AI assistant
Nekkar — Interim / Quarterly Report 2015
May 13, 2015
3669_rns_2015-05-13_0ecd03c4-f31f-4d06-bf7b-63bd10e1ea89.pdf
Interim / Quarterly Report
Open in viewerOpens in your device viewer
HIGHLIGHTS FOR THE 1TH QUARTER 2015.
Financial highlights for the quarter were:
- Turnover in the quarter was MNOK 593 (554). $\bullet$
- 1st quarter EBITDA reported at MNOK 0.6 (-28.4).
- Net loss in the quarter was MNOK -28 (-47).
- Total EPS for the quarter was NOK -0,32 (-0,54). $\bullet$
- Order backlog at the end of the quarter was MNOK 3 247 (3 109). $\bullet$
- Order intake in the quarter was MNOK 301 (598). $\bullet$
| Q1 Periodic | Full Year | ||
|---|---|---|---|
| MNOK | 2015 | 2014 | 2014 |
| Turnover | 593 | 554 | 2 4 5 4 |
| EBITDA | 0.6 | $-28,4$ | 105,2 |
| EBITDA margin (%) | 0.1 | $-5,1$ | 4,3 |
| Order intake | 301 | 598 | 2 4 4 6 |
| Order backlog* | 3 2 4 7 | 3 1 0 9 | 3627 |
| EPS (NOK) Total | $-0,32$ | $-0,54$ | 0,21 |
| EPS (NOK) Continued $\sim$ $\sim$ $\sim$ $\sim$ $\sim$ $\sim$ $\sim$ $\sim$ |
$-0,32$ $L - F\triangle F\triangle$ |
$-0,54$ $\overline{\phantom{a}}$ |
$-0,25$ |
KEY FIGURES
(*) Order backlog includes 50% of backlog in the 50/50 owned Chinese companies.
Increased activity in several segments has led to increased turn over compared with the same period last year, even though reduced activity in the segments Offshore and Container/Bulk/Tank are dragging the overall improvement.
EBITDA in the 1st quarter was MNOK 0.6, up from MNOK -28.4 in the 1st quarter last year. The EBITDA for the quarter is reduced compared to the last quarter of 2014, mainly because of reduced activity in Asia in the 1st quarter due to Chinese new-year as well as the positive one time effect from changed pension plans which improved the $4th$ quarter of 2014 by MNOK 105. Further, challenging markets and low utilization in the Container/Bulk/Tank and Offshore segments and poor project performance in some large projects have contributed negatively to the quarter.
The order intake for the 1st quarter of 2015 was MNOK 301, compared to MNOK 598 in the 1st quarter of 2014, the main reason being low order intake in the offshore segment and RoRo/Cruise/Navy. The lower order intake in the offshore segment is expected. Apart from that, the reduction is believed to be caused by variations in the timing of signing of orders, which is confirmed by the order intake of MNOK 375 in April. New sales reported from the 50/50 owned companies in China are still at an acceptable level.
The order backlog* was MNOK 3 247, up from MNOK 3 109 at the end of 1st quarter 2014. *including 50% of the order backlog, 1170 (640), from the 50/50 owned companies in China.
TOTAL ASSETS AND NET INTEREST BEARING DEBT
Total assets at the end of 1st quarter 2015 was MNOK 2 558, an increase of MNOK 147 since 2014. The change is mainly due to increased negative market value of financial derivatives for hedging of foreign exchange risk. Net working capital has increased by approximately MNOK 77 during this quarter. The net working capital is MNOK 48.
In the 1st quarter of 2015 net interest bearing debt increased by MNOK 95 to MNOK 357.
TTS has covenants for both equity ratio and 12 months rolling EBITDA related to its debt and bonding facilities with Nordea and DNB, which were negotiated in 4th quarter 2014. At the end of the 1st quarter 2015, the group is in compliance with the covenants (ref. note 13). The debt- and bonding facilities mature in the $4th$ quarter 2015. The Group's bank loans of MNOK 100 have been classified as short term debt in the reported balance at 31 March.
There were no conversions in the subordinated convertible bond in the first quarter.
ACCOUNTING PRINCIPLES
The company has prepared the interim financial report in accordance with IAS 34. The accounting principles applied are explained in detail in the 2014 annual report. There were no changes to the accounting principles in 2015.
SEGMENTS
$\overline{\phantom{a}}$
As from the $3rd$ quarter of 2014, TTS reports its operations in 6 business segments.
| MNOK | Q1 Periodic | Full Year | |
|---|---|---|---|
| 2015 | 2014 | 2014 | |
| Turnover | 160 | 135 | 599 |
| EBITDA | 15 | 11 | 77 |
| Order backlog | 707 | 834 | 854 |
RoRo/Cruise/Navy (RCN)
The RCN segment reports improvement in both turnover and profit. The results reflect TTS Group's strong position in the PCTC-market.
The outlook for the segment is positive. Although order backlog is reduced somewhat, it gives a sound basis for satisfactory turn-over and margins in the quarters to come. Proven solutions, and repeat orders from demanding customers within the PCTC market gives basis for expected high activity.
Container/Bulk/Tank (CBT)
| Q1 Periodic | Full Year | |||
|---|---|---|---|---|
| MNOK | 2015 | 2014 | 2014 | |
| Turnover | 72 | 112 | 422 | |
| EBITDA | $\mathcal{D}$ | $-5$ | ||
| Order backlog *) | 1601 | 1 192 | 1687 |
*Order backlog includes 50% of backlog from 50/50-owned companies in China.
The turnover in 1st quarter is reduced from last year. YTD turnover is affected by generally lower activity at South Korean yards, as well as fierce market competition. Focus on overall efficiency, restructuring and the Momentum initiative compensates for the effect of reduced turnover, to yield an EBITDA on par with last year. Profit from JV-companies in the $1st$ quarter is MNOK 8,4.
The order back log is still high due to strong order intake in 2014 in the 50/50companies, although lower 1st quarter order intake is lower because of the reduced new build activity in the Bulk market.
The outlook for the segment is affected by the fierce market competition and reduced new build activity in the bulk market, and the profit margins are pressed. During the quarter. TTS has completed the reorganizing of the segment, including transfer of product responsibility and the production process to South Korea.
Offshore
| Q1 Periodic | Full Year | ||
|---|---|---|---|
| MNOK | 2015 | 2014 | 2014 |
| Turnover | 79 | 121 | 572 |
| EBITDA | $-24$ | $-26$ | $-50$ |
| Order backlog | 230 | 524 | 254 |
Reported EBITDA in the quarter is affected by the downturn in the offshore market. and is on level with 1st quarter 2014. The margin reflects restructuring cost, lower activity and continuing cost challenges for some projects.
Order backlog has decreased by MNOK 294 from 1st quarter 2014, due to low order intake as a consequence of the challenging market.
TTS has taken strong cost-reducing measures to adjust activities and capacity to the current slow market. Following the segment restructuring in 2014, new adjustments are being executed in 2015 in order to match capacity with order backlog and market conditions. The segment is expected to show low utilization and low margins in the quarters to come.
Multipurpose/General Cargo
| Q1 Periodic | ||||||
|---|---|---|---|---|---|---|
| MNOK | 2015 | 2014 | 2014 | |||
| Turnover | 94 | 28 | 138 | |||
| EBITDA | -4 | $-13$ | $-35$ | |||
| Order backlog | 445 | 281 | 562 |
The Multipurpose/General Cargo segment shows an increased turnover compared to the same period last year. Although still reporting a quarterly loss, the EBITDA has improved compared to the 1st quarter last year.
As indicated by the increased order backlog, the market for heavy lift cranes is improving. Cost cutting initiatives in 2013, where TTS Group levelled the segment capacity to a slow market, gives basis for TTS to take part in an improved market. Following the approach on the Chinese market during 1st quarter (ref note 14), the new company TTS-SCM established by TTS in December 2014 together with South China Marine Machinery Ltd (controlled by China State Shipbuilding Company Ltd). has signed strategically important contracts for delivery of marine equipment packages, consisting of heavy lift cranes, hatch covers and winches to six new multipurpose heavy lift vessels to COSCO with a total order value up to approximately MNOK 270.
Shipyard Solutions
$\alpha$ and $\alpha$ and $\alpha$
| MNOK | Q1 Periodic | Full Year | |
|---|---|---|---|
| 2015 | 2014 | 2014 | |
| Turnover | 51 | 37 | 192 |
| EBITDA | 4 | $-3$ | 32 |
| Order backlog | 265 | 278 | 271 |
The 1st quarter 2015 figures reflect the segment's market position in a niche market for shiplift and transfer systems and other logistics solutions for the production industry. The profitability for the segment improved compared to the 1st quarter of 2014.
The order backlog represents a sound operational fundament for the quarters to come. Future development is particularly influenced by the focus on capacity. restructuring and productivity in the shipvard industry.
| SELAICES | |||
|---|---|---|---|
| Q1 Periodic | Full Year | ||
| MNOK | 2015 | 2014 | 2014 |
| Turnover | 136 | 120 | 530 |
| EBITDA | 13 | 96 |
Turnover in the 1st quarter of 2015 has increased by 13% compared to turnover in the same period of 2014.
1st quarter EBITDA margin in the segment is improved compared to 1st quarter of 2014. The EBITDA margin for the quarter is slightly lower than the 2014 EBITDA adjusted for the 37 MNOK positive pension effects in 2014.
Market demand in the segment provides basis for increased turnover, and improvement to the overall profit margin, however the service market remains influenced by low ship charter rates in some segments.
OUTLOOK
The total shipbuilding market is expected to improve in line with increased demand for sea transport. TTS Group expects a period of future growth, and our market share has increased in some segments. Within the RoRo/Cruise/Navy segment, the PCTC market is still positive, and we expect the strong market to continue. Multipurpose/General Cargo has shown a positive development, which we expect to continue, particularly in the Chinese market. Market expectations for the Container/Bulk/Tank segment in the Chinese market are generally positive, but influenced by the challenging market for bulk vessels, and the stronger competition in South Korea. For Services, a stable market is expected going forward. The Offshore market is expected to remain tough into 2016.
During 2014 TTS Group has implemented initiatives to adjust capacity towards a shifted demand and to improve internal processes, and focus on the overall value chain. Market initiatives are taken to provide ship-type solutions to key customers. The effects of the actions taken are expected to contribute positively in the quarters to come.
TTS Group works actively to grow its product portfolio and service offering. Sales of larger bundled equipment packages and solutions will improve efficiency for both shipvards and ship owners. The company has therefore organized its business units based on ship-type, with the aim to offer complete equipment packages for ship types to increase the order value per ship, and increase TTS' market position, both in China and internationally.
In order to position the TTS Group for this growth, the Board of Directors of TTS Group continues the strategic process initiated in February to explore opportunities for both acquisitions and partnerships.
TTS Group ASA Q1.2015 / 31.03.2015
| Consolidated statement of comprehensive income / Konsolidert oppstilling av totalresultat | |||||
|---|---|---|---|---|---|
| NOK 1 000 | Unaudited/ Urevidert |
Unaudited/ Urevidert |
Unaudited/ Urevident |
Unaudited/ Urevidert* |
Audited/ Revidert |
| PROFIT AND LOSS ACCOUNT/ RESULTAT | YTD 31.03.2015 | YTD 31.03.2014 | 1 th quarter 2015 | 1 th quarter 2014 | YTD 31.12.2014 |
| Income from projects/ Driftsinntekter | 593 357 | 553 742 | 593 357 | 553 742 | 2 453 658 |
| Other operating income/ Andre driftsinntekter | |||||
| Total operating income/ Sum driftsinntekter | 593 357 | 553 742 | 593 357 | 553 742 | 2 453 658 |
| Raw materials and consumables used/ Varekostnad | 360 187 | 300 255 | 360 187 | 300 255 | 1419801 |
| Other operating costs/ Andre driftskostnader | 240 957 | 285 448 | 240 957 | 285 448 | 942 968 |
| Result from JV ( - is income)/ Resultat fra JV ( - er inntekt) | $-8382$ | $-3580$ | $-8382$ | $-3580$ | $-14325$ |
| EBITDA Driftsresultat før avskrivninger | 595 | $-28381$ | 595 | $-28.381$ | 105 215 |
| Depreciation/ Avskrivninger | 8582 | 9735 | 8582 | 9 7 3 5 | 43 766 |
| Other depreciation/write-downs/ Andre avskrivninger/nedskrivninger | |||||
| Operating profit/ Driftsresultat | $-7987$ | $-38116$ | $-7987$ | $-38116$ | 61 449 |
| Financial income/ Finansinntekter | 12 29 6 | 21 0 20 | 12 29 6 | 21 0 20 | 98 173 |
| Financial expense/ Finanskostnader | 27 671 | 29 816 | 27 671 | 29 816 | 136 361 |
| Net finance/ Netto finans | $-15376$ | $-8797$ | $-15376$ | $-8797$ | $-38188$ |
| Profit/loss before tax/ Resultat før skattekostnader | $-233363$ | $-46913$ | $-233363$ | $-46913$ | 23 261 |
| Taxl Skattekostnad | 4518 | 128 | 4518 | 128 | 45 079 |
| Net result continued business/ Periodens resultat videreført virksomhet | $-2780$ | $-47040$ | $-27880$ | $-47040$ | $-21819$ |
| Net result divested business/ Resultat fra avhendet virksomhet | 0 | $\theta$ | 39 562 | ||
| Net result/ Netto resultat | $-27880$ | $-47040$ | $-27880$ | $-47040$ | 17743 |
| NET RESULT FOR THE YEARI Oppstilling av totalresultatet | |||||
| Net result for the period/ Periodens resultat | $-27880$ | $-47040$ | $-27880$ | $-47040$ | 17 743 |
| Actuarial gain/loss on defined pension benefit plan/ Estimatavvik pensjoner | $-30700$ | ||||
| Translation differences/ Omregningsdifferanser | 721 | $-16833$ | 721 | $-16873$ | 55 289 |
| Comprehensive income/ Totalresultat | $-27159$ | $-63914$ | $-27159$ | $-63914$ | 42 332 |
| Earnings per share (NOK) continued business/ | |||||
| Fortjeneste pr. aksje (NOK) videreført virksomhet | $-0,32$ | $-0.54$ | $-0.32$ | $-0,54$ | $-0,25$ |
| Diluted earnings per share (NOK) continued business/ Utvannet fortjeneste pr. aksje (NOK) videreført virksomhet |
$-0.32$ | $-0.54$ | $-0.32$ | $-0.54$ | |
| Earnings per share (NOK) divested business/ | $-0.25$ | ||||
| Fortjeneste pr. aksje (NOK) avhendet virksomhet | 0.46 | ||||
| Diluted earnings per share (NOK) divested business/ | |||||
| Utvannet fortjeneste pr. aksje (NOK) avhendet virksomhet | 0,46 | ||||
| Earnings per share (NOK)/ Fortjeneste pr. aksje (NOK) | $-0,32$ | $-0,54$ | $-0,32$ | $-0,54$ | 0,21 |
| Diluted earnings per share (NOK)/ Utvannet fortjeneste pr. aksje (NOK) | $-0.32$ | $-0.54$ | $-0,32$ | $-0,54$ | 0.21 |
| Average number of shares used as calculation basis for diluted EPS (000)/ Gjennomsnittlig antall utestående aksjer som basis for utvannet EPS (000) |
86 493 | 86 46 1 | 86 493 | 86 461 | 86 443 |
| Condensed consolidated statement of financial position / | Unaudited/ | Unaudited/ | Audited/ |
|---|---|---|---|
| Konsolidert oppstilling av finansiell stilling | Urevidert | Urevidert | Revidert |
| NOK 1 000 | 31.03.2015 | 31.03.2014 | 31.12.2014 |
| Intangible assets/ Immaterielle eiendeler | 640 430 | 662 616 | 663 535 |
| Tangible assets/ Varige driftsmidler | 159 207 | 135 953 | 160 897 |
| Financial assets/ Finansielle anleggsmidler | 117 276 | 104 103 | 102 582 |
| Assets available for sale/ Eiendeler tilgiengelig for salg | $\mathbf 0$ | 28 686 | $\Omega$ |
| Sum anleggsmidler/ Total non-current assets | 916 913 | 931 358 | 927 014 |
| Inventories/ Varer | 229 660 | 186 604 | 189 264 |
| Total receivables/ Kortsiktige fordringer | 1 360 291 | 857 682 | 1 164 597 |
| Bank deposits/cash/ Bankinnskudd/kontanter | 51 688 | 116 852 | 130 602 |
| Total current assets/ Sum omløpsmidler | 1641639 | 1 161 137 | 1 484 463 |
| Total assets/ Sum eiendeler | 2 558 553 | 2 092 495 | 2 411 477 |
| Share capital/ Aksjekapital | 9530 | 9526 | 9530 |
| Other equity/ Annen egenkapital | 573 975 | 493 531 | 600 832 |
| Total equity/ Sum egenkapital | 583 505 | 503 055 | 610 362 |
| Provisions/ Avsetning for forpliktelser | 29 4 4 4 | 100 617 | 31 740 |
| Long term interest bearing debt/ Langsiktig rentebærende gjeld | 90 081 | 185 810 | 88 143 |
| Long term liabilities/ Langsiktig gjeld | 119 525 | 286 427 | 119 883 |
| Current interest bearing debt/ Kortsiktig rentebærende gjeld | 313 849 | 186 400 | 297 764 |
| Current liabilities/ Kortsiktig gjeld | 1541674 | 1 116 610 | 1 383 468 |
| Total current liabilities / Sum kortsiktig gjeld | 1855 523 | 1 303 010 | 1 681 232 |
| Total liabilities/ Sum gjeld | 1975 048 | 1589437 | 1 801 115 |
| Total equity and liabilities/ Sum egenkapital og gjeld | 2558553 | 2 092 495 | 2 411 477 |
| Condenced consolidated statement of cash flows/ Kontantstrømoppstilling |
Unaudited/ Urevidert |
Unaudited/ Urevidert |
Audited/ Revidert |
|---|---|---|---|
| NOK 1000 | YTD 31.03.2015 | YTD 31.03.2014 | YTD 31.12.2014 |
| EBITDA/ Driftsresultat før avskrivninger | 595 | $-28381$ | 105 215 |
| Change in net current assets/ Endring i netto omløpsmidler | $-74519$ | $-128413$ | $-255220$ |
| Cash from operations/ Kontantstrøm fra operasjonelle aktiviteter | $-73925$ | $-156795$ | $-150005$ |
| Aquisition of non-current assets I Kjap av varige driftsmidler | $-964$ | $-8,199$ | $-46096$ |
| Proceeds discontinued business/ Netto salgs sum avhendet virksomhet | O | ٠ | 39 562 |
| Other investing activities/ Andre investeringsaktiviteter | -0 | 1 1 8 7 | 33 604 |
| Cash from investments/ Kontantstrøm fra investeringsaktiviteter | $-964$ | $-7012$ | 27 070 |
| New loans and repayment/ Opptak og nedhetaling av lån | 6318 | 137 454 | 134 659 |
| Paid-in equity/ Innbetaling av egenkapital | |||
| Payments to shareholders/ Utbetaling til aksjonærer | |||
| Net interest paid/ Netto betalte renter | $-13676$ | $-5668$ | $-327$ |
| Cash from financing/ Kontantstrøm fra finansieringsaktiviteter | $-7358$ | 131 786 | 101 932 |
| Change in cash/ Endring i kontantbeholdning | $-82247$ | $-32021$ | $-21003$ |
| Cash position OB/ Kontantbeholdning IB | 130 602 | 155 570 | 155 570 |
| Effect of exchange rate changes on cash/ Effekt av valutakursendring bank | 3 3 3 3 | $-6698$ | $-3966$ |
| Cash position CB/ Kontantbeholdning UB | 51 688 | 116 852 | 130 603 |
Consolidated statement of changes in equity/ Konsolidert oppstilling av endringer i egenkapital
| NOK 1000 | Aksjekapital | Share capital / Treasury shares/ Egne aksier |
Share premium reserve/ Overkursfond |
Other equity/ Annen egenkapital |
Total | |
|---|---|---|---|---|---|---|
| Equity as of 1.1.2015/ Egenkapital 1.1.2015 | 9526 | $-12$ | 149 378 | 451 469 | 610 362 | |
| Comprehensive income/ Totalresultat | $\sim$ | $-27$ 159 | $-27,159$ | |||
| Sale treasury shares/ Salg egne aksier | ٠ | $\sim$ | ||||
| Options cost/ Opsjonsplaner | 302 | 302 | ||||
| Equity CB/ Egenkapital UB | 9526 | $-12$ | 149 378 | 424 612 | 583 505 |
NOTES TO UNAUDITED INTERIM FINANCIAL STATEMENTS 1TH QUARTER 2015
Note 1 General information
Reporting entity
TTS Group ASA is registered and domiciled in Norway, and the head office is located in Bergen.
The consolidated financial statements cover TTS Group ASA including its subsidiaries. The joint ventures are accounted for using the equity method.
The Board of Directors approved the consolidated financial statements for the vear ended 31st of December 2014 on 15th of April 2015. The annual report 2014 for the TTS Group and for TTS Group ASA, including the consolidated financial statements for the TTS Group, the separate financial statements for TTS Group ASA and the auditors' opinion from KPMG, are available at our website www.ttsgroup.com.
Basis of preparation
TTS Group's financial reports are prepared in accordance with International Financial Reporting Standards (IFRS), as adopted by the European Union.
The unaudited consolidated financial statements for $1th$ quarter 2015 have been prepared in accordance with IAS 34 Interim Financial Statements. The interim accounts do not include all the information required for a full financial statement and should therefore be read in connection with the consolidated financial statements of 2014.
The accounting principles applied is the same as those described in the consolidated financial statements of 2014.
This condensed consolidated 1th quarter interim report of 2015 was approved by the Board on 12th of May 2015.
Judgments, estimates and assumptions
The preparation of the interim report requires the use of judgments, estimates and assumptions that affect the application of accounting principles and the reported amounts of assets and liabilities, income and expenses. Actual future outcome may differ from these estimates.
In preparing these consolidated interim financial statements, the key assessments made by the management in applying the Group's accounting principles and the key sources of estimation uncertainty were the same as those that applied to the consolidated financial statements for the financial year ended 31st of December 2014.
Note 2 Segment information
| Q 4 | Q 3 | Q 2 | Q 1 | Full year | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| Turnover | EBITDA | Turnover | EBITDA | Turnover | EBITDA Turnover | EBITDA | Turnover | EBITDA | |||
| Roro, cruise, navy | 2015 | 160 | 15,1 | 160 | 15.1 | ||||||
| 2014 | 157 | 25.3 | 154 | 21,4 | 154 | 19,4 | 135 | 11,1 | 599 | 77,3 | |
| Container, bulk, tank | 2015 | 72 | 1,9 | 72 | 1,9 | ||||||
| 2014 | 105 | $-7,5$ | 92 | $-0,9$ | 112 | 2,3 | 112 | 1,3 | 422 | $-4,8$ | |
| Offshore | 2015 | 79 | $-23.7$ | 79 | $-23,7$ | ||||||
| 2014 | 210 | 32,5 | 111 | $-26,4$ | 130 | $-30,0$ | 121 | $-26,1$ | 572 | $-50,0$ | |
| Multipurpose General Cargo | 2015 | 94 | $-3,7'$ | 94 | $-3,7'$ | ||||||
| 2014 | 47 | $-1.1$ | 28 | $-6,1$ | 35 | $-11,7$ | 28 | $-13,0$ | 138 | $-32,0$ | |
| Shipyard Solutions | 2015 | 51 | 4,3 | 51 | 4,3 | ||||||
| 2014 | 53 | 27,1 | 59 | 7,1 | 43 | 1,2 | 37 | $-2,9$ | 192 | 32,5 | |
| Services | 2015 | 136 | 13,4 | 136 | 13,4 | ||||||
| 2014 | 162 | 64,0 | 105 | 13,1 | 142 | 12,8 | 120 | 6,5 | 530 | 96,4 | |
| Corporate / Other | 2015 | $-6,7'$ | $-6,7$ | ||||||||
| 2014 | 0 | 1.4 | 0 | $-5,9$ | 0 | $-4,4$ | n | $-5,3$ | $-14,2$ | ||
| Total | 2015 | 593 | 0,6 | 593 | 0,6 | ||||||
| 2014 | 734 | 141,8 | 549 | 2,2 | 617 | $-10,3$ | 554 | $-28,4$ | 2 4 5 3 | 105,2 | |
| 2013 | 638 | $-110.0$ | 565 | $-82,2$ | 758 | 36,8 | 732 | 25,1 | 2693 | $-130.3$ |
Comparative figures of Q4, Q3, Q2, Q1 and 31.12.2013 have been restated to reflect the changed segment reporting.
From 3rd quarter 2014 TTS Group changed its segment reporting.
- RoRo/cruise/navy (RCN)
- Container/bulk/tank (incl. JV-companies) (CBT) $\bullet$
- Offshore $\bullet$
- Multipurpose/General cargo (MPGC)
- Shipvard Solutions $\bullet$
- Services $\overline{\phantom{a}}$
The RCN segment delivers complete cargo handling solutions to RoRo, PCTC, cruise and navy vessel, including terminal loading and passenger systems. Product range includes external and internal ramps, covers and doors, liftable decks, passenger gangways and linkspan systems. The segment has earlier been reporting as part of the Marine Division.
The CBT segment delivers complete cargo handling solutions to the container, tanker and bulk vessels. Product range includes 10-40 t winches, 15-50 t cranes and specialized hatch covers designs. The segment has earlier been reporting as part of the Marine Division.
The Offshore segment delivers support solutions to the offshore based oil industry and the supporting service industry. Product range includes 15-50 t offshore cranes, 40-400 t heave compensated cranes, mooring winches, internal and external covers and doors. The segment has earlier been reporting as part of the Offshore and Heavy Lift division.
The MPGC segment delivers supporting solutions to the vessels which is designed to operate in the multipurpose or general cargo market, requiring specialized operating capabilities. Product range includes 40-900 t heavy lift cranes, side loading systems, hatch covers and mooring winches. The segment has earlier been reporting as part of the Offshore and Heavy Lift division.
The Shipyard Solutions segment includes shiplift and transfer systems, as well as complete production lines to the yard industry. Products range includes shiplift system, ship transfer systems, multiwheelers and translifters.
This segment has earlier been reporting as part of the Marine Division.
The Services segment includes service and after sales for all segments within TTS. This enables TTS to offer service and after sale worldwide for the full range of its products.
Note 3 Share capital and equity
As per 31th of March 2015 TTS Group ASA has issued 86 605 660 shares, each with a face value of NOK 0.11 giving a share capital of total NOK 9 526 623.
TTS Group ASA holds 112 882 own shares.
At the end of Q1/2015 senior management holds 705 000 outstanding share options. There has been no award or redemption of share options in 1st quarter 2015.
Note 4 Earnings per share
Earnings per share (EPS) are based upon the weighted average number of shares outstanding during the period. Diluted EPS includes the effect of the assumed conversion of potentially dilutive instruments.
The components of the numerator for the basic and diluted EPS are as follows:
| Earnings per share Resultat per aksje : | YID | YID | YID. |
|---|---|---|---|
| 31.03.2015 | 31.03.2014 | 31.12.2014 | |
| Net income available to shareholders, continued business/ Resultat lilordnet selskapets aksionærer, videreført | |||
| virksomhet | $-27880$ | $-47040$ | $-21819$ |
| Effect of dilution/ Utvanningseffekt | |||
| Diluted net income available to shareholders, continued business/ Utvannet resultat tilordnet selskapets aksionærer. | |||
| videreført virksomhet | $-27880$ | $-47040$ | $-21819$ |
| Net income available to shareholders, divested business/ Resultat tilordnet selskapets aksionærer, avhendet | |||
| virksomhet | ٠ | ۰ | 39 562 |
| Effect of dilution/ Utvanningseffekt | ۰ | ||
| Diluted net income available to shareholders, divested business/ Resultat tilordnet selskapets aksionærer, avhendet | |||
| virksomhet | 39 562 | ||
| Net income available to shareholders/ Utvannet resultat tilordnet selskapets aksionærer | $-27880$ | $-47040$ | 17 743 |
| Effect of dilution/ Utvanningseffekt | |||
| Diluted net income available to shareholders/ Utvannet resultat tilordnet selskapets aksionærer | $-27880$ | $-47040$ | 17 743 |
The components of the denominator for the calculation of basic and diluted EPS are as follows:
| 31.03.2015 31.03.2014 31.12.2014 | |||
|---|---|---|---|
| Weighted average number of shares outstanding/ Gjennomsnittlig utestående aksjer | 86493 | 86461 | 86 443 |
| Effect of dilution/ Utvanningseffekt | |||
| Diluted numbers of shares/ Utvannet gjennomsnittlig utestående aksjer | 86493 | 86461 | 86 443 |
Accordingly, the basic and diluted EPS for the quarter is as follows:
| 31.03.2015 31.03.2014 31.12.2014 | |||
|---|---|---|---|
| Resultat per aksje | $-0.322$ | $-0.544$ | 0.205 |
| Utvannet resultat per aksje | $-0.322$ | $-0.544$ | 0,205 |
Note 5 Related parties
Note 21 and accounting principles section 2.2 in the consolidated financial statements of 2014 describe the principles related to elimination of transactions between group subsidiaries. Eliminated transactions have no significance for the financial position and profit for the period.
The Group has carried out various transactions with subsidiaries and joint ventures. All the transactions have been carried out as part of the ordinary operations and at arm's length prices.
| Balance sheet items to/from Joint Ventures/ Balanseposter til/fra felleskontrollert virksomhet | 31.03.2015 | 31.03.2014 |
|---|---|---|
| Current receivables/ Kortsiktige fordringer | 33 553 | 24 860 |
| Current liabilities/ Kortsiktig gjeld | $-7945$ | $-1952$ |
| Net receivables $(+)$ / liabilities $(-)$ to/from Joint Ventures/ Netto fordringer $(+)$ / gield $(-)$ | 25 608 | 22 907 |
Note 6 Tax
TTS Group is taxable in more than one jurisdiction based on its operations. A loss in one jurisdiction may not be offset against taxable income in another jurisdiction.
Thus, the Group may pay tax within some jurisdictions even though it might have an overall loss or have tax losses exceeding taxable profit at the consolidated level. Based on challenging markets in the offshore market, deferred tax asset in the Norwegian companies has been impaired by MNOK 20 in the 4th quarter. The change is presented as tax. Remaining tax cost is in general related to payable taxes in different jurisdictions.
Deferred tax
Deferred income tax reflects the impact of temporary differences between the amount of assets and liabilities recognized for financial purposes and such amounts recognized for tax purposes. The net recognized deferred tax consists of the following:
| 31.03.2015 | 31.03.2014 | |
|---|---|---|
| Gross deferred tax asset 1 / Brutto utsatt skattefordel 1) | 32 518 | 61 156 |
| Gross deferred tax liability1)/ Brutto utsatt skatteforpliktelse1) | $-28938$ | $-29958$ |
| Net deferred tax asset $(+)$ / liability $(-)$ / Netto utsatt skattefordel $(+)$ /-forpliktelse $(-)$ | 3580 | 31 198 |
$\beta$ Gross deferred tax asset is recognized as intangible assets and gross deferred tax liability is recognized as provisions
1) Brutto utsatt skattefordel er innregnet som immateriell eiendel og brutto utsatt skatteforpliktelse er innregnet som avsetning for forpliktelser
Recognized deferred tax asset primarily relates to tax losses in the Norwegian companies. The criteria that have been utilized to estimate that future taxable profit can be utilized against deferred tax losses are:
- . The Group will have taxable profits before unused tax losses expire
- The Group has sufficient temporary differences
- . Tax losses result from particular identifiable causes
Based on changed market outlook in the Offshore segment, deferred tax asset companies was impaired by MNOK 20 as per 31.12.2014. Deferred tax asset in Norwegian companies that is not recognized in the balance sheet is close to MNOK 155.
Note 7 Goodwill and other intangible assets
TTS Group tests the value of goodwill and other intangible assets annually or at the end of each reporting period if any indication that the assets may be impaired.
TTS shares are freely traded at Oslo Stock Exchange. Closing price of last trading date in March 2015 was NOK 5,00 per share, indicating a nominal trade value of TTS of MNOK 433. Book value of the equity at 31.03.2015 was MNOK 583.5.
For the subsidiary NMF, which was acquired in the 3rd quarter of 2012, the results are weaker than expected. TTS Group expects improved results, and has concluded that the value in use is higher than the book value. The future market development could have a material impact in the impairment test.
TTS Group considers that there are no major events, major changes in assumptions or other new information indicating a changed assessment of goodwill and other intangible assets from year-end 2014. At 31th of March 2015 TTS Group has evaluated, however found no basis for impairment of goodwill or other intangible assets. Future market development could have a material impact in the impairment test.
Overview of goodwill and other intangible assets are as follows:
| Goodwill | Other intangible assets / Andre immaterielle eiendeler |
|||
|---|---|---|---|---|
| 31.03.2015 | 31.12.2014 | 31.03.2015 | 31.12.2014 | |
| Net book value, beginning of period/ Bokført verdi, periodestart | 564 464 | 538 119 | 67918 | 77 693 |
| Acquisition/ Oppkjøp | ٠ | $\blacksquare$ | ||
| Divestment/ Avhendelse | ۰ | |||
| Additions/ Tilgang i året | $-94$ | $-419$ | ||
| Depreciations/Amortizations/ Avskrivninger | $-3440$ | $-12$ 179 | ||
| Impairment/ Nedskrivninger | ||||
| Foreign currency differences/ Omregningsdifferanser | $-19961$ | 26 345 | $-974$ | 2822 |
| Net book value, end of period/ Bokført verdi, periodeslutt | 544 503 | 564 464 | 63 409 | 67918 |
Note 8 Non-current assets
| Non-current assets/ anleggsmidler | ||
|---|---|---|
| 31.03.2015 | 31.12.2014 | |
| Net book value, beginning of period/ Bokført verdi, periodestart | 160 897 | 136 049 |
| Acquisition/ Oppkjøp | ||
| Divestment/ Avhendelse | $-500$ | |
| Additions/Tilgang i året | 1 059 | 47 015 |
| Depreciations/Amortizations/ Avskrivninger | $-4496$ | $-31782$ |
| Impairment/ Nedskrivninger | $\sim$ | $\mathbf{m}$ |
| Foreign currency differences/ Omregningsdifferanser | 1747 | 10 115 |
| Net book value, end of period/ Bokført verdi, periodeslutt | 159 207 | 160 897 |
Note 9 Investments in Joint Ventures
| 31.03.2015 | 31.12.2014 |
|---|---|
| 102 582 | 104 002 |
| $\overline{a}$ | |
| 8 3 8 2 | 14 325 |
| $-5796$ | |
| 6 3 1 2 | $-9949$ |
| 117 276 | 102 582 |
Note 10 Inventories
| 31.03.2015 | 31.12.2014 |
|---|---|
| 266 343 | 225 947 |
| $-366683$ | $-36663$ |
| 229 660 | 189 264 |
Note 11 Financial assets measured at fair value
The Group has one financial asset measured at fair value in accordance with IFRS 13.
| 31.03.2015 | 31.12.2014 | |||
|---|---|---|---|---|
| Ownership/ | Fair value/ | Ownership/ | Fair value/ | |
| Sigma Drilling AS | Eierandel | Virk elig verdi | Eierandel | Virk elig verdi |
| 16,1% | 16.1% |
TTS is familiar with ongoing negotiations between Sigma Drilling and STX on final settlement related to the cancellation of the contract, which may give basis for a positive outcome for the owners of Sigma Drilling. At the end of Q1/2015 negotiations are still ongoing.
Note 12 Net result divested operations
In March 2015 TTS Group finalized the discussions with Cameron related to final release of hold back amount from Cameron related to the sale of the Energy-division in 2012. The release has no material effects on the Q1/2015.
Note 13 Financial risk management
The Group's objectives and principles of financial risk management are consistent with what stated in the consolidated financial statements for the fiscal year 2014.
There has been no execution related to the subordinated bond facility during the $1th$ quarter of 2015. The nominal amount and conversion price of the convertible bond loan is unchanged from 4th quarter 2014 and is MNOK 95.3, giving right to 19 184 104 shares upon conversion.
The overdraft facility of MNOK 300 with Nordea has been unchanged during $1th$ quarter of 2015. Guarantee facility of MNOK 500 with Nordea have been increased to MNOK 550 during the quarter. Loan facility of MNOK 100, with DNB is unchanged during the 1th quarter. Guarantee facility with DnB of MNOK 140 has been unchanged during the quarter.
At the end of 1th quarter 2015 TTS-group has drawn MNOK 100 of total MNOK 100 of the 3 year term loan facility in the bank agreement established in December 2012, ref Note 12 in the 2014 annual report. In addition the group has drawn MNOK 137 of the total MNOK 300 overdraft facility.
Covenants for both equity ratio and 12 months rolling EBITDA related to the debt facilities with Nordea and DNB were renegotiated in the 4th quarter 2014. The equity covenant requires an equity-portion of 20,0 % at all times. Nominal value of remaining bond-debt is to be included in the basis for the calculation.
Rolling 12 months NIBD/EBITDA covenant has been waived until 4Q2015. In the period Q4-2014 until 3Q-2015 a new EBITDA covenant is applied.
| (MNOK) | $34 - 14$ | 71.1E ۱-۱۵ |
Q2-15 | Q3-15 |
|---|---|---|---|---|
| EBITDA covenant accumulated | $\sim$ ັບ |
24 $\cdot$ |
≥ 53 | $\geq 80$ |
The debt and bonding facilities with Nordea and DNB mature in the $4th$ quarter 2015. The Group's bank loans of MNOK 100 have consequently been classified as short term debt in the reported balance at 31 March.
Additional information regarding financial risk management is available in the annual report 2014.
Note 14 Subsequent events
On the 14th of April 2015 TTS SCM Marine and Offshore machinery Co Ltd., Guangzhou China, a 50/50 owned company controlled by TTS Group ASA, entered into a strategically important contract for delivery of marine equipment packages, consisting of heavy lift cranes, hatch covers and winches to six new multipurpose heavy lift vessels. The package equipment approach brings the total order value up to approx. 270 MNOK for the six vessels. First delivery to start in May 2016.
On the 15th of April 2015 the Offshore Business Unit, entered into three new agreements for delivery of offshore and deck cranes with a total order value of approx. 105 MNOK. Deliveries to take place in 2016.
Additional information on subsequent events is available at www.newsweb.no - ticker TTS