Post on 25-Dec-2021
Presentation of Q3 201920 November 2019
American Shipping Company ASA
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.
Third 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 Q3 19 is USD 21.5 million
3
Adjusted net profit of USD 3.0 million*
Normalized EBITDA** of USD 22.4 million
• No profit share
• DPO of USD 0.9 million
Declared Q3 dividend of USD 0.08 per share, consistent with prior guidance
• Ex-dividend date of 26 November 2019 with payment on or about 5th
December 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 22.4 million in Q3 19 (USD 22.2 million in Q3 18)• No profit share in Q3 19 or Q3 18• DPO of USD 0.9 in Q3 19 (USD 0.9 million in Q3 18)
* Including Profit Share (except 2018 and 2017 where profit share was 0 for the full year) and DPO. Reported EBITDA for Q3 19 is USD 21.5 million
85 85 85 84
3 4 411 10
0102030405060708090
100
4
20172015 2016 2018
Profit Share Reported EBITDADPO
21 21 21 21 21 21 21 21 21 22
02468
1012141618202224
1
Q4 17
1 1
Q2 17 Q3 17
1
Q3 18Q1 18 Q1 19
11
Q4 18Q2 18
1 1 1
Q2 19 Q3 19
1
Reported EBITDAProfit Share DPO
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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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
Local refining & existing pipelines 4.18
Cactus 2 - Initial Q3 ’19 0.37 4.55
EPIC - Initial Q3 ’19 0.30 4.85
Gray Oak Q4 ’19 0.90 5.75
EPIC - Final Q1 ’20 0.30 6.05
Cactus 2 - Final Q2 ’20 0.33 6.38
Wink-to-Webster Q3 ’21 1.00 7.38
Wink-to-Webster Q1 ’22 0.50 7.88
Source: Navigistics’ Wilson Gillette Report Sept 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 pipelines to drive
tanker demand
Jones Act tanker fleet deployment by main trades (Tankers and ATBs)
7Source: Navigistics’ Wilson Gillette Report Sept 2019 and AMSC analysisNote: 1) Idle capacity refers only to old ATBs
Majority of Fleet Carry Clean Products
8%
17%
36%
36%
ChemicalsIdle1)
3%
MSC
West Coast
0%
Crude Oil
Clean USG
8%
17%
22%
48%
Chemicals3%
MSCIdle1)
Crude Oil
2%
West Coast
Clean USG
2015Total capacity: ~20 mbbls
Sept 2019Total capacity: ~23.5 mbbls
Rising seaborn transport from Gulf to East Coast Gulf Coast to Florida Trade Lane
Increasing Clean 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
12.5
17.5
22.5
27.5
Mbb
l
PADD 1 Receipts of Products by Tanker and Barge from PADD 3 Trendline 5% CAGR
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 Trade to East Coast stabilizing
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
On average 7 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 forCrude 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
9Au
g‐19
Sep‐19
Oct‐19
‐1.00
0.00
1.00
2.00
3.00
4.00
5.00
6.00
7.00
Fleet profile by vessel age Considerable fleet growth in past 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 Sep 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) Q3 2019 Q3 2018
Operating revenues 22.1 22.1
Operating expenses (0.6) (0.8)
Operating profit before depreciation - EBITDA 21.5 21.3
Depreciation (8.5) (8.5)
Operating profit - EBIT 13.0 12.8
Gain on investments - -
Net interest expense (10.0) (10.4)
Unrealized gain/(loss) on interest swaps 0.1 0.1
Net foreign exchange gain/(loss) - -
Profit/(loss) before income tax 3.1 2.5
Income tax expense - (0.2)
Non-cash income tax benefit/(expense) (0.2) 0.1
Net profit / (loss) for the period * 2.9 2.4
Average number of common shares 60,616,505 60,616,505
Earnings/(loss) per share (USD) 0.05 0.04
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Income Statement (unaudited)
Figures in USD millions 30.09.2019 30.09.2018
Vessels 686.5 720.3Interest-bearing long term receivables (DPO) 25.3 27.2Other non current assets - 16.4Derivative financial assets - 4.2Trade and other receivables 0.1 0.1Cash held for specified uses 2.4 2.1Cash and cash equivalents 50.5 47.3TOTAL ASSETS 764.8 817.7
Total equity 166.0 180.6Deferred tax liabilities 12.7 12.3Interest-bearing long term debt 533.2 580.7Derivative financial liabilities 0.9 -Interest-bearing short term debt 41.6 28.3Deferred revenues and other payables 10.4 15.8TOTAL EQUITY AND LIABILITIES 764.8 817.7
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Balance Sheet (unaudited)
CASH DEVELOPMENT IN 3Q 19 (USD millions)
14
57.252.9
21.514.4
7.1
4.8 0.5
OtherEBITDAOB Cash Interest Amortization Dividends CB Cash
Cash position decreased during the quarter
15
Highlights
Investment Highlights
Comments
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
AMSC owned vessels already committed on new time charters for most of 2020
The fleet is well positioned to capitalise on increased time charter rates through the profit split