD 38.3 million)

USD 27.7 million (USD 23.0 million)

USD 13.1 million

(USD 9.9 million)

USD 6.56 million (USD 4.96 million)

USD 25,620 (USD 22,720)

95% (97%)

Net profit Planned/unplanned off-hire Open revenue days 20233 39/46 days (21/32 days)

Dividend proposed Average cash break-even2 Average renewal duration4

USD 16,920 (USD 17,270)

Revenue Average TC rate1 Revenue backlog added USD 61 million (USD 326 million)

EBITDA Utilisation Revenue backlog end of quarter3 USD 874 million (USD 856 million)

192/3% (970/10%)

4.5 years

1) On cash flow basis, revenue as per income statement are on straight-line basis in accordance with IFRS

2) Current break-even comprise of budgeted vessel running expenses, insurance, overheads and debt servicing based on prevailing 3m SOFR implied forward rates and next 12 months' debt amortisation schedule. Capex not included

3) As per end of reporting date, assuming mid-point charter party redelivery date

4) Average duration of all new charters concluded after listing in January 2022.

Committed to attractive shareholder distributions

  • USD 6.56 million dividend approved for the first quarter, equal to USD 0.224 per share
  • To be paid on or about 23 May, subject to approval at the AGM on 12 May 2023
  • In line with stated policy of 50% of the quarterly profit, and a 33% increase from the fourth quarter

New dividend pay-out ratio of 75% of net profit

  • Reflects dividend capacity assessment following increase in revenue backlog and good visibility on future cash flow
  • Effective from second quarter 2023

GCC in brief

The world's third largest car carrier tonnage provider

  • Commercial manager of 24 car carriers 20 on water and 4 newbuilds
  • − 19 owned and 5 managed on behalf of third-party owners
  • − Average fleet age ~11 years vs. global fleet average of 15 years
  • Commercial manager of Global Auto Carriers (GAC)
  • − Building 4x7,000 CEU multifuel PCTCs with 2 options in China
  • Strong industry name engaged in car carrier investments since 1982
  • Extensive and long history of chartering vessels to all major global operators and key regional operators worldwide
  • Offices in Oslo (HQ) and Singapore
  • Listed on Oslo Børs main market with ticker "GCC"

A critical link in one of the world's largest industries

Diversified fleet of 19 owned PCTCs

Fleet age of approx. 11 years vs. world fleet average of approx. 15 years

10

Mid-size

• Viking Odessa • Hoegh Caribia • City of Oslo • Viking Constanza • Viking Princess 1 (2,000 CEU)

• Viking Amber • Viking Coral • Viking Diamond • Viking Emerald • Viking Ocean • Viking Sea • Viking Drive 2 • Viking Paglia 3 • Viking Passero 3 • Viking Passama 3 (4,200 CEU)

GCC owned vessels Third party vessels 5

1 NRP • Mediterranean Sea (5,000 CEU)

• Viking Adventure • Viking Bravery • Viking Destiny • Viking Queen 4 (6,700 CEU)

Operational highlights

2) Current break-even comprise of budgeted vessel running expenses, insurance, overheads and debt servicing based on prevailing 3m SOFR implied forward rates and next 12 months' debt amortisation schedule. Capex not included

3) As per end of reporting period, assuming mid-point charter party redelivery date

Strong operational performance across the fleet Q1'23 (Q4'22)

  • Increased revenue for all vessel types
  • Dry-docking of three Mid-size vessels during the quarter
  • Vessel operating expenses in line with budget
  • Revenue is set to continue to increase over the next quarters as vessels roll over on new contracts at higher dayrates
  • Further fixings at expected attractive TC rates and durations

Open revenue days3 2023 192/3% (670/10%) Open revenue days3 2024 1,391/20% (2,123/31%) Open revenue days3 2025 1,656/24% (2,386/34%) Revenue backlog3 USD 874m (856m) Average cash break-even2 USD 16,920 (17,270)

Long-term contract coverage at strong charter rates

Q1'23 Q2'23 Q3'23 Q4'23 Q1'24 Q2'24 Q3'24 Q4'24 2025 2026 2027 2028
Viking Constanza 2,000 USD 17,000 TIME CHARTER
Viking Queen 7,000 USD 16,300 LATEST FIXTURES
Viking Princess 1,000 USD 10,450 OPTION
Viking Amber 4,200 USD 23,000
Viking Passero 5,000 USD 27,700
Hoegh Caribia 2,000 USD 22,000
Viking Drive 3,500 USD 26,550
City of Oslo 2,000 USD 14,430 USD 27,750
Viking Coral 4,200 USD 30,527
Viking Odessa 2,000 USD 14,500 USD 27,750
Viking Emerald 4,200 USD 28,000
Viking Sea 4,200 USD 30,612
Viking Ocean 4,200 USD 35,000
Viking Diamond 4,200 USD 35,000
Viking Destiny 6,700 USD 65,000
Viking Adventure 6,700 USD 56,074
Viking Paglia 5,000 USD 33,300
Viking Bravery 6,700 USD 18,000 USD 64,900 USD 48,000
Viking Passama 5,000 USD 33,300

Contract renewals expected well ahead of expiry of existing contracts

Enhanced earnings visibility with operators entering longer contracts

3%/20%/24% open revenue day for 2023/24/25

USD 874 million Backlog 31 March 20231

Record backlog supporting stable earnings

Revenue backlog1 Revenue backlog by year of expected recognition1 USD million USD million

Financial review

Key figures for Q1 2023

  • Increased revenue for all vessel types reflecting strong operations in the quarter
  • Q1 2023 net income of USD 13.1 million
  • Cash flow from operating activities was USD 25.4 million. The difference from EBITDA in the quarter was due to a net increase in working capital and deferred income
  • In compliance with all financial covenants per 31 March 2023
  • Vessels rolling over on new charters at higher rates will continue to contribute to higher earnings during 2023
  • Agreement with lenders to reduce the margin from Q2 2023 on the main credit facility to from fixed 3.26% to 2.75% by applying an interest-bearing debt/EBITDA grid-based pricing
In USD thousands1 Q1 2023 Q4 2022 2022
Operating revenue 41,146 38,250 120,976
EBITDA 27,702 22,953 70,596
EBIT 20,060 16,039 43,126
Profit for the period 13,121 9,928 23,877
Cash flow from operating activities 25,378 35,577 79,617
Cash and cash equivalents 23,701 30,287 30,287
Interest-bearing debt 319,213 339,470 339,470
Equity ratio 42% 40% 40%

Market opportunity

Recent market fixtures reflect strong demand and limited supply

Current market TC rates per day1 (one year)

T1) TC development for Mid-size and Panamax from Clarksons. TC rate Distribution vessels and no. of vessels open (tonnage providers global fleet) based on Company's own estimates

Favorable market fundamentals continue

Global light vehicles sales forecasted to recover towards US Inventory levels of import brands still at low levels pre-covid levels

Jun 2022 Apr 2023

Chinese vehicle exports Strong growth amid global EV uptake

  • Preliminary export numbers for March 2023 at 360,000 vehicles
  • Current run-rate set to surpass 4 million yearly exports in 2023
  • BEV share continues to grow, with the 12-month rolling average at 30% and the monthly share at 36% (February 2023)
  • Chinese export goes primarily to Asia, Europe and South America
  • North American cargo goes predominantly to Mexico, not into the US

High & heavy demand outlook supportive for car carriers

Record H&H volumes continue into first months of 2023

• Robust backlog due to availability challenges keep demand at historically elevated levels

• Investment cycle started by the Covid-19 commodity boom has generated significant backlog that is decreasing slowly due to shortage of equipment and lack of transport capacity

  • Volumes into US remain high, while President Biden's USD 2 billion infrastructure plan is likely to further fuel US demand
  • Current developments in the financial system and their effect on the housing market will be a stress test to US-economy and above fundamentals

Expected deliveries of car carriers insufficient to meet demand

Car carrier fleet growing, but still below average replacement need considering negative backlog

Upcoming deliveries will not make up total replacement need

Note: Replacement need estimated basis 750 vessels with an average economic lifetime of 28 years

Market capable of absorbing orderbook

Closing remarks

Why invest in Gram Car Carriers?

  • Unique investment opportunity in leading PCTC tonnage provider
  • Attractive market fundamentals with long-term upcycle unfolding
  • Successfully capturing the strong market with 3%/20%/24% open days in 2023/24/25
  • Steadily improving earnings with fleet rolling over on new contracts with further upside potential
  • Delivering on our commitment to attractive shareholder distributions with increased pay-out ratio to 75% of EPS through quarterly dividends from Q2 2023

Appendix

Seasoned management team and Board

Georg Whist, CEO

Previously CFO in Hafnia Tankers Aps in Copenhagen following 18 years with Nordea Bank as SVP and Head of Europe, Asia & Middle East of Nordea Bank's Shipping, Offshore and Oil Service. CEO of Gram Car Carriers from 2018.

Børre Mathisen, COO

Previously at Hoegh Autoliners from 1996 where he held various positions, including two periods in Japan in charge of Commercial Operations in East Asia. Joined Gram Car Carriers in 2013.

Gunnar Koløen, CFO

Previously CFO and MD at Dolphin Drilling (Singapore). GM of Gram Car Carriers (Singapore) 2009-11 and served as a Director of the Company from 2012 to 2020. Started his professional career with KPMG and qualified as a State Authorised Public Accountant from Norway

Mas Gram, Head of Projects and IR

Previously at Pareto Securities (Corporate Finance) in Singapore and Tufton Oceanic (Asset Backed Investments) in London. Joined Gram Car Carriers in 2011.

Ivar Myklebust, Chair

Previously served as CEO and CFO of Höegh Autoliners, and CFO of D/S Norden. He has previously held board positions as chairperson of Havyard Ship Technology; board member of the Norwegian Shipowner's Mutual War Risk Insurance Association (DNK), and director of Euro Marine Logistics NV.

Nikolaus H. Schües , Vice Chair

Mr. Schües is the principal and CEO of F. Laeisz GmbH. He has long experience as Designated President of BIMCO, Vice Chairman of UK P&I Club and Member of the Presidential Committee of German Shipowners Association.

Christine Rødsæther, Board Member

Christine Rødsæther has since 2002 worked as a lawyer and partner of the law firm Simonsen Vogt Wiig AS. Furthermore, she is a board member in Odfjell SE and Tufton Oceanic Assets Limited, and Mrs. Rødsæther has previously acted as board member in Norwegian Guarantee Institute for Export (GIEK), Grieg Shipping, Songa Bulk ASA and Bank Norwegian ASA. She has extensive experience in international shipping and offshore transactions, banking and finance and general contract law. Mrs. Rødsæther has previous experience as lawyer from Wikborg, Rein & Co. including the London office and Andersen Legal ANS. She holds a Master of Law from the University of the Pacific, Sacramento, California and Cand. Jur. from the University of Bergen

Nils Kristoffer Gram, Board Member

Mr. Gram is currently Partner and Investment Director in Vanir Green Industries, an energy transition focused investment company. He is a board member of several private companies related to energy transition and circular economy, and has previously acted as board member of Element ASA. Mr. Gram has over 20 years' experience from consulting, investment banking and investments, having been CEO of ProCorp AS, MD of Gram Shipping AS, a Partner in Pareto Securities AS, and consultant in Capgemini Consulting.

Alasdair Locke, Board Member

Mr. Locke is the Chair of Motor Fuel Group and Non-Executive Chair of Well-Safe Solutions Ltd. He is the former Executive Chair of Abbot Group plc, an oil services company which he founded in 1992. Mr. Locke holds an M.A (Hons) in History and Economics from Wadham College Oxford

Dr. Gaby Bornheim, Board Member

Dr. Bornheim is Managing Director of Peter Döhle Schiffahrts KG. In the past she was inhouse counsel for Deutsche Shell AG and MobilOil AG. Gaby is President of the German Shipowners Association. She studied economics and law at Westfälische Wilhelms-Universität Münster, Germany and passed her second state exam before the Higher Regional Court of Hamburg, Germany.

Clivia Breuel, Board member

Clivia Breuel (née Bunnemann) is a partner of AL Capital Holding GmbH & Co. KG, a diversified and family owned shipowning group and parent company of AL Maritime Holding. She is Chair of the Board of the PBS Foundation. She has long experience in both shipping and banking and holds a master's degree in Business Studies from the EBS Business School Oestrich-Winkel Alternatively: Master's in Business Studies

Nicolaus Bunnemann, Alternate Board Member

Mr. Nicolaus Bunnemann is the Managing Partner of AL Capital Holding GmbH & Co. KG; a diversified family owned shipowning group. He is the Founder and Managing Director of Atlantic Lloyd GmbH & Co. KG, the Group's operating arm in Hamburg, Germany. Mr Bunnemann is a member of the board of the German Shipowners' Defence Association as well as board member of a number of maritime investment companies and holds a Masters Degree in Shipping, Trade and Finance.

Strong shareholder base

Name No. of shares % of total % of top 20 Country
1 F. LAEISZ GMBH 8,199,807 28.00% 34.62% DEU
2 AL MARITIME HOLDING PTE LTD 3,598,438 12.29% 15.19% SGP
3 GLENRINNES FARMS LIMITED 1,938,782 6.62% 8.19% GBR
4 HM GRAM INVESTMENTS III/ HM GRAM ENTERPRISES LTD/HMG AS 1,792,496 6.12% 7.57% CYP
5 AS STRAEN 817,688 2.79% 3.45% NOR
6 BNP PARIBAS 782,040 2.67% 3.30% JEY
7 BNP PARIBAS 710,122 2.42% 3.00% FRA
8 BNP PARIBAS 701,800 2.40% 2.96% ITA
9 LARSSON SHIPPING AB 629,008 2.15% 2.66% SWE
10 CAR CARRIER PARTNERS L.P. 600,176 2.05% 2.53% CYM
11 NORDEA BANK ABP 581,030 1.98% 2.45% SWE
12 VERDIPAPIRFONDET DNB SMB 570,100 1.95% 2.41% NOR
13 HAMILTON CARRIERS LTD 499,638 1.71% 2.11% USA
14 HESNES INVEST AS 414,136 1.41% 1.75% NOR
15 UBS SWITZERLAND AG 364,091 1.24% 1.54% CHE
16 SURFSIDE HOLDING AS 327,233 1.12% 1.38% NOR
17 CLEARSTREAM BANKING S.A. 326,061 1.11% 1.38% LUX
18 SONGA CAPITAL AS 296,681 1.01% 1.25% NOR
19 VERDIPAPIRFONDET STOREBRAND NORGE 295,453 1.01% 1.25% NOR
20 CURRUS NAVI AS 238,009 0.81% 1.00% NOR
Total Shares outstanding 29,285,022 23,682,789

• About 1,100 shareholders

  • Including several international industrial and financial investors with deep industry knowledge
  • About 46% free float

Fully committed to sustainable growth

Compliant with the SASB marine transportation standard (2018) and the Norwegian ship owners' association ESG reporting guidelines

Compliance, commitments and actions for a sustainable future

Long term sustainability goal

GCC will reduce total GHG emissions by at least 50% by 2050 1

Gram Car Carriers ASA

E-mail: [email protected]

gramcar.com

Talk to a Data Expert

Have a question? We'll get back to you promptly.