Post on 15-Mar-2022
Important information
Nothing herein shall create any implication that there has been no change in the affairs of American Shipping Company ASA ("AMSC" or the "Company") as of the date of this Company Presentation. This Company Presentation contains forward-looking statements relating to the Company's business, the Company's prospects, potential future performance and demand for the Company's assets, the Jones Act tanker market and other forward-looking statements. Forward-looking statements concern future circumstances and results and other statements that are not historical facts, sometimes identified by the words "believes", "expects", "predicts", "intends", "projects", "plans", "estimates", "aims", "foresees", "anticipates", "targets", and similar expressions. The forward-looking statements contained in this Company Presentation, including assumptions, opinions and views of the Company or cited from third party sources, are solely opinions and forecasts which are subject to risks, uncertainties and other factors that may cause actual events to differ materially from any anticipated development.
Second Quarter 2019 Highlights
* Net profit after tax, adjusted for non-recurring items, currency fluctuations, mark-to-market of derivatives and changes to deferred tax ** Includes DPO, reported EBITDA for Q2 19 is USD 21.0 million
3
Adjusted net profit of USD 2.5 million*
Normalized EBITDA** of USD 21.9 million
• No profit share
• DPO of USD 0.9 million
Declared Q2 dividend of USD 0.08 per share, consistent with prior guidance
• Ex-dividend date of 30 August 2019 with payment on or about 10th
September 2019
• Classified as a return of paid in capital
Stable market conditions for Jones Act tankers
Normalized EBITDA* (USD millions) Normalized EBITDA* per quarter (USD millions)
4
• Normalized EBITDA* of USD 21.9 million in Q2 19 (USD 21.5 million in Q2 18)• No profit share in Q2 19 or Q2 18• DPO of USD 0.9 in Q2 19 (USD 0.9 million in Q2 18)
* Including Profit Share (except 2018 and 2017 where profit share was 0 for the full year) and DPO. Reported EBITDA for Q2 19 is USD 21.0 million
85 85 85 84
3 4 411 10
0102030405060708090
100
2016 20182015 2017
4
Profit Share DPO Reported EBITDA
21 21 21 21 21 21 21 21 21 21
02468
1012141618202224
11
Q2 17Q1 17
1 11
Q3 17 Q4 17
1
Q1 18
1
Q2 18
1
Q3 18 Q4 18 Q1 19
1
Q2 19
1
Profit Share DPO Reported EBITDA
Stable, Predictable EBITDA
Long-term fixed rate bareboat charters to OSG secures cash flow
Fleet Deployment Overview
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Firm Charter Options
Houston
Long Beach
Los Angeles
New York
Texas City
Boston
Nikiski
Martinez
Tampa
Anacortes
Vessel End users
• AMSC’s fleet is on firm BB Charters to OSG with evergreen extension options
• AMSC receives fixed annual bareboat revenue of USD 88 million + ~50% of the profits generated by OSG under the time charter contracts
• OSG time charters the vessels to oil majors for U.S domestic trade
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BBC Options
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OptionsBBC exp. 2025
A Critical Part of Oil Majors’ Transportation Logistics
6
Jones Act Tanker Routes:
Gulf Coast refineries to Florida and East Coast (Clean)
Alaska and Intra-west coast movements (Clean/Dirty)
Cross-Gulf movements (Dirty)
4
BAKKEN
EAGLE FORD
PERMIAN
Patoka, IL
US GULF
Key US Oilfields
Clean Pipeline
Barges
Crude Pipeline
5
3
2
1
1 6
Primary trade routes for Jones Act crude oil and products
Pipeline project Start Incremental capacity
Total capacity
Current capacity 2.80
Local refining 0.50 3.30
Sunrise Q2 ’19 0.12 3.51
Cactus 2 Q4 ’19 0.67 4.18
Gray Oak Q1 ’20 0.70 4.88
EPIC Q2 ’20 0.40 5.28
Enterprise NGL Q2 ’20 0.10 5.38
Permian to Gulfcoast Q3 ’20 0.60 5.98
ExxonMobil Q4 ’20 1.00 6.98
Source: Navigistics’ Wilson Gillette Report May 2019
The Permian Pipeline Crunch
2
3
Delaware Bay Lightening (Dirty)
Shuttle tankers from deep water U.S. Gulf to Gulf Coast Refineries (Dirty)
Gulf Coast crude to Northeast refineries (Dirty)
4
5
6
1
Permian Pipeline Capacity – New Projects and Production Growth, MBDs
Permian production growth has surpassed pipeline
takeaway capacity –additional volumes to drive
tanker demand
Jones Act tanker fleet deployment by main trades (Tankers and ATBs)
7Source: Navigistics’ Wilson Gillette Report Dec 2019 and AMSC analysisNote: 1) Idle capacity refers only to old ATBs
Majority of Fleet Carry Clean Products
8%
17%
36%
36%
Chemicals3%
MSC
0%
Idle1)Clean USG
Crude Oil
West Coast
8%
17%
22%
47%
Crude Oil
Chemicals
MSC
3%
Idle1)
3%
West Coast
Clean USG
2015Total capacity: ~20 mbbls
Significant upside potential for Jones Act deployment in Crude Oil
May 2019Total capacity: ~23.7 mbbls
Rising seaborn transport from Gulf to East Coast Gulf Coast to Florida Trade Lane
Increasing Volumes Into Florida
8Sources: EIA
1
PADD 1
PADD 3
PADD 2
Jacksonville
Port Everglades
Tampa
Corpus Christi
HoustonBeaumont
New Orleans
Pascagoula
Mbbls per month
10
15
20
25
30
Jan‐20
10
Jun‐20
10
Nov‐201
0
Apr‐20
11
Sep‐20
11
Feb‐20
12
Jul‐2
012
Dec‐20
12
May‐201
3
Oct‐201
3
Mar‐201
4
Aug‐20
14
Jan‐20
15
Jun‐20
15
Nov‐201
5
Apr‐20
16
Sep‐20
16
Feb‐20
17
Jul‐2
017
Dec‐20
17
May‐201
8
Oct‐201
8
Mar‐201
9
Aug‐20
19
PADD 1 Receipts of Products by Tanker and Barge from PADD 3
PADD 3 to PADD 1 Crude Oil Moves by Tanker and Barge
Trade lane carrying Crude from Gulf Coast to U.S. Northeast
9Source: EIA, Marine Traffic and AMSC analysis
PADD 1
6
PADD 3
PADD 2
Jacksonville
Port Everglades
Tampa
Corpus Christi
HoustonBeaumont
New Orleans
Pascagoula
Washington
New YorkPhiladelphia
Boston
Crude Returning to Peak Levels on East Coast
East Coast volumes back to ~6 tankers, up from ~1 tanker during 2017
Volumes driven by spread in pricing of U.S. oil vs international alternatives
0
1
2
3
4
Mbb
l
PADD 3 to PADD 1 Movements of Crude by Tanker (3M Rolling Ave)
PADD 3 to PADD 1 Crude Oil Moves by Number of Tanker Liftings
Crude Oil Price Spread - WTI Houston vs. Bonny Light
10Source: Argus and Marine Traffic
11 voyages in Jan 2018, Delta refinery completed maintenance in Oct/Nov
On average 8 MR voyages per month of crude to U.S. Northeast refineries
Crude loaded in Houston vs. West Africa needs to be minimum $1.50 cheaper to be competitive for purchase by U.S. Northeast Refiners
Spread has been sufficiently wide since Aug/Sept 2017
Oil Price Spread - Key Driver for Increased Crude Shipping Volumes
0
2
4
6
8
10
12
14
Aug‐17
Sep‐17
Oct‐17
Nov‐17
Dec‐17
Jan‐18
Feb‐18
Mar‐18
Apr‐18
May‐18
Jun‐18
Jul‐1
8Au
g‐18
Sep‐18
Oct‐18
Nov‐18
Dec‐18
Jan‐19
Feb‐19
Mar‐19
Apr‐19
May‐19
Jun‐19
Jul‐1
9
‐1.00
0.00
1.00
2.00
3.00
4.00
5.00
6.00
7.00
Jan2017
Mar2017
May2017
Jul2017
Sep2017
Nov2017
Jan2018
Mar2018
May2018
Jul2018
Sep2018
Nov2018
Jan2019
Mar2019
May2019
Jul2019
Fleet profile by vessel age Considerable fleet growth over the last 3 years, but scrapping likely to bring fleet back to 2015 levels
0
1
2
3
4
5
6
7
8
9
10
11
12
50 30 152045 40 35 25 10 5
AMSCTankersScrap/lay up
ATBs
11Source: Navigistics’ Wilson Gillette Report May 2019, broker reports and AMSC analysis
Fleet Reduction as Scrapping Continues
Number of vessels
Candidates for scrapping
Kbbls capacity
0
5000
10000
15000
20000
25000
30000
2012 2013 2014 2015 2016 2017 2018 2019 2020 2021Fleet Scrapping
Actual Projected
2015 levels
*Applicable to common stockholders of the parent company
Figures in USD million (except share and per share information) Q2 2019 Q2 2018
Operating revenues 21.9 21.9
Operating expenses (0.9) (1.3)
Operating profit before depreciation - EBITDA 21.0 20.6
Depreciation (8.4) (8.4)
Operating profit - EBIT 12.6 12.2
Gain on investments - -
Net interest expense (10.0) (10.4)
Unrealized gain/(loss) on interest swaps (2.2) 0.5
Net foreign exchange gain/(loss) - -
Profit/(loss) before income tax 0.4 2.3
Income tax expense (0.1) (0.2)
Non-cash income tax benefit/(expense) 0.4 (0.1)
Net profit / (loss) for the period * 0.7 2.0
Average number of common shares 60,616,505 60,616,505
Earnings/(loss) per share (USD) 0.01 0.03
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Income Statement (unaudited)
Figures in USD millions 30.06.2019 30.06.2018
Vessels 695.0 728.8Interest-bearing long term receivables (DPO) 25.8 27.7Other non current assets - 16.4Derivative financial assets - 4.0Trade and other receivables 0.2 0.2Cash held for specified uses 4.0 2.8Cash and cash equivalents 53.2 51.3TOTAL ASSETS 778.2 831.2
Total equity 167.9 183.0Deferred tax liabilities 12.5 12.2Interest-bearing long term debt 543.4 587.2Derivative financial liabilities 1.0 -Interest-bearing short term debt 37.7 28.3Deferred revenues and other payables 15.5 20.5TOTAL EQUITY AND LIABILITIES 778.2 831.2
13
Balance Sheet (unaudited)
CASH DEVELOPMENT IN 2Q 19 (USD millions)
14
52.1
21.0
4.4
7.6
4.8 0.9 57.2
AmortizationInterestOB Cash EBITDA OtherDividends CB Cash
Cash position increased during the quarter
15
Highlights
Investment HighlightsComments
INCREASING DEMAND IN KEY TRADES
Stable crude shipments from U.S. Gulf to the U.S. Northeast
Growing clean trade into Florida
Jones Act time charter rates approaching USD 60,000 per day
REDUCING FLEET CAPACITY
Scrapping of older tonnage continues with 2 MRs and 5 ATBs retired in 2018 and two additional ATBs to date in 2019
10 tankers and ATBs approaching 35 years or older in 2020; with Special Surveys coming up
Slim orderbook with only two barges for delivery in 2020
LEADING MARKET POSITION WITH STABLE CASH FLOWS
Bareboat contracts provide stable cash flows with profit share upside potential
Existing modern fleet that is integral to OSG’s business
Well positioned to take advantage of growth opportunities in a strengthening market
FLEET WELL POSITIONED TO BENEFIT FROM MARKET
UPSIDE
OSG is to redeploy nine AMSC owned vessels on new time charters during 2019 and early 2020
The fleet is well positioned to capitalise on increased time charter rates through the profit split