Nordic Shipholding A/S (The Group) incurred a net loss after tax of USD 3.6 million (2016: USD 4.8 million after accounting for an impairment of USD 5.1 million) in 2017 due to a weakening in the market that started since Q2 2016. The result was in line with the revised expectations as indicated in Q3 2017 Interim Report.
The Board of Directors of Nordic Shipholding A/S has approved the Annual Report for 2017 on March 28, 2018.
2017 in brief:
- The Group with its six vessels, continued to be a tonnage provider in the product tanker segment in 2017. The five handysize tankers remained commercially managed by the UPT Handy Pool (Nordic Agnetha, Nordic Amy and Nordic Ruth) and Hafnia Handy Pool (Nordic Pia and Nordic Hanne). Upon the completion of the 3-year time charter in October 2017, the 73,000 dwt LR1 Nordic Anne was successfully and without any loss of time transferred to Straits Tankers Pool.
- Gross revenue earned by the 6 vessels reached USD 32.8 million, which resulted in a TCE revenue of USD 23.2 million and an EBITDA of USD 6.7 million. Equity totalled USD 35.8 million and equity ratio reached 31.3%.
- The weaker performance as compared to 2016 was primarily due to lower than forecasted daily TCE income from the vessels deployed in the various handysize pools. The TCE revenue from Nordic Anne deployed in Straits Tankers Pool from October 2017 was also lower than the TCE revenue derived from the 3-year time charter locked in for Nordic Anne previously.
- After accounting for depreciation and financial income and expenses, the Group incurred a loss of USD 3.6 million.
- The cash sweep mechanism under the loan agreement was not activated in 2017. In 2017, the Group utilised USD 3.2 million of the previously swept excess cash to partially offset the scheduled loan amortisation.
- The actual financial performance for 2017 was in line with revised expectations of the Board, as indicated in Q3 2017 Interim Report.
Forecast for 2018:
- Based on current estimates and barring unforeseen circumstances, the Group is forecasting a minor loss (not taking into account any reversal or write-down of impairment).
- The 5 handysize vessels will remain commercially deployed in the UPT Handy Pool and Hafnia Handy Pool respectively. The LR1 vessel continue to be deployed in the Straits Tankers Pool. The projected TCE revenue from the 6 product tankers in the respective pools are expected to be in the region of USD 24.0 million – USD 27.0 million.
- After accounting for operating expenditure budgeted by the respective technical managers, the Group expects EBITDA (earnings before interest, tax, depreciation and amortisation) to be in the range of USD 7.0 million – USD 10.0 million.
- The result before tax is expected to be between USD -3.5 million – USD -1.5 million. This outlook for 2018 does not take into account any impairment of vessels’ carrying values.
- The Group is expected to meet the various covenants imposed under the loan agreements during this period.
The Board will continue to look at growth and consolidation opportunities that are accretive to the Company.