Earnings Release • May 27, 2020
Earnings Release
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Q1 2020 Presentation Oslo, 27 May 2020
This presentation has been prepared by Klaveness Combination Carriers ASA (the "Company") and is furnished to you for information purposes only and may not be reproduced or redistributed, in whole or in part, to any other person. The presentation does not constitute or form part of any offering of securities, and the contents of this presentation have not been reviewed by any regulatory authority.
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Business and market update
2020 Q1 results
Summary and outlook
Substantially lower carbon intensity than standard vessels (EEOI)
Ambitious and detailed environmental policy and strategy
LR1 tanker earnings Dry bulk earnings
| Strong CABU and CLEANBU TCE earnings in combi-trades |
• CABU of \$20,283/day • CLEANBU of \$20,932/day |
|---|---|
| Improved EBITDA and positive EBT |
• 40% EBITDA improvement compared to Q4 2019 • EBT of USD 4.3 million in Q1 2020 |
| Expanding tanker coverage in a strong tanker market |
• CLEANBU tanker TC contracts 2x 3-6 + 1x 9-12 months durations • Two CABU CSS COA renewals for 1 and 3 years |
| Fully financed after securing bank financing for CLEANBU 7 & 8 |
• Up to USD 60 million loan facility credit approved for 2021 newbuilds • Issue of KCC04 NOK 500 million bond and partly repurchase of KCC03 |
| Tripling dividend payment for Q1 2020 |
• ~ USD 1.44 million / USD 0.03 per share dividends |
Business and market update
2020 Q1 results
Summary and outlook
Enclosures
Increasing Australian imports from Far East due to tight situation in US Caustic soda market following reduced US operating rates
US and Far East export prices of CSS in dry mt
Solid CSS cargo bookings in 1st half 2020 – positive outlook for 2nd half 2020
USD per onhire day (LHS) and % in combi trade. Premium to standard MR-tankers (T) and panamax dry bulk (B) in table below.
USD per onhire day (LHS). Premium to standard MR-tankers (T) and panamax dry bulk (B) in table below.
Source: Baltic Exchange, Clarksons Note: TCE Earnings per onhire day is an alternative performance measure (please see slide 31-33 in enclosures for more details)
CLEANBU onhire days CLEANBU TCE earnings per onhire day (\$/d)
CLEANBU TCE Earnings USD per onhire day (LHS) and % in combi trade. Premium to standard LR1 (T) and Kamsarmax dry bulk vessels (B)1
1) Source: Clarksons, Baltic Exchange Note: TCE Earnings USD per onhire day is an alternative performance measure (please see slide 31-33 in enclosures for more details)
Note: OPEX USD per day (CABU Opex \$/d) is an alternative performance measure (please see slide 31-33 in enclosures for more details)
Note: EEOI (Energy Efficiency Operational Index) is defined by IMO and represents CO2 emitted per transported cargo per nautical mile for a period of time (both fuel consumption at sea and in port included). In theory, this index will show the good energy efficiency for well as one or two longer ballast voyages e.g. when positioning CABU vessels to/from trading in Americas. These variations are evident when we look at the historical numbers, but will most likely be more stable when we have a larger fleet. End date of a voyage is decisive for which period EEOI for a voyage is included. The average CO2 emissions per vessel is calculated based on the total CO2 emissions for the fleet, divided on the number of ship years. Number of ship years is the total calendar time minus off-hire time while new delivered vessels are counted from date of delivery. Quarterly figures are annualized for average CO2 emission per vessel.
16
China daily coal consumption year-over-year %-change
17
1) Source: Baltic Exchange, Company data 2) Balance per mid May 2020, see enclosures for detailed coverage overview
*2H 2020: Operational coverage (Fixed rate + Floating rate coverage)=38% | Financial coverage (Fixed rate coverage+FFA = 34%)
2) Balance per mid May 2020, see enclosures for detailed coverage overview
Business and market update
2020 Q1 results
Summary and outlook
| Income Statement ('000 USD) |
Q1 2020 |
Q4 2019 |
Q1 2019 |
|---|---|---|---|
| Net revenues | 22 403 | 18 826 | 13 326 |
| Operating expenses, vessels | (8 253) | (8 512) | (6 962) |
| SG&A | (1 325) | (1 275) | (1 627) |
| EBITDA | 12 825 | 9 038 | 4 737 |
| EBITDA adjusted1 | 12 856 | 9 193 | 5 289 |
| Depreciation | (4 354) | (4 530) | (2 778) |
| EBIT | 8 472 | 4 508 | 1 958 |
| Net financial items | (4 158) | (2 759) | (2 761) |
| Profit before tax (EBT) | 4 314 | 1 749 | (802) |
| Tax | - | (15) | - |
| Profit after tax | 4 314 | 1 734 | (802) |
| EPS | 0.09 | 0.04 | (0.02) |
Year-on-year adjusted EBITDA1 (MUSD)
Q1 2020 vs Q1 2019
Quarter-on-quarter adjusted EBITDA1 (MUSD)
Q1 2020 vs Q4 2019
1) Estimated total interest bearing debt based on current knowledge about delivery dates of newbuilds. Numbers include bank debt for two newbuilds with delivery in 2021 where bank debt has been credit approved, estimated to be concluded in Q2 2020. Short term overdraft facility not included. NOK 400mn of KCC04 bond hedged to USD.
31 Dec 2019 31 Mar 2020
Business and market update
2020 Q1 results
Summary and outlook
| Strong CABU outlook on the back of high CSS bookings |
• 100% of CABU capacity booked for 2Q 2020 - guiding increased to \$19-20,000/day • Strong CSS cargo bookings - ~70% of capacity booked for 2H 2020. • Positive trade outlook despite COVID-19 situation |
|---|---|
| Stronger CLEANBU earnings based on concluded tanker coverage |
• 100% of CLEANBU capacity booked for 2Q 2020 – guiding \$28-29,000/day • TC-fixtures and FFAs secure ~ 60% of CLEANBU tanker market exposure in 2H 2020 • Phase-in of CLEANBU vessels progressing |
| COVID-19 risks, but upside potential in dry and fuel markets when world economy "restarts" |
• Continued high uncertainties in the current COVID-19 situation, but world economy has likely passed the through in April-May • KCC resilient being fully financed and having solid cash position • Upside potential in dry bulk and fuel market |
Business and market update
2020 Q1 results
Summary and outlook
| CABU: CSS contract coverage | Dry bulk contract coverage | ||||||
|---|---|---|---|---|---|---|---|
| # of days | Q2 2020 | 2H 2020 | 1H 2021 | # of days | Q2 2020 | 2H 2020 | 1H 2021 |
| Fixed rate COA/Spot | 439 | 457 | 188 | Fixed rate COA/Spot | 300 | 254 | 70 |
| Floating rate COA | 16 | 119 | 150 | Floating rate COA | 0 | 90 | 210 |
| Total contract days | 455 | 576 | 338 | Total contract days | 300 | 344 | 280 |
| FFA coverage | - | - | - | FFA coverage | 40 | 90 | - |
| Available wet days | 455 | 787 | 751 | Available wet days | 393 | 915 | 1 342 |
| CLEANBU: CPP contract coverage | ||||
|---|---|---|---|---|
| # of days | Q2 2020 | 2H 2020 | 1H 2021 | |
| Fixed rate COA/Spot | 231 | 231 | 42 | |
| Floating rate COA | - | - | - | |
| Total contract days | 231 | 231 | 338 | |
| FFA coverage | - | 97 | 23 | |
| Available wet days | 231 | 526 | 684 |
Definitions and reconciliation
Reconciliation of average TCE earnings USD/day
| USD'000 | CABU | CLEANBU | Total Q1 2020 |
|---|---|---|---|
| Net revenues from operations of vessels | 16453 | 5953 | 22 406 |
| IFRS 15 adjustment (load-to-discharge) | 80 | (340) | (259) |
| Net revenues ex IFRS adjustment | 16 534 | 5613 | 22 147 |
| Onhiredays | 815 | 268 | 1083 |
| TCE earnings (\$/d) | 20 283 | 20 932 | 20 444 |
Reconciliation CLEANBU earnings in combi trade and outside combi trade
| USD'000 | Main combi | Outside combi | Total CLEANBU |
|---|---|---|---|
| Q1 2020 | |||
| Net revenues from operations of vessels | 4565 | 1388 | 5953 |
| IFRS 15 adjustment (load-to-discharge) | (310) | (30) | (340) |
| Net revenues ex IFRS adjustment | 4 2 5 5 | 1358 | 5 6 1 3 |
| Not corrected adjustment on Q1 voyage* | ٠ | 200 | 200 |
| Net revenue adjusted | 4 2 5 5 | 1558 | 5813 |
| Onhiredays | 177 | 91 | 268 |
| TCE earnings (\$/d) | 24 000 | 17 120 | 21 670 |
Reconciliation Opex \$/d CLEANBU vessels in operations
| Reconciliation of CLEANBU opex per day | |
|---|---|
| USD'000 | Q1 2020 |
| Operating expenses, vessels | 2.515 |
| Leasing cost previously presented as opex | 27 |
| Start-up cost CLEANBU vessels | 31 |
| Crew cost after delivery (adj/reclass) | |
| Operating expenses vessels not delivered | 207 |
| Operating expenses, vessels in operation | 2305 |
| Operating days | 273 |
| Opex per day (\$/d) for vessels in operation | 8 44 2 |
| USD'000 | Q1 2020 |
|---|---|
| Profit before tax (EBT) | 4314 |
| Compensation cancelled COA volumes in 2019 | (677) |
| Start up costs CLEANBU vessels | 31 |
| Reversal provision | |
| Realised effects repurchase of KCC03 (Q1 2020, note 7) | 651 |
| Fair value changes interest rate swaps (mainly realised effects, Q1 | 293 |
| Loss on foreign exchange | 255 |
| Underlying EBT | 4867 |
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