Earnings Release • Feb 16, 2024
Earnings Release
Open in ViewerOpens in native device viewer
"A strong Q4 2023 closes a record year for KCC, a year of record profitability and solid strategic progress across the business. Both the CABUs and CLEANBUs delivered some of our highest TCEearnings to date, getting the most out of a substantially stronger product tanker market in Q4 2023. After a solid start to the new year, KCC is on course to deliver another exciting quarter in Q1 2024 ."
Average CLEANBU TCE earnings (\$/day)1
EBITDA (MUSD)
1 Average TCE earnings \$/day, Return On Capital Employed (ROCE) and Return On Equity (ROE) are alternative performance measures (APMs) which are defined and reconciled in the excel sheet "APM4Q2023" published on the Company's homepage (www.combinationcarriers.com) Investor Relations/Reports and Presentations under the section for the Q4 2023 report.
Q4 2023 Q3 2023 Q2 2023 Q1 2023 Q4 2022 37 537 27 938 29 482 36 812
45 911
| (USD '000) | Q4 2023 | Q3 2023 | Q4 2022 | 2023 | 2022 |
|---|---|---|---|---|---|
| Net revenues from vessel opera�ons | 53 110 | 43 796 | 44 383 | 196 805 | 164 620 |
| EBITDA | 36 536 | 27 911 | 28 134 | 134 947 | 106 955 |
| Profit/(loss) for the period | 25 892 | 16 311 | 15 343 | 86 899 | 60 869 |
| Earnings per share (USD) | 0.43 | 0.27 | 0.29 | 1.52 | 1.16 |
| Total assets | 628 041 | 627 676 | 642 021 | 628 041 | 642 906 |
| Equity | 361 698 | 353 401 | 297 545 | 361 698 | 297 545 |
| Equity ra�o* | 58% | 56% | 46% | 58% | 46% |
| ROCE annualised* | 19% | 13% | 12% | 17% | 12% |
| ROE annualised* | 29% | 18% | 21% | 24% | 20% |
Net profit after tax for the fourth quarter ended at USD 25.9 million compared to USD 16.3 million in Q3 2023 and USD 15.3 million in Q4 2022. EBITDA for the period ended at USD 36.5 million, a 31% increase Q-o-Q driven by stronger CLEANBU TCE earnings and more on-hire days.
Operating expenses were in line with last quarter, while administrative expenses were up USD 0.7 million/28% Q-o-Q mainly due to exercised share options settled in cash, higher project costs and year-end provisions. Net finance cost decreased by USD 0.5 million/-13% Q-o-Q mainly due to positive FX effects and fair value development on derivatives, partly offset by higher net interest cost.
Net profit for the year ended at USD 86.9 million, an increase of USD 26.1 million/43% from 2022. EBITDA increased by 26% from USD 107.0 million in 2022 to USD 134.9 million in 2023. Average TCE earnings of the fleet were up 18% Y-o-Y from \$29,764/day in 2022 to \$34,983/day in 2023 mainly due to higher revenues from vessel operations. The latter driven by solid earnings on fixed rate caustic soda contracts of affreightment for 2023 relative to 2022 and a healthy product tanker market throughout the year.
Cash and cash equivalents ended at USD 68.1 million by year-end 2023, an increase of USD 3.9 million during the quarter and USD 3.2 million from year-end 2022. Available long-term liquidity (cash and cash equivalents and available capacity on long-term revolving credit facilities) increased by USD 101.8 million Y-o-Y, reflected by strong EBITDA and positive working capital changes, cash from equity issue in May 2023 and up-sizing revolving credit facility capacity, partly offset by cost of dockings, newbuilding installments, debt service and dividend payments.
Total equity ended at USD 361.7 million, an increase of USD 8.3 million from end of Q3 2023 and an increase of USD 64.2 million from year-end 2022. The Y-o-Y change was mainly driven by EBT of USD 86.9 million and equity issue of USD 49.3 million, partly offset by negative other comprehensive income of USD 5.8 million and dividends of USD 66.8 million. The equity ratio ended at 57.5% per end of Q4 2023, up from 56.3% per end of Q3 2023 and 46.3 % year-end 2022.
Interest-bearing debt ended at USD 246.9 million at the end of 2023, down USD 3.2. million from end of Q3 2023 mainly due to ordinary debt repayments, and down USD 72.6 million from year-end 2022 following ordinary debt repayments and lower drawdowns on revolving credit facilities. The Group had per year-end 2023 USD 113.0 million available and undrawn under a long-term revolving credit facility and USD 8.0 million available and undrawn under a 364-days overdraft facility, the latter falling due in December 2024.
KCC raised USD 49.3 million of equity in Q2 2023 to part fund the investment of three CABU newbuilds with delivery in 2026. The newbuilds will be partly funded by debt, which will be secured closer to delivery. Two mortgage debt facilities were refinanced and merged into one facility in June 2023. The new facility falls due after five years and the amount was upsized by approximately USD 38 million. In Q3 2023, KCC issued a five years sustainability-linked bond loan of NOK 500 million (KCC05) and repurchased NOK 508.5 million of the KCC04 bond issue falling due in February 2025.
Based on the escalating situation in the Red Sea area, KCC has decided to not trade any of its vessels through the Red Sea until the situation improves. The CABUs do not trade in the area, while the CLEANBUs from time-to-time transit through the Red Sea. The decision is expected to have limited impact on KCC business activities and financial performance.
On 15 February 2024, the Company's Board of Directors declared to pay a cash dividend to the Company's shareholders of USD 0.35 per share for the fourth quarter 2023, in total approximately USD 21.2 million.
2 % of days in combination trades = number of days in combination trades as a percentage of total on-hire days. A combination trade starts with wet cargo (usually caustic soda or clean petroleum products), followed by a dry bulk cargo. A combination trade is one which a standard tanker or dry bulk vessel cannot perform. The KPI is a measure of KCC's ability to operate our combination carriers in trades with efficient and consecutive combination of wet and dry cargos versus trading as a standard tanker or dry bulk vessel. There are two exceptions to the main rule where the trade is a combination trade: Firstly, in some rare instances a tanker cargo is fixed instead of a dry bulk cargo out of the dry bulk exporting region where KCC usually transports dry bulk commodities. E.g., the vessel transports clean petroleum products to Argentina followed by a veg oil cargo instead of a grain cargo on the return leg. Secondly, triangulation trading which combines two tanker voyages followed by a dry bulk voyage with minimum ballast in between the three voyages (e.g., CPP Middle East-Far East +CPP Far East Australia +Dry bulk Australia-Middle East) are also considered combination trade. 3 Utilization = (Operating days less waiting time less off-hire days)/operating days.
1 Alternative performance measures (APMs) are defined and reconciled in the excel sheet "APM4Q2023" published on the Company's homepage (www.combinationcarriers.com) Investor Relations/Reports and Presentations under the section for the Q4 2023 report.
| (USD '000) | Q4 2023 | Q3 2023 | Q4 2022 | 2023 | 2022 |
|---|---|---|---|---|---|
| Average TCE \$/day* | 36 110 | 37 134 | 25 757 | 34 742 | 26 796 |
| OPEX \$/day* | 8 784 | 7 963 | 9 014 | 7 746 | 7 848 |
| On-hire days | 722 | 632 | 677 | 2 754 | 2 703 |
| Off-hire days, scheduled | 0 | 100 | 55 | 140 | 114 |
| Off-hire days, unscheduled | 14 | 4 | 5 | 26 | 104 |
| % of days in combina�on trades1 | 95% | 94% | 86% | 92% | 80% |
| Ballast days in % of total on-hire days | 10% | 10% | 13% | 12% | 11% |
| U�lisa�on2 | 95% | 86% | 89% | 93% | 90% |
The CABUs delivered continued solid TCE earnings in Q4 2023 at average \$36,110/day. Compared to Q3 2023, TCE earnings decreased by approximately \$1,000/day mainly due to lower operational efficiency, but ended substantially higher, up approximately \$10,350/day compared to Q4 2022. Share of days in combination trades and share of days in ballast were quite in line with last quarter, at approximately 95% and 10%, respectively. TCE earnings for the CABU fleet were 1.3 times higher than the spot market for standard MR5 tankers in the fourth quarter.
Average operating costs of \$8,784/day for the fourth quarter were up approximately \$820/day from the previous quarter and down approximately \$230/day compared to Q4 2022 mainly due to timing effects of procurement. The CABU fleet had 14 unscheduled off-hire days in Q4 2023 mainly related to Port State detentions of two vessels in Australia.
Average TCE earnings per on-hire day increased by approximately \$7,950/day from 2022 to 2023 and ended at \$34,742/day, 1.1 times higher than average standard spot earnings for MR5 tankers in 2023. The historic high TCE earnings in 2023 were driven by high freight rates on the fixed-rate caustic soda solution ("CSS") contracts and high trading efficiency.
Average operating costs per day for the CABU vessels ended at \$7,746/day in 2023, approximately \$102/day lower than 2022, mainly due to some minor claim settlements with positive effects in 2023.
Three CABU vessels were through regular dry-docking in 2023 with a total of 140 off-hire days. One vessel completed installation of several energy efficiency measures including retrofit installation of shaft generator and air lubrication system and had in total 90 off-hire days. The initial results of the retrofit are good with an estimated fuel consumption reduction of around 15%.
1 Alternative performance measures (APMs) are defined and reconciled in the excel sheet "APM4Q2023" published on the Company's homepage (www.combinationcarriers.com) Investor Relations/Reports and Presentations under the section for the Q4 2023 report.
2 % of days in combination trades = see definition on page 2
4 Ballast in % of on-hire days = Number of days in ballast /number of on-hire days. Ballast days when the vessel is off-hire are not included. 5 Clarksons, MR (CABU) and LR1 (CLEANBU) tanker multiple calculated based on assumption of one-month advance cargo fixing/«lag»
3 Utilization = (Operating days less waiting time less off-hire days)/operating days
| (USD '000) | Q4 2023 | Q3 2023 | Q4 2022 | 2023 | 2022 |
|---|---|---|---|---|---|
| Average TCE \$/day* | 37 537 | 27 938 | 36 812 | 35 214 | 32 614 |
| OPEX \$/day* | 9 034 | 9 959 | 9 395 | 9 458 | 8 787 |
| On-hire days | 721 | 727 | 740 | 2 872 | 2 814 |
| Off-hire days, scheduled | 10 | 9 | 0 | 37 | 87 |
| Off-hire days, unscheduled | 5 | 0 | -4 | 11 | 18 |
| % of days in combina�on trades1 | 78% | 84% | 88% | 79% | 87% |
| Ballast days in % of total on-hire days | 14% | 17% | 12% | 17% | 13% |
| U�lisa�on2 | 98% | 99% | 97% | 97% | 92% |
Average CLEANBU TCE earnings per on-hire day ended at \$37,537/day, an increase of approximately \$9,600/day from last quarter and up approximately \$725/day compared to Q4 2022. The increase from last quarter reflects mainly a stronger product tanker market supported by a somewhat stronger dry-bulk market. A high share of the capacity continued to be employed in tanker trades (78% in Q4 2023 and 76% in Q3 2023), while share of days in combination trades was down to 78% for Q4 2023 compared to 84% in Q3. Despite two vessels trading mainly in tanker trades to benefit from a very strong US Gulf spot product tanker market, % of days in ballast fell from 17% in Q3 2023 to 14% in Q4 2023. Average TCE earnings for the CLEANBU fleet were in line with the spot market for standard LR14 tanker vessels in the fourth quarter (multiple 1.0).
Average operating costs for the CLEANBU vessels ended at \$9,034/day, down approximately \$925/day from the previous quarter and down approximately \$361/day compared to the same quarter last year mainly due to the settlement of historic CLEANBU newbuilding claims in 2023.
The CLEANBU fleet had 10 scheduled off-hire days in Q4 in relation to the start of one dry-docking. Unscheduled offhire in Q4 related mainly to repairs (5 days).
Average TCE earnings ended at \$35,214/day for the year, up approximately \$2,600/day from 2022 mainly due to a strong product tanker market and a high share of capacity employed in wet trades. Average TCE earnings for the CLEANBU fleet were somewhat outperformed by the spot market for standard LR14 tanker vessels in 2023 (multiple 0.9).
Average operating costs per day for the CLEANBU vessels ended at \$9,458/day in 2023, approximately \$671//day higher than in 2022, mainly due to general inflation, high forwarding costs and condition-based maintenance.
One vessel completed periodic dry-dock in 2023, and one vessel started dry-dock at the end December 2023. The fleet had 11 unscheduled off-hire days in 2023 mainly related to repairs and service time.
3 Ballast in % of on-hire days = Number of days in ballast /number of on-hire days. Ballast days when the vessel is off-hire are not included. 4 Clarksons, MR (CABU) and LR1 (CLEANBU) tanker multiple calculated based on assumption of one-month advance cargo fixing/«lag»
1 % of days in combination trades = see definition on page 3
2 Utilization = (Operating days less waiting time less off-hire days)/operating days
| Average Market Rates with One Month Lag1 | Q4 2023 | Q3 2023 | Q4 2022 | 2023 | 2022 |
|---|---|---|---|---|---|
| P5TC dry bulk earning \$/day | 15 000 | 10 400 | 16 600 | 12 600 | 21 500 |
| Average MR Clean tanker earnings \$/day | 28 000 | 23 700 | 38 700 | 31 500 | 28 100 |
| Average LR1 tanker earning \$/day | 36 300 | 28 800 | 45 000 | 39 100 | 32 000 |
| Fuel price USD/mt | 670 | 600 | 690 | 620 | 750 |
The average Panamax dry bulk earnings increased from \$10,400/day in Q3 2023 to \$15,000/day in Q4 2023 (one month lagged average). Average earnings increased sharply during the fourth quarter from \$14,500/day average in October to ~\$18,300/day in December. The sharp increase can be attributed to delayed effects from the high congestion in East Coast South America where a high share of the Panamax fleet was occupied in port or carrying grain eastward towards the Pacific, restricting available tonnage elsewhere, particularly in the Atlantic basin.
The year-on-year nominal fleet growth at the end of Q3 2023 for the total dry bulk fleet was at ~3.2%2. Moving forward the current disruptions to the Suez and Panama canals increase average sailing distances. As long as these disruptions persist average earnings should trend higher.
The product tanker market strengthened significantly during December partly due to the drought situation in Panama leading to a tonnage supply shortage in the US Gulf. Average spot earnings were at strong levels with LR1 tankers earnings at approximately \$36,300/day and MR tankers at approximately \$28,000/day in Q4 2023, compared to \$28,800/day and \$23,700/day for the two segments in Q32.
Mainly due to the disruption in the Red Sea and the resulting increased ton-mile of routing vessels around the Cape of Good Hope instead of the Suez Canal, the market strengthened further in January 2024. Irrespective of the short or medium-term effects of the situation in the Red Sea, the underlying ton-mile growth is expected to outpace the supply growth throughout the year, resulting in a strong product tanker market for 2024.
Due to weaker domestic demand in China during the winter months, Chinese caustic soda export prices weakened compared to levels in Q3. The Northeast Asian export prices decreased as well due to both weak domestic and international demand, while the prices in the US Gulf seemed to have bottomed out with several of the US producers increasing prices lately. With higher freight costs for imports from US Gulf, Australian importers continue to source caustic soda mainly from the Far East3.
Brent crude oil prices weakened from USD 93 per barrel at the end of September 2023 to USD 77 per barrel at the end of December 2023 with high volatility during the quarter due to the Gaza situation and OPEC+ production numbers. Average fuel oil price (VLSFO) ended at USD 670/mt (one month lagged) in Q4 2023, an increase of 12% Q-o-Q2.
1 Source: Shipping Intelligence Network and Clarkson's Securities; Average LR1 tanker earnings are MEG-Cont and MED-Japan triangulation; All series lagged by one month to reflect advance cargo fixing)
| Health and safety KPIs | Q4 2023 | Q3 2023 | Q4 2022 | 2023 | 2022 | TARGET |
|---|---|---|---|---|---|---|
| 5 Lost Time Injury Frequency (LTIF) |
0.0 | 0.0 | 0.0 | 0.0 | 1.0 | <0.5 |
| High-risk poten�al accidents | 0 | 2 | 0 | 2 | 3 | 0 |
| # of spills to the environment | 0 | 0 | 0 | 0 | 0 | 0 |
KCC had zero Lost Time Injury Frequency and no spills to the environment for Q4 2023 and for 2023 in total, in line with targets. During the year, the fleet experienced two incidents without injury which the ship manager categorized as having high-risk potential. The high-risk potential KPI is tracked with the purpose of putting focus on and learning from the potential accident to improve safety. Both the high-risk potential accidents in 2023 were investigated and preventive actions have or will be implemented.
| ENVIROMENTAL KPIs | Q4 2023 | Q3 2023 | Benchmark Q4 |
2023 | 2022 | TARGET 2026 |
|---|---|---|---|---|---|---|
| CO2-emissions per ton transported cargo per nau�cal mile (EEOI) (grams CO2/(tons cargo x nau�cal miles)) |
6.3 | 6.4 | 9.6 | 6.5 | 6.9 | 5.3 |
| Average CO2 emission per vessel per year (metric tons CO2/vessel-year) |
18,200 | 19,800 | n.a | 18,700 | 17,900 | 16,900 |
| % of days in combina�on trades | 87% | 89% | n.a | 85% | 83% | 85% |
| Ballast days in % of total on-hire days | 12% | 14% | 34% | 14% | 12% | 10% |
The carbon intensity (EEOI) of the KCC fleet was quite stable the last three quarters of 2023 and ended at 6.3 grams CO2 per ton-mile in Q4 2023, while average CO2 emissions per vessel-year decreased by 8% Q-on-Q down to 18,300 mt.
Transport work performed by the fleet remained fairly constant Q-on-Q as longer laden sailed distance and lower ballast were cancelled out by a decrease in average cargo weight. Speed remained quite constant, but the amount of time the vessels spent sailing at speeds above 13 knots decreased from 30% in Q3 to 21% in Q4, contributing to lower CO2 emissions as fuel consumption increases exponentially with vessel speed. The fleet spent more time idling and in port in Q4 compared to Q3, consuming less fuel than when sailing, and operational performance improved as the full fleet was operating with optimized weather routing advise as well as routing focusing on maintaining steady engine load.
KCC's carbon intensity (EEOI) for the full year 2023 improved considerably from 6.9 grams CO2/(tons cargo x nautical miles) in 2022 to 6.5 in 2023. This is 5.8% better than the target for the year as stated in the Environmental Strategy and in the Sustainability-Linked Financing Framework. The Y-o-Y change was driven by more transport work mainly due to higher cargo weight and more time spent sailing at sea as well as lower average speed and continued improved technical performance of the fleet, partly offset by a higher proportion of time sailing in ballast.
The average CO2 emissions per vessel-year for the KCC fleet increased to 18,700 tons in 2023 from 17,900 tons in 2022, an increase of approximately 4% Y-o-Y. The main contributor is time spent sailing at sea which increased from 2022 to 2023, contributing to higher total CO2 emissions.
6 Benchmark: The EEOI and % ballast for "Benchmark standard vessels" are calculated based on standard vessels (Panamax/Kamsarmax dry bulk vessels, MR-tankers and LR1-tankers) making the same transportation work in the same trades as performed by KCC's CABU and CLEANBU vessels. The EEOI for "Benchmark standard vessels" is calculated as the weighted average of EEOI for the individual trades performed. There is a degree of uncertainty related to the benchmark values as these are estimated using data from Baltic Exchange and AXS
1 LTIF per 1 million working hour. Lost Time Injuries (LTIs) are the sum of fatalities, permanent total disabilities, permanent partial disabilities and lost workday cases (injuries leading to loss of productive work time). In line with OCIMF (Oil Companies International Marine Forum)
2 EEOI (Energy Efficiency Operational Index) is defined by IMO and represents grams CO2 emitted per transported ton cargo per nautical mile for a period of time (both fuel consumption at sea and in port included).
3 Average CO2 emissions per vessel = total CO2 emissions in metric tons/vessel years. Vessel years = days available – off-hire days at yard. When new vessels are delivered to the fleet, the vessel years are calculated from the date the vessel is delivered.
4 % of days in combination trades = see definition on page 2.
5 Ballast in % of on-hire days = Number of days in ballast /number of on-hire days. Ballast days when the vessel is off-hire are not included.
The outlook for the product tanker market for 2024 remains strong irrespective of the likely temporary effects from the draught situation in the Panama Canal and the disruption of vessel transits through the Red Sea and Suez. A shift to longer haul trades following the European ban on Russian imports and new refinery capacity east of Suez continue to support ton-mile trade growth prospects.
After an encouraging start to 2024, the dry bulk market outlook for the year is moderately positive. The Panama and the Red Sea situations have also lent support to the dry bulk market in the seasonally weak first quarter of the year. The dry bulk market also looks tight in the second quarter with continued disruptions and expected large grains and coal shipments. Low effective fleet growth and possible prolonged rerouting of vessels from the ongoing disruptions could make the dry bulk market surprise on the upside for the remaining 2024. Uncertainties around Chinese dry bulk demand growth remain the largest risk factor.
During January 2024, the annual caustic soda solution (CSS) contract renewals were finalized. These contracts cover close to the full wet capacity of the CABU fleet for 2024. Approximately 40% of the secured contract days have fixed freight rates concluded at historically strong levels, but somewhat below the 2023 contract rates. The remaining approximately 60% of contract days are covered by indexlinked contracts, accounting for a considerably higher share of contract days than in 2023 (25%-points). With the strong product tanker market to date in 2024, the higher share of index-linked contracts will likely be positive for the CABU TCE earnings in Q1 2024. Based on a current 90% of the CABU days fixed and forward freight pricing (FFA)1 for open days, the CABU TCE earnings guiding for Q1 2024 is \$32,000- 33,000/day.
Alcoa announced in January the full curtailment of their alumina refinery in Kwinana in Western Australia. This closedown will have limited impact on the CABU operations in 2024. It will furthermore not alter KCC's ambition to grow its Australian caustic soda business over the next years, backed by increasing imports to the new Australian lithium refinery industry.
The strong start of the year in the product tanker market is expected to result in record high CLEANBU TCE earnings in Q1 2024. Based on current fixed days equal to 90% of fleet capacity and forward freight pricing (FFA)1 for the open days, TCE earnings for the CLEANBU fleet in Q1 2024 are expected to end at \$48,000-50,000/day.
Due to the large earning's difference between the dry bulk and the product tanker markets, the CLEANBU fleet is expected to maintain a higher share in tanker trading at around 60-70% over the next quarters. The vessels will mainly be employed on index-linked contracts and on spot voyages, and hence are expected to benefit from a likely continued strong product tanker market through 2024. One CLEANBU vessel is employed on time charter until February 2025, secured in early 2023.
1 Source: Klaveness and Baltic Exchange as of February 2024. KMAX dry bulk vessel = P5TC, MR tanker = TC7 TCE, LR1 tanker = TC5 TCE, VLSFO = VSLFO Singapore. Forward TC5/TC7 TCE based on TC5/TC7 FFA assessment and forward VLSFO price.
| Unaudited | Unaudited | Audited | |||
|---|---|---|---|---|---|
| USD '000 | Notes | Q4 2023 | Q4 2022 | 2023 | 2022 |
| Freight revenue | 3 | 65 065 | 59 122 | 247 542 | 205 769 |
| Charter hire revenue | 3 | 11 664 | 13 975 | 39 624 | 54 509 |
| Other revenue | 3 | - | (271) | - | 396 |
| Total revenue, vessels | 76 728 | 72 827 | 287 166 | 260 674 | |
| Voyage expenses | (23 618) | (28 444) | (90 362) | (96 054) | |
| Net revenues from opera�on of vessels | 53 110 | 44 383 | 196 805 | 164 620 | |
| Opera�ng expenses, vessels | (13 114) | (13 549) | (50 237) | (48 575) | |
| Group commercial and administra�ve services | 10 | (1 825) | (1 232) | (5 403) | (4 203) |
| Salaries and social expenses | (1 135) | (932) | (4 086) | (3 458) | |
| Tonnage tax | (74) | (63) | (198) | (188) | |
| Other opera�ng and administra�ve expenses | (426) | (475) | (1 933) | (1 242) | |
| Opera�ng profit before deprecia�on (EBITDA) | 36 536 | 28 134 | 134 947 | 106 955 | |
| Deprecia�on | 4 | (7 455) | (9 105) | (31 842) | (31 344) |
| Opera�ng profit a�er deprecia�on (EBIT) | 29 081 | 19 029 | 103 105 | 75 611 | |
| Finance income | 7 | 1 681 | 1 971 | 7 533 | 3 516 |
| Finance costs | 7 | (4 872) | (5 658) | (23 739) | (18 257) |
| Profit before tax (EBT) | 25 892 | 15 343 | 86 899 | 60 869 | |
| Income tax expenses | - | - | - | - | |
| Profit a�er tax | 25 892 | 15 343 | 86 899 | 60 869 | |
| A�ributable to: | |||||
| Equity holders of the Parent Company | 25 892 | 15 343 | 86 899 | 60 869 | |
| Total | 25 892 | 15 343 | 86 899 | 60 869 | |
| Earnings per Share (EPS): | |||||
| Basic earnings per share | 0.43 | 0.29 | 1.52 | 1.16 | |
| Diluted earnings per share | 0.43 | 0.29 | 1.52 | 1.16 |
| Unaudited | Unaudited | Audited | ||
|---|---|---|---|---|
| USD '000 | Q4 2023 | Q4 2022 | 2023 | 2022 |
| Profit/ (loss) of the period | 25 892 | 15 343 | 86 899 | 60 869 |
| Other comprehensive income to be reclassified to profit or loss | ||||
| Net movement fair value on cross-currency interest rate swaps (CCIRS) | 3 107 | 7 089 | 2 100 | (3 707) |
| Reclassifica�on to profit and loss (CCIRS) | (2 918) | (5 918) | (6 044) | 8 559 |
| Net movement fair value on interest rate swaps | (2 429) | (244) | (2 245) | 11 663 |
| Net movement fair value bunker hedge | (306) | (221) | 126 | (231) |
| Net movement fair value FFA futures | 71 | 337 | 247 | 8 240 |
| Net change on cost of hedging FFA op�on | - | (313) | - | - |
| Net change on in�al value of FFA op�on | - | (44) | - | 123 |
| Net other comprehensive income to be reclassified to profit or loss | (2 475) | 686 | (5 816) | 24 647 |
| Total comprehensive income/(loss) for the period, net of tax | 23 417 | 16 028 | 81 083 | 85 516 |
| A�ributable to: | ||||
| Equity holders of the Parent Company | 23 417 | 16 028 | 81 083 | 85 516 |
| Total | 23 417 | 16 028 | 81 083 | 85 516 |
| ASSETS | Unaudited | Audited | |
|---|---|---|---|
| USD '000 | Notes | 31 Dec 2023 | 31 Dec 2022 |
| Non-current assets | |||
| Vessels | 4 | 497 072 | 516 072 |
| Newbuilding contracts | 5 | 17 591 | - |
| Long-term financial assets | 6 | 6 325 | 7 762 |
| Long-term receivables | 107 | 70 | |
| Total non-current assets | 521 095 | 523 905 | |
| Current assets | |||
| Short-term financial assets | 6 | 1 699 | 4 923 |
| Inventories | 12 123 | 18 898 | |
| Trade receivables and other current assets | 24 942 | 30 061 | |
| Short-term receivables from related par�es | 110 | 202 | |
| Cash and cash equivalents | 6 | 68 071 | 64 918 |
| Total current assets | 106 947 | 119 002 | |
| TOTAL ASSETS | 628 041 | 642 906 | |
| EQUITY AND LIABILITIES | Unaudited | Audited | |
| USD '000 | Notes | 31 Dec 2023 | 31 Dec 2022 |
| Equity | |||
| Share capital | 6 977 | 6 235 | |
| Share premium | 202 852 | 153 732 | |
| Other reserves | 10 722 | 16 491 | |
| Retained earnings | 8 | 141 147 | 121 087 |
| Total equity | 361 698 | 297 545 | |
| Non-current liabili�es | |||
| Mortgage debt | 6 | 154 835 | 156 534 |
| Long-term financial liabili�es | 6 | 657 | 2 466 |
| Long-term bond loan | 6 | 66 897 | 69 975 |
| Total non-current liabili�es | 222 388 | 228 975 | |
| Current liabili�es | |||
| Short-term mortgage debt | 6 | 25 199 | 92 769 |
| Other interest bearing liabili�es | 6 | - | 233 |
| Short-term financial liabili�es | 6 | 328 | 249 |
| Trade and other payables | 17 052 | 22 250 | |
| Short-term debt to related par�es | 1 179 | 693 | |
| Tax liabili�es | 196 | 193 | |
| Total current liabili�es | 43 954 | 116 387 | |
| TOTAL EQUITY AND LIABILITIES | 628 041 | 642 906 |
The Board of Directors of
Oslo, 15 February 2024
Ernst Meyer
Gøran Andreassen
Magne Øvreås
Chair of the Board
Board member
Board member
Winifred Patricia Johansen
Brita Eilertsen
Engebret Dahm
CEO
Board member
Board member
| USD '000 | Share capital |
Other paid in capital |
Treasury Shares |
Hedging reserve |
Cost of hedging reserve |
Retained earnings |
Total |
|---|---|---|---|---|---|---|---|
| Equity 1 January 2023 | 6 235 | 153 732 | (147) | 17 352 | (714) | 121 087 | 297 545 |
| Profit (loss) for the period | - | - | - | - | - | 86 899 | 86 899 |
| Other comprehensive income for the period | - | - | - | (5 816) | - | - | (5 816) |
| Private placement May 2023 (note 8) | 721 | 48 619 | - | - | - | - | 49 340 |
| Warrants (note 8) | 21 | 480 | - | - | - | - | 501 |
| Employee share purchase (note 8) | - | 21 | 50 | - | - | - | 71 |
| Dividends | - | - | - | - | - | (66 836) | (66 836) |
| Equity at 31 December 2023 | 6 977 | 202 852 | (97) | 11 533 | (714) | 141 147 | 361 698 |
| USD '000 | Share capital |
Other paid in capital |
Treasury Shares |
Hedging reserve |
Cost of hedging reserve |
Retained earnings |
Total |
|---|---|---|---|---|---|---|---|
| Equity 1 January 2022 | 6 235 | 153 732 | (147) | (7 294) | (714) | 102 605 | 254 417 |
| Profit (loss) for the period | - | - | - | - | - | 60 869 | 60 869 |
| Other comprehensive income for the period | - | - | - | 24 647 | - | - | 24 647 |
| Share op�on program | - | - | - | - | - | 35 | 35 |
| Dividends | - | - | - | - | - | (42 421) | (42 421) |
| Equity at 31 December 2022 | 6 235 | 153 732 | (147) | 17 352 | (714) | 121 087 | 297 545 |
| Unaudited | Unaudited | Audited | |||
|---|---|---|---|---|---|
| USD '000 | Notes | Q4 2023 | Q4 2022 | 2023 | 2022 |
| Profit before tax | 25 892 | 15 343 | 86 899 | 60 869 | |
| Tonnage tax expensed | 74 | 63 | 198 | 188 | |
| Deprecia�on | 4 | 7 455 | 9 105 | 31 842 | 31 344 |
| Amor�za�on of upfront fees bank loans | 297 | 365 | 1 784 | 1 352 | |
| Gain related to modifica�on of debt | - | - | - | (1 175) | |
| Financial deriva�ves loss / gain (-) | 6 | (285) | (30) | 18 | (232) |
| Gain /loss on foreign exchange | 7 | (149) | (532) | 169 | 207 |
| Interest income | 7 | (1 247) | (1 409) | (7 246) | (3 284) |
| Interest expenses | 7 | 4 573 | 5 293 | 21 481 | 16 698 |
| Change in current assets | (2 371) | (2 198) | 11 985 | (16 504) | |
| Change in current liabili�es | (3 259) | 2 628 | (2 539) | 4 488 | |
| Collateral paid/received on cleared deriva�ves | 6 | (322) | 613 | (186) | 8 901 |
| Interest received | 7 | 1 247 | 1 158 | 4 593 | 3 030 |
| A: Net cash flow from opera�ng ac�vi�es | 31 905 | 30 399 | 148 999 | 105 883 | |
| Acquisi�on of tangible assets | 4 | (1 364) | (2 549) | (12 843) | (10 238) |
| Installments and other cost on newbuilding contracts | 5 | (110) | - | (17 591) | - |
| B: Net cash flow from investment ac�vi�es | (1 474) | (2 549) | (30 434) | (10 238) | |
| Paid in registered capital increase | 8 | - | - | 49 828 | - |
| Transac�on costs on capital increase | - | - | (1 093) | - | |
| Paid in long term incen�ve plan | 8 | - | - | 27 | - |
| Paid in from exercise of warrants | - | - | 501 | - | |
| Transac�on costs on issuance of debt | 6 | - | - | (2 303) | (193) |
| Repayment of mortgage debt | 6 | (6 300) | (6 098) | (164 033) | (24 049) |
| Drawdown of mortgage debt | 6 | - | - | 95 000 | - |
| Repurchase bond incl premium (KCC04) | - | - | (55 478) | - | |
| Proceeds from new bond issue (KCC05) | - | - | 47 112 | - | |
| Interest paid | 7 | (5 139) | (4 662) | (21 905) | (15 378) |
| Repayment of lease liabili�es | - | - | - | (382) | |
| Interest paid leasing | - | - | - | (66) | |
| Termina�on of interest rate deriva�ves | 6 | - | - | 4 001 | - |
| Dividends | (15 115) | (15 712) | (66 836) | (42 421) | |
| C: Net cash flow from financing ac�vi�es | (26 554) | (26 472) | (115 179) | (82 489) | |
| Net change in liquidity in the period | 3 877 | 1 378 | 3 386 | 13 156 | |
| Cash and cash equivalents at beginning of period | 64 194 | 63 307 | 64 685 | 51 529 | |
| Cash and cash equivalents at end of period | 68 071 | 64 685 | 68 071 | 64 685 | |
| Net change in cash and cash equivalents in the period | 3 877 | 1 378 | 3 386 | 13 156 | |
| Cash and cash equivalents | 68 071 | 64 918 | 68 071 | 64 918 | |
| Other interest bearing liabili�es (overdra� facility) | - | 233 | - | 233 | |
| Cash and cash equivalents (as presented in cash flow statement) | 68 071 | 64 685 | 68 071 | 64 685 |
| 01 | Accoun�ng policies |
|---|---|
| 02 | Segment repor�ng |
| 03 | Revenue from contracts with customers |
| 04 | Vessels |
| 05 | Newbuildings |
| 06 | Financial assets and liabili�es |
| 07 | Financial items |
| 08 | Share capital, shareholders and dividends |
| 09 | Salaries |
| 10 | Transac�ons with related par�es |
| 11 | Events a�er the balance sheet date |
Klaveness Combination Carriers ASA ("Parent Company"/"the Company"/"KCC") is a public limited liability company domiciled and incorporated in Norway. The share is listed on Oslo Stock Exchange with ticker KCC. The consolidated interim accounts include the Parent Company and its subsidiaries (referred to collectively as "the Group").
The objectives of the Group are to provide transportation for dry bulk, chemical and product tanker clients, as well as to develop new investment and acquire assets that fit the Group's existing business platform. The Group has eight CABU vessels (see note 4) with capacity to transport caustic soda solution (CSS), floating fertilizer (UAN) and molasses as well as all dry bulk commodities, and three CABU vessels under construction. Further, the Group has eight CLEANBU vessels. The CLEANBUs are both full-fledged LR1 product tankers and Kamsarmax dry bulk vessels.
The interim condensed financial statements of the Group have been prepared in accordance with IAS 34 Interim Financial Reporting. The interim condensed financial statements of the Group should be read in conjunction with the audited consolidated financial statements for the year ended 31 December 2022, which have been prepared in accordance with IFRS Accounting Standards, as adopted by the European Union.
The Group has subsidiaries in various tax jurisdictions, including ordinary and tonnage tax regimes in Norway and ordinary taxation in Singapore. Income from international shipping operations is tax exempt under the Norwegian tax regime, while financing costs are partly deductible. As such, the Group does not incur material tax expenses.
Klaveness Combination Carriers ASA has during 2023 purchased a company, KCC Bass AS, included as a subsidiary in the Group. Purchase price of NOK 80k represented cash in the company with no other business activities at the purchase date.
In March 2023, the CLEANBU vessel, MV Bass was sold from KCC Shipowning AS ("KCCS") to KCC Bass AS (both companies 100 % owned by Klaveness Combination Carriers ASA). The sale was made on arm's length terms based on observable and comparable prices for standard vessels, adjusted for CLEANBU features and based on a discounted cash flow model. KCC Bass AS and KCCS are co-borrowers in the bank debt facility and one of the bank loan tranches was transferred to KCC Bass AS. KCCS also distributed dividends used to capitalize KCC Bass AS. The internal sale transaction and the internal restructuring of loans have no effect on consolidated figures.
In April 2023, a new Long Term Incentive Program (LTIP) was approved. The new program consists of two elements: 1) a share purchase program where employees are offered to purchase shares at a discount, and 2) a share option program with a strike price equal to the market price at the time of grant. The equity-settled share-based payments are treated as an increase in equity at fair value. The purchase price is recognized as a capital increase immediately, and the discount is periodized as a wage/equity increase over the vesting period. Employee share options are calculated at fair value at the time they are granted and charged to expense over the vesting period as payroll cost with a corresponding increase in equity. The market value of the employee share options are estimated based on the Black-Scholes-Merton model.
The accounting policies adopted in the preparation of the interim condensed consolidated financial statements are consistent with those followed in the preparation of the annual consolidated financial statements of the year ended 31 December 2022 except for the adoption of any new accounting standards or amendments with effective date after 1 January 2023. There was no material impact of new accounting standards or amendments adopted in the period.
| Opera�ng income and opera�ng expenses per | ||||||
|---|---|---|---|---|---|---|
| segment | Q4 2023 | Q4 2022 | ||||
| USD '000 | CABU | CLEANBU | Total | CABU | CLEANBU | Total |
| Opera�ng revenue, vessels | 39 896 | 36 832 | 76 728 | 36 773 | 36 324 | 73 097 |
| Voyage expenses | (13 836) | (9 782) | (23 618) | (19 348) | (9 096) | (28 444) |
| Other revenue | - | - | - | - | (271) | (271) |
| Net opera�ng revenues from opera�ons of vessels | 26 060 | 27 049 | 53 110 | 17 426 | 26 958 | 44 383 |
| Opera�ng expenses, vessels | (6 465) | (6 649) | (13 114) | (6 634) | (6 915) | (13 549) |
| Group administra�ve services | (900) | (925) | (1 825) | (603) | (629) | (1 232) |
| Salaries and social expense | (560) | (576) | (1 135) | (456) | (475) | (932) |
| Tonnage tax | (29) | (45) | (74) | (31) | (31) | (63) |
| Other opera�ng and adm expenses | (210) | (216) | (426) | (232) | (242) | (475) |
| Opera�ng profit before deprecia�on (EBITDA) | 17 897 | 18 638 | 36 536 | 9 468 | 18 665 | 28 132 |
| Deprecia�on | (3 423) | (4 031) | (7 455) | (3 584) | (5 521) | (9 105) |
| Opera�ng profit a�er deprecia�on (EBIT) | 14 474 | 14 607 | 29 080 | 5 884 | 13 144 | 19 027 |
| Q4 2023 | Q4 2022 | ||||
|---|---|---|---|---|---|
| CABU | CLEANBU | Total | CABU | CLEANBU | Total |
| 26 060 | 27 049 | 53 110 | 17 426 | 26 958 | 44 383 |
| - | - | - | - | 271 | 271 |
| 26 060 | 27 049 | 53 110 | 17 426 | 27 228 | 44 654 |
| 722 | 721 | 1 442 | 677 | 740 | 1 416 |
| 36 110 | 37 537 | 36 823 | 25 757 | 36 812 | 31 531 |
| Reconcilia�on of opex \$/day | Q4 2023 | Q4 2022 | ||||
|---|---|---|---|---|---|---|
| USD '000 | CABU | CLEANBU | Total | CABU | CLEANBU | Total |
| Opera�ng expenses, vessels | 6 465 | 6 649 | 13 114 | 6 634 | 6 915 | 13 549 |
| Opera�ng expenses, vessels adjusted | 6 465 | 6 649 | 13 114 | 6 634 | 6 915 | 13 549 |
| Opera�ng days | 736 | 736 | 1 472 | 736 | 736 | 1 472 |
| Opex \$/day | 8 784 | 9 034 | 8 909 | 9 014 | 9 395 | 9 204 |
| CABU | CLEANBU | Total | CABU | CLEANBU | Total |
|---|---|---|---|---|---|
| 95 665 | 101 139 | 196 805 | 72 436 | 92 183 | 164 620 |
| - | - | - | - | (396) | (396) |
| 95 665 | 101 139 | 196 805 | 72 436 | 91 787 | 164 224 |
| 2 754 | 2 872 | 5 626 | 2 703 | 2 814 | 5 518 |
| 34 742 | 35 214 | 34 983 | 26 796 | 32 614 | 29 764 |
| 2023 | 2022 |
| Reconcilia�on of opex \$/day | 2023 | 2022 | ||||
|---|---|---|---|---|---|---|
| USD '000 | CABU | CLEANBU | Total | CABU | CLEANBU | Total |
| Opera�ng expenses, vessels | 22 618 | 27 618 | 50 237 | 22 917 | 25 657 | 48 575 |
| Opera�ng expenses, vessels adjusted | 22 618 | 27 618 | 50 237 | 22 917 | 25 657 | 48 575 |
| Opera�ng days | 2 920 | 2 920 | 5 840 | 2 920 | 2 920 | 5 840 |
| Opex (\$/day) | 7 746 | 9 458 | 8 602 | 7 848 | 8 787 | 8 318 |
| USD '000 | Classifica�on | Q4 2023 | Q4 2022 | 2023 | 2022 |
|---|---|---|---|---|---|
| Revenue from COA contracts | Freight revenue | 31 654 | 25 922 | 138 880 | 92 852 |
| Revenue from spot voyages | Freight revenue | 33 411 | 33 200 | 108 662 | 112 917 |
| Revenue from TC contracts | Charter hire revenue | 11 664 | 13 975 | 39 624 | 54 509 |
| Other revenue | Other revenue | - | (271) | - | 396 |
| Total revenue, vessels | 76 728 | 72 827 | 287 166 | 260 674 |
Vessels
| USD '000 | 31 Dec 2023 | 31 Dec 2022 | ||
|---|---|---|---|---|
| Cost price 1.1 | 742 721 | 734 955 | ||
| Dry Docking | 4 959 | 5 620 | ||
| Energy efficiency upgrade | 7 566 | 2 772 | ||
| Technical upgrade | 319 | 1 845 | ||
| Disposal of vessel and drydock | - | (2 472) | ||
| Costprice end of period | 755 564 | 742 721 | ||
| Acc. Deprecia�on 1.1 | 226 650 | 198 092 | ||
| Disposal of vessel and dry dock | - | (2 472) | ||
| Deprecia�on vessels | 31 842 | 31 029 | ||
| Acc. Deprecia�on end of period | 258 492 | 226 650 | ||
| Carrying amounts end of period* | 497 072 | 516 072 | ||
| *) carrying value of vessels includes dry-docking | ||||
| No. of vessels | 16 | 16 | ||
| Useful life (vessels) | 25 | 25 | ||
| Useful life (dry docking) | 2 -3 | 2 -3 | ||
| Deprecia�on schedule | Straight-line | Straight-line | ||
| Reconcilia�on of deprecia�ons | ||||
| USD '000 | Q4 2023 | Q4 2022 | 2023 | 2022 |
| Deprecia�on vessels | 7 455 | 9 105 | 31 842 | 31 029 |
| Deprecia�on right of use assets | - | - | - | 315 |
Three CABU vessels and one CLEANBU vessel completed scheduled dry- docking in 2023 at a total cost of USD 5.0 million. Technical and energy efficiency upgrades of USD 7.9 million are related to general improvement of the technical performance of the vessels and energy efficiency initiatives, deducted by grants from ENOVA of in total USD 1.1 million recognized as per year end 2023. KCC has secured in total approximately USD 1.4 million in grants from ENOVA to finance investments in energy saving solutions for one CABU vessel and one CLEANBU vessel. The dry-dock of the CABU vessel was completed in 2023 and USD 0.8 million in funding was collected from ENOVA. The CLEANBU vessel will complete dry-dock in March 2024.
7 455
9 105
31 842
31 344
Identification of impairment indicators are based on an assessment of development in market rates (dry bulk, MR tanker, LR1 tanker and fuel), TCE earnings for the fleet, vessel opex, operating profit, technological development, change in regulations, interest rates and discount rate. Rises in interest rates in isolation, increases the discount rate used in the calculation of recoverable amount. As previous sensitivity analysis of recoverable amount shows that the decrease in recoverable amount is unlikely to result in a material impairment loss, as per IAS 36.16, this has not been considered an impairment indicator. Expected future TCE earnings for both CABUs and CLEANBUs, diversified market exposure, development in secondhand prices and the combination carriers' trading flexibility support the conclusion of no impairment indicators identified as per 31 December 2023.
1 ENOVA = A Norwegian government enterprise responsible for promotion of environmentally friendly production and consumption of energy
| (USD '000) | 31 Dec 2023 | 31 Dec 2022 |
|---|---|---|
| Cost 1.1 | - | - |
| Yard installments paid | 17 205 | - |
| Other capitalized cost | 386 | - |
| Net carrying amount | 17 591 | - |
The Group had per 31 December 2023 three CABU combination carrier newbuildings on order at Jiangsu New Yangzi Shipbuilding Co., Ltd in China. The contract price is USD 56.7 million per vessel and estimated delivery costs are approximately USD 60 million per vessel. The expected delivery of the vessels is Q1-Q3 2026.
Installments of USD 17.2 million were paid as of year end 2023. The newbuildings are partly financed through equity raised in 2023 and cash on the balance sheet, and there were no borrowings related to the newbuilds as of 31 December 2023. Project fees of USD 0.4 million were capitalized during 2023.
In December 2023 the 364-days overdraft facility was extended by additional 364 days. The commitment under the overdraft facility was reduced from USD 15 million to USD 8 million based on the Group's reevaluated need.
| Mortgage debt | Descrip�on | Interest rate | Maturity | Carrying amount |
|---|---|---|---|---|
| DNB/SEB/SRB/SPV Facility** | Term Loan/RCF, USD 190 million | Term SOFR + 2.1 % | June 2028 | 88 518 |
| Nordea/Credit Agricole Facility* | Term Loan/RCF, USD 60 million | Term SOFR + 2.25 % | March 2027 | 32 294 |
| Nordea/ Danske Facility/* | Term Loan, USD 80 million | Term SOFR + CAS + 2.1 % | December 2026 | 62 588 |
| Capitalized loan fees | (3 367) | |||
| Mortgage debt 31 December 2023 |
In September 2023, KCC completed a new senior unsecured sustainability-linked bond issue of NOK 500 million with maturity date 5 September 2028 (KCC05). The bond carries a coupon of 3 months NIBOR + 365 bps p.a. with quarterly interest payments. The bond has a borrowing limit of NOK 1 bn and the repayment amount is linked to the Company's sustainability performance. The sustainability-linked financing framework and the bond terms can be found on the Company's website. The bond issue has been hedged to USD at USDNOK 10.613 and bears an interest rate of 3 months SOFR + 414 bps p.a. In connection with the issue of KCC05, KCC repurchased NOK 508.5 million of the KCC04 bond issue.
| USD'000 | Face value | Carrying Amount | |
|---|---|---|---|
| Bond loan | NOK'000 | Maturity | 31 Dec 2023 |
| KCC04 | 700 000 | 11.02.2025 | 76 390 |
| Realized exchange rate gain at buyback | (7 208) | ||
| Buyback KCC04 (Q3 2023) | (508 500) | (54 978) | |
| Exchange rate adjustment | 4 566 | ||
| Capitalized expenses | (86) | ||
| Bond discount | (82) | ||
| Sum KCC04 | 191 500 | 18 602 | |
| KCC05 | 500 000 | 05.09.2028 | 46 971 |
| Exchange rate adjustment | 2 035 | ||
| Capitalized expenses | (711) | ||
| Sum KCC05 | 500 000 | 48 295 | |
| Total bond loan | 691 500 | 66 897 |
As per 31 December 2023, USD 178k of the Group's total cash balance was classified as restricted cash. The restricted cash consists of employee tax withholding.
The Group is subject to certain financial covenants and other undertakings in financing arrangements. As per 31 December 2023 the Group was in compliance with all financial covenants. For further details on covenants please see the 2022 Annual Report.
| USD '000 | Fair value | Carrying amount | Carrying amount |
|---|---|---|---|
| Interest bearing liabili�es | 31 Dec 2023 | 31 Dec 2023 | 31 Dec 2022 |
| Mortgage debt | 158 201 | 158 201 | 159 664 |
| Capitalized loan fees | - | (3 367) | (3 131) |
| Bond loan | 68 798 | 67 777 | 70 660 |
| Bond discount | - | (82) | (158) |
| Capitalized expenses bond loan | - | (797) | (527) |
| Total non-current interest bearing liabil�es | 226 999 | 221 732 | 226 509 |
| Mortgage debt, current | 25 199 | 25 199 | 92 769 |
| Overdra� facility (Secured) | - | - | 233 |
| Total interest bearing liabili�es | 252 198 | 246 931 | 319 511 |
| Financial assets | 31 Dec 2023 | 31 Dec 2022 |
|---|---|---|
| Financial instruments at fair value through OCI | ||
| Cross-currency interest rate swap | 1 891 | 1 272 |
| Interest rate swaps | 5 762 | 11 110 |
| Fuel Hedge | 87 | - |
| Financial instruments at fair value through P&L | ||
| Forward currency contracts | 285 | - |
| Interest rate swaps | - | 303 |
| Financial assets | 8 024 | 12 685 |
| Current | 1 699 | 4 923 |
| Non-current | 6 325 | 7 762 |
| Financial liabili�es | 31 Dec 2023 | 31 Dec 2022 |
|---|---|---|
| Financial instruments at fair value through OCI | ||
| Cross-currency interest rate swap | 985 | 2 466 |
| Fuel hedge | - | 249 |
| Financial liabili�es | 985 | 2 715 |
| Current | 328 | 249 |
| Non-current | 657 | 2 466 |
USD' 000
USD' 000
| Finance income | Q4 2023 | Q4 2022 | 2023 | 2022 |
|---|---|---|---|---|
| Other interest income | 1 247 | 1 409 | 4 594 | 2 109 |
| Gain related to modifica�on of debt | - | - | - | 1 175 |
| Fair value changes interest rate swaps | - | 30 | - | 232 |
| Gain on currency contracts | 285 | - | 285 | - |
| Gain on terminated cross-currency swaps | - | - | 2 652 | - |
| Other financial income | - | - | 1 | - |
| Gain on foreign exchange | 149 | 532 | - | |
| Finance income | 1 681 | 1 971 | 7 533 | 3 516 |
Finance cost Interest expenses mortgage debt Interest expenses bond loan Interest expenses lease liabili�es Amor�za�on capitalized fees on loans Other financial expenses Fair value changes interest rate swaps Loss on foreign exchange Finance cost Q4 2023 3 181 1 126 - 297 266 - - 4 872 Q4 2022 3 900 1 394 - 365 - - - 5 658 2023 13 590 5 756 - 1 784 2 135 303 169 23 739 2022 11 769 4 767 66 1 352 97 - 207 18 257
Other financial expenses of USD 2.1 million in 2023, include premium paid on the repurchase of KCC04 of USD 1.9 million. Gain of USD 0.3 million on USD/NOK futures maturing in 2024.
Dividends of USD 15.1 million were paid to the shareholders in November 2023 (USD 0.25 per share). A total of USD 66.8 million in dividends were paid to shareholders during 2023.
On 22 June 2023, Senior Executives in the Company purchased in total 13 500 shares in KCC through the Company's Long-Term Incentive Plan (LTIP), where 10 000 were purchased by the CEO. The Company used Treasury shares to settle the transactions. In connection to this share purchase, the Senior Executives were awarded 40 500 share options in the Company of which 30 000 were awarded to the CEO. As of 31 December 2023, the CEO, Engebret Dahm holds 30 532 shares and 30 000 options in the Company.
On 30 May 2023, the Company completed a capital increase of USD 49.8 million through a private placement to partly fund three CABU newbuildings. The Board approved the allocation of 7 857 143 shares in the private placement at a price of NOK 70.00 per share.
On 11 August and 6 September 2023, Hundred Roses Corporation, EGD Shipholding AS and Rederiaksjeselskapet Torvald Klaveness exercised all their warrants in the Company. The exercises increased equity by USD 0.5 million. As of 31 December 2023, there are no outstanding warrants.
| Shares | Share capital (NOK) | |
|---|---|---|
| Shares and share capital at 31 December 2022 | 52 372 000 | 52 372 000 |
| Shares issued 30 May 2023 | 7 857 143 | 7 857 143 |
| Shares issued 11 August 2023 (warrants) | 14 020 | 14 020 |
| Shares issued 6 September 2023 (warrants) | 215 068 | 215 068 |
| Shares and share capital at 31 December 2023 | 60 458 231 | 60 458 231 |
| Q4 2023 | Q4 2022 | |
| Weighted average number of ordinary shares for basic EPS | 60 458 231 | 52 331 922 |
| Effects of dilu�on from: | ||
| Share op�ons (note 9) | 50 587 | 65 280 |
| Warrants | - | 229 088 |
| Weighted average number of ordinary shares for the effect of dilu�on | 60 508 818 | 52 626 290 |
| 2023 | 2022 | |
| Weighted average number of ordinary shares for basic EPS | 56 996 430 | 52 331 922 |
| Effects of dilu�on from: | ||
| Share op�ons (note 9) | 43 717 | 65 280 |
| Warrants | 155 255 | 229 088 |
| Weighted average number of ordinary shares for the effect of dilu�on | 57 195 402 | 52 626 290 |
In the option program granted in December 2019, the CEO and CFO were granted 38,580 and 26,700 options, respectively. As all options under the 2019 Long-Term Incentive Plan (LTIP) have vested, the Board proposed a new LTIP that was approved by the General Meeting in April 2023. Details on the new LTIP, options granted in June 2023 and fair value calculation are described in the Q2 2023 report, note 8, published on the Company's homepage (www.combinationcarriers.com) Investor Relations/Reports and Presentations under the section for the Q2 2023 report.
On 22 February 2023, the CEO of Klaveness Combination Carriers ASA, Engebret Dahm, exercised all his 38,580 options in the Company against cash settlement by the Company. The share options were granted in December 2019 and were fully vested in December 2022. The option settlement in cash of USD 0.2 million is recognized as payroll expenses in Q1 2023.
On 4 November 2023, the CFO of Klaveness Combination Carriers ASA, Liv Hege Dyrnes, exercised all her 26,700 options in the Company against cash settlement by the Company. The share options were granted in December 2019 and were fully vested in December 2022. The option settlement in cash of USD 0.2 million is recognized as payroll expenses in Q4 2023.
The following table summarizes the option activity as per 31 December 2023:
| Average exercise price | 2023 | 2022 | |
|---|---|---|---|
| Opening balance 1 January | 65 280 | 65 280 | |
| Granted during the year | NOK 69.5 | 40 500 | 0 |
| Exercised during the year | - 65 280 | 0 | |
| Forfeited during the year | 0 | 0 | |
| Expired during the year | 0 | 0 | |
| Outstanding at 31 December | 40 500 | 65 280 |
The fair value of the share options granted is calculated to USD 119k, i.e. USD 1.91 per share option. The cost incurred in 2023 was USD 16k where USD 8k was recognized in Q4.
| Type of services/transac�ons | Provider1 | Price method | Q4 2023 | Q4 2022 | 2023 | 2022 |
|---|---|---|---|---|---|---|
| Pool par�cipa�on2 | BAU | Standard pool agreement | - | - | - | 49 |
| Dry bulk chartering | KC | 1.25% of transac�on value3 | - | - | - | (472) |
| Total net revenue from related par�es | - | - | - | (423) |
Relets of dry bulk cargoes between KCCC and KC (related party in the Torvald Klaveness Group) are made at spot pricing without any compensation either way.
| Type of services/transac�ons | Provider1 | Price method | Q4 2023 | Q4 2022 | 2023 | 2022 |
|---|---|---|---|---|---|---|
| Business adm. services | KAS | Cost + 5% | 483 | 471 | 1 944 | 1 641 |
| Business adm. services | KA Ltd | Cost + 5% | 25 | 46 | 139 | 160 |
| Business adm. services | KD | Priced as other Cargovalue services |
5 | - | 5 | - |
| Commercial services* | KAD | Cost + 7.5% | 163 | - | 381 | - |
| Commercial services | KDB | Cost + 7.5%4 | 70 | 149 | 293 | 279 |
| Commercial services | KSM | Cost + 7.5% | 327 | 182 | 990 | 825 |
| Board member fee | KD | Fixed fee as per annual general mee�ng |
(6) | - | (24) | - |
| Subscrip�on Cargo Value (linked to COA with external party) |
CIA | Fixed fee | - | - | - | 60 |
| Project management | KSM | Cost + 7.5% | 757 | 384 | 1 674 | 1 237 |
| Total group commercial and administra�ve services | 1 825 | 1 232 | 5 403 | 4 202 |
Some bunker purchases are done through KC which holds the bunker contracts with suppliers in some regions. No profit margin is added to the transactions, but a service fee is charged based on time spent (cost +7.5%) reflecting the time spent by the bunkering team and charged as part of the commercial services from KDB.
*Two employees were transferred from Singapore to Dubai from 1 August 2023. KCC does not have set-up in Dubai and the employees have hence been transferred from a KCC company to a related company in the Torvald Klaveness Group and are hired back by a KCC company at cost + 7.5%. The amount includes salary and employee bonus for 2023.
| USD' 000 | ||||||
|---|---|---|---|---|---|---|
| Type of services/transac�ons | Provider1 | Price method | Q4 2023 | Q4 2022 | 2023 | 2022 |
| Technical mngmnt fee (opex) | KSM | Fixed fee per vessel | 1 109 | 955 | 4 117 | 3 819 |
| Crewing and IT fee (opex) | KSM | Fixed fee per vessel | 368 | 391 | 1 496 | 1 565 |
| Board member fee (administra�ve expenses) |
KAS | Fixed fee as per annual general mee�ng |
20 | 21 | 80 | 85 |
| Total other services/ transac�ons | 1 497 | 1 366 | 5 693 | 5 468 |
2 Pool hire from BAU to KCC less pool management fee. MV Bangor entered the pool in August 2021 and exited the pool agreement on 3 January 2022.
4 From 1 July 2022 the service fee for dry bulk chartering and FFA/bunker derivatives trading is based on time spent (cost + 7.5%), prior to this the fee was 0.1% of transaction fee.
1 Klavness AS (KAS), Klavness Ship Management S (KSM), Klavness Asia Pte.Ltd (KA Ltd), Baumarine AS (BAU), Cargo Intelligence AS (CIA), Klavness Dry Bulk AS (KDB), AS Klavness Chartering (KC), Klaveness Asia Pte. Ltd – Dubai Branch (KAD), Klaveness Digital AS (KD)
3 Fixture fee applicable for fixtures in first half 2022. From 1 July 2022 the service fee was based on time spent (cost + 7.5%) and included in "Total group commercial and administrative services" .
On 15 February 2024, the Company's Board of Directors declared to pay a cash dividend to the Company's shareholders of USD 0.35 per share for fourth quarter 2023, in total approximately USD 21.2 million.
Based on the escalating situation in the Red Sea area, KCC has decided to not trade any of its vessels through the Red Sea until the situation improves. The CABUs do not trade in the area, while the CLEANBUs from time-to-time transits through the Red Sea. The decision is expected to have limited impact on KCC business activities and financial performance.
There are no other events after the balance sheet date that have material effect on the Financial Statement as of 31 December 2023.
Building tools?
Free accounts include 100 API calls/year for testing.
Have a question? We'll get back to you promptly.