First Quarter 2015 Results · New tank farm at the Tianjin Terminal in China The first customer...

First Quarter 2015 Results6 May 2015

2

Agenda

• Highlights

• Financials

• Operational review

• Project Felix

• Market update and prospects

3

Highlights

• Chemical Tankers EBITDA was USD 26 million, which adjusted for non-recurring

items was USD 4 million higher than last quarter. EBITDA includes negative effects

from bunker derivatives of USD 15 million.

• Odfjell chemical freight index (ODFIX) and time charter result down 3% compared

with the previous quarter.

Highlights

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ODFIX

¹ Proportional consolidation method according to actual historical ownership share

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350

06 07 08 09 10 11 12 13 14 15

USD

mill

Annulised EBITDA¹

Chemical tankers Tank terminals LPG/Ethylene

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Highlights

• The cost-cutting and efficiency programme is progressing as planned.

• Strengthened results from Odfjell Terminals, EBITDA of USD 9 million compared

with USD 2 million in fourth quarter.

• Appointment of new President/CEO, Mr Kristian V. Mørch starting latest

1 November, 2015.

Highlights

5hallo

Income statement¹ - First quarter 2015

Financials

¹ Proportional consolidation method

USD mill 1Q15 4Q14Gross revenue 260 276

Voyage expenses (106) (118)

TC expenses (40) (42)

Operating expenses (53) (58)

General and administrative expenses (26) (32)

Operating result before depr. (EBITDA) 35 34

Depreciation (30) (29)

Operating result (EBIT) 5 5

Net finance (37) (26)

Taxes (0) 4

Net result (32) (17)

6

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Quarterly figures¹USD mill

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2013 2014 2015

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Gross Revenue

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25

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35

40

2013 2014 2015

USD

mill

EBITDA

• Slightly reduction in revenue.

• EBITDA improvement continues ,USD 35 million in first quarter compared to USD 34 million last

quarter.

• Slightly reduction in revenue.

• EBITDA improvement continues ,USD 35 million in first quarter compared to USD 34 million last

quarter.

Financials


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Quarterly figuresUSD mill

‐6‐15

58

‐15

23

5

‐99

5

-120

-100

-80

-60

-40

-20

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20

40

2013 2014 2015

US

D m

ill

Operating Result (EBIT)¹

• EBIT 4Q14 includes reversal of impairment of USD

5 million .

• Unrealized negative value on derivatives

USD 21.2 million posted other financial items .

• Stable interest.

• EBIT 4Q14 includes reversal of impairment of USD

5 million .

• Unrealized negative value on derivatives

USD 21.2 million posted other financial items .

• Stable interest.

‐9 ‐7 ‐7 ‐9 ‐9 ‐9 ‐9 ‐11 ‐10

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‐1

‐15‐6

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‐5

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‐10

‐20

-30

-25

-20

-15

-10

-5

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10

USD

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Net Finance²

Net interest Other financial/currency2013 2014 2015

Financials

¹ Proportional consolidation method² Equity method

haallooooooooooooo

‐13‐22

‐32

‐2

‐26

9

‐9

‐102

‐17

-110

-90

-70

-50

-30

-10

10

30

2013 2014 2015

US

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Net Result

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Results per segment¹

1Q15 4Q14

USD millChemical tankers

Tank terminals

LPG/Ethylene

Chemical tankers

Tank terminals

LPG/Ethylene

Gross revenue 229 27 4 247 24 4EBITDA 26 9 1 30 2 1EBIT 4 1 1 5 (1) 1

0%10%20%30%40%50%60%70%80%90%

100%

Gross revenue EBITDA Assets

1Q15


Financials


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USD

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Annualised EBITDA¹


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Income statement¹ – 1Q15 chemical tankersUSD mill 1Q15 4Q14

Gross revenue 229 247

Voyage expenses (104) (117)

TC expenses (38) (41)


General and administrative expenses 2 (22) (18)



Impairment - (4)

Operating result (EBIT) 4 5

Financials

• Bunker adjustment clauses impacted the gross revenue negatively with USD 10 million in 1Q15

(USD 2.7 million in 4Q14) , EBITDA also includes negative effects from bunker derivatives of

USD 15 million (USD 16.6 million in 4Q14).

• EBITDA includes provisions of USD 2 million for redundancy packages vs. a gain of USD 6

million in 4Q14.

• Bunker adjustment clauses impacted the gross revenue negatively with USD 10 million in 1Q15

(USD 2.7 million in 4Q14) , EBITDA also includes negative effects from bunker derivatives of

USD 15 million (USD 16.6 million in 4Q14).

• EBITDA includes provisions of USD 2 million for redundancy packages vs. a gain of USD 6

million in 4Q14.

¹ Proportional consolidation method 2 Including corporate functions

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Vessel operating expenses - chemical tankers

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4,000

6,000

8,000

10,000

12,000

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USD

USD / day, total USD/day, crew

Financials

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Bunker development

72.3 65.9 66.4 52.3

39.9

(4.2) (3.9) (3.2)

2.7

10.0

(0.4) (0.7) (0.2)

16.6 14.7

67.761.3 63.0

71.664.5

(20)

(10)

-

10

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30

40

50

60

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1Q14 2Q14 3Q14 4Q14 1Q15

US

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illNet Bunker Cost

Bunker purchase Bunker clauses Bunker hedging Net bunker cost

0100200300400500600700800

10 11 12 13 14 15

USD

/mt

Platts 3.5% FOB Rotterdam

hallooooooooooooooooooo

• Net bunker cost in 1Q15 was USD 475 per tonne

before hedging vs. USD 565 last quarter.

• About 50% of the 2015 exposure is hedged at

an average of USD 525 per tonne.

• Bunker clauses in CoAs cover about 50% of the

exposure.

• Net bunker cost in 1Q15 was USD 475 per tonne

before hedging vs. USD 565 last quarter.

• About 50% of the 2015 exposure is hedged at

an average of USD 525 per tonne.

• Bunker clauses in CoAs cover about 50% of the

exposure.

Financials

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Income statement¹ – 1Q15 tank terminals

USD mill 1Q15 4Q14

Gross revenue 27 24


General and administrative expenses (4) (5)



Impairment (reversal) - 5

Capital gain/(loss) - 0

Operating result (EBIT) 1 (1)

Financials


• The tank terminal segment shows improvements and delivers a positive operating result.

• The gross occupancy rate improved to 91% versus 87% last quarter .

• The tank terminal segment shows improvements and delivers a positive operating result.

• The gross occupancy rate improved to 91% versus 87% last quarter .

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Tank terminals EBITDA – by geographical segment

‐2

5

4

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-3-2-10123456

Europe NorthAmerica

Asia Middle East

US

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illYTD 2015

EBITDA Tank Terminals by geographical segment 1Q15 4Q14

Europe (2) (7)North America 5 3Asia 4 3Middle East 2 2Total EBITDA 9 2

• The tank terminal group delivered an EBITDA of USD

9 million in 1Q15.

• Strengthened results in most areas.

• The tank terminal group delivered an EBITDA of USD

9 million in 1Q15.

• Strengthened results in most areas.

Financials

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Balance sheet¹ – 31.03.2015

USD mill - AssetsShips and newbuilding contracts 1 294

Other non-current assets/receivables 76

Investment in associates and JV’s 376

Total non-current assets 1 745

Available-for-sale investments and cash 112

Other current assets 122.

Total current assets 234

Total assets 1 980

Equity and liabilitiesTotal equity 604

Non-current liabilities and derivatives 47

Non-current interest bearing debt 879

Total non-current liabilities 926

Current portion of interest bearing debt 296

Other current liabilities and derivatives 152

Total current liabilities 449

Total equity and liabilities 1 980

• Cash balance of USD 112 million - excluding JV’s cash.

• Net investment in tank terminals JV’s USD 313 million.

• Unrealised negative value on hedging derivatives with negative equity effect of USD 49.3 million.

• Equity ratio 30.5%.

• Cash balance of USD 112 million - excluding JV’s cash.

• Net investment in tank terminals JV’s USD 313 million.

• Unrealised negative value on hedging derivatives with negative equity effect of USD 49.3 million.

• Equity ratio 30.5%.

Financials

¹ Equity method

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Debt development – 31.03.2015

• We are on track with the refinancing of mortgage loans maturing in 2015.

• New loan facility drawn in 1Q15 in connection with delivery of Bow Triumph.

• Anticipate to have completed all refinancing of mortgage loans within 2Q15.

• Expect to raise additional liquidity when refinancing mortgage loans.

• NOK 600 million bond matures in December 2015.

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1Q15 2015 2016 2017 2018 2019

USD

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Debt Portfolio

Ending balance Repayment

Financials

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2015 2016 2017 2018 2019

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Debt Repayments

Secured loans Balloon LeasingNOK bond 12/15 NOK bond 12/17 NOK Bond 12/18

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Capital expenditure programme

In USD mill – per 31.03.2015 Remaining 2015 2016 2017 2018 2019

Chemical Tankers, Odfjell share

Docking 15 18 17 17 17

Other investments 5 4

Odfjell Gas, 100%1)

Sinopacific, 4 x 17,000 cbm 18 131

Sinopacific, 4 x 22,000 cbm 5 30 144

Tank Terminals, 100%

Planned capex 56 54 32 7 5

Financials

1) Odfjell SE (50% owner) is committed to inject up to USD 50 million in equity in 2015 - 2017

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Terminal projects and expansionsOperational review

halloooooooooo

• In Houston, the new 17,150 cbm tank pit (Bay 10) is under construction with an

expected completion date in the fourth quarter 2015 .

• The construction of the new Tianjin Terminal in China was mechanically completed, as

of April 2015.

• The jetties are operational and the tank farms are currently receiving operating permits

from the necessary authorities.

New tank farm at the Tianjin Terminal in China The first customer discharging cargoes in Tianjin

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Tank terminal capacity

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Cubic Metres`00

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Mineral oil storage Chemical storage Ongoing expansions

Current capacity 5,431,790

Ongoing expansions 467,542

Current capacity 5,431,790

Ongoing expansions 467,542

Total capacity in CBM (incl. related parties):

Operational review

* Odfjell’s ownership share in the respective tank terminals is shown in percentage

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Odfjell Terminals (Rotterdam) – current status

Operational review

• Distillation (PID) business and re-organization strategy implemented last year has

improved the results further.

• EBITDA negative USD 2 million in 1Q15 (Odfjell share), compared to negative

USD 7 million last quarter.

• Available capacity increased from 550,000 cbm year end 2014 to 826,000 cbm

per March.

• As of March the commercial occupancy was at 87%, and 100% per April.

• The distillation columns are fully operational, utilizing all columns for the first time

since 2012.

• Management is contemplating bringing on additional commercial capacity based

upon market demand.

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Odfjell Gas Carriers

Continued postive results from the operations in 1Q15.

Positive contribution from continued long-haul activity.

Expectations for 2Q15 are on par with 1Q15.

Operational review

USD mill 1Q15 4Q14Gross revenue 4 4

EBITDA 1 1

EBIT 1 1

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hhhhhhhh

Fleet development - last 12 months

Operational review

Fleet additions DWT Built Tanks Transaction

April 2015 Marex Noa 12 478 2015 Stainless Long-term TC

March 2015 Gion Trader 19 883 2015 Stainless Medium-term TC

January 2015 Bow Triumph 49 600 2015 Coated Owned

October 2014 Bow Trident 46 600 2014 Coated Owned

August 2014 Kristin Knutsen 19 152 1998 Stainless Short-term TC

June 2014 Bow Tribute 46 000 2014 Coated Bareboat

May 2014 UACC Mansouria 45 352 2013 Coated Short-term TC

April 2014 Bow Trajectory 46 000 2014 Coated Bareboat

April 2014 Bow Harmony 33 619 2008 Stainless Purchase

Short-term: Up to one yearMedium-term: 1-3 years

Fleet disposals, owned DWT Built Tanks Transaction

January 2015 Bow Pilot 6 008 1989 Stainless Sale

Odfjell has no further chemical tankers on order, but has medium term time-charter contracts for

newbuildings on order by third parties

Odfjell has no further chemical tankers on order, but has medium term time-charter contracts for

newbuildings on order by third parties

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Reducing cost and improving efficiency

• Project Felix has been running for three

months.

• FTE reductions are on track for all

improvement areas. 48% of employees

redundant before September 2015

(excluding early retirment) have new

employment or confirmed future plans

Project Felix

• Cost reduction initiatives are ahead of schedule. Focus for next two quarters will be

on profitability improvement and fleet optimization.

• Bunker initiatives are expected to take full effect end 2015 and 2016.

• The goal is to implement improvement initiatives that will improve our net result by

in excess of USD 100 million on a yearly basis within end of 2016.

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hhhhhhh

48% of Felix improvements are implementedApproximately 10% behind plan

10%

100%

20%

60%

30%

80%

90%

70%

40%

50%

34%

54%

Mar.

60%

Feb.

39%

88%

% of total

Dec. 2016

Dec.

% of total

Dec 2014

17%

48%

Jan.

100%

39%

80%

Sep.

69%

Nov.

81%

Oct.Aug.

79%

Jul.Jun.

81%75%

61%

MayApr.

43%

PlannedActual

Total profit improvement potential (%, “run rate”, March 2015)

2015

69 %

88 %

Project Felix

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Market update – chemical tankers

• The activity in the quarter was steady, both with respect to our contract and spot

cargoes.

• ODFIX index closed 3% lower than previous quarter.

• Slightly reduction in volume.

• A continued strong clean petroleum market (CPP market.)

• Contracts are mostly renewed at higher rates and adjusted for lower bunker price.

Market update and prospects

25

hhhhhhhhhhhhh

Core Chemical Deep-sea Fleet 2004-2018Orderbook and estimated demolition per April 21st, 2015

* Outphasing 30 years (Europe built) and 25 years (Asian built)Source: Odfjell FLEETBASE


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Deliveries OrderbookActually demolished Estim. vessel outphasingNet fleet growth

% of year-start fleet

Average annual net growth:2004-2014: 7.2%2015-2018: 5.2%

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Prospects

• The U.S. economy's growth is expected to reach at least 3% during the next quarters.

• The pace of the euro area’s recovery improves.

• We expect continued improved results for our chemical tankers.

• We expect increased earnings at the Odfjell Terminals due to capacity expansions and

continued positive development at Odfjell Terminals (Rotterdam).


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Company representatives

Terje Iversen – CFO, Odfjell SE

Email: [email protected]

Phone: +47 932 40 359

IR – contact:

Tom A. Haugen – VP Finance, Odfjell SE


Phone: +47 905 96 944

Tore Jakobsen – CEO, Odfjell SE


Phone: +47 908 49 190

Thank you

For more information please visit our webpage at www.odfjell.com

First Quarter 2015 Results · New tank farm at the Tianjin Terminal in China The first customer...

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