american shipping company asafiles.zetta.no/...shipping company asa ("amsc" or the...
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Presentation of Q4 201714 February 2018
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.
Fourth Quarter 2017 Highlights Adjusted net profit of USD 4.0 million*
Normalized EBITDA** of USD 22.1 million• No profit share
• DPO of USD 0.9 million
Declared Q4 dividend of USD 0.08 per share, consistent with prior guidance
• Ex-dividend date of 20 February 2018 with payment on or about 1st
March 2018
• Classified as a return of paid in capital
Improved market conditions for Jones Act tankers
• Increasing demand for transportation of both crude oil and clean
products
• Limited supply growth going forward
• TCE rates for short term fixtures reportedly above USD 50,000 per day
* 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 Q4 17 is USD 21.2 million
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Normalized EBITDA* (USD millions) Normalized EBITDA* per quarter (USD millions)
Stable, Predictable EBITDA
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• Normalized EBITDA* of USD 22.1 million in Q4 17 (USD 24.3 million in Q4 16)• No profit share in Q4 17 (USD 1.8 million in Q4 16)• DPO of USD 0.9 in Q4 17 (USD 1.0 million in Q4 16)
* Including Profit Share (except 2017 when profit share was zero) and DPO. Reported EBITDA for Q4 17 is USD 21.2 million
85 85 85 85
443110116
0
10
20
30
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2014 201720162015
Reported EBITDADPOProfit Share
21 21 21 22 21 21 21 21 21 21 21
4 33 4 3 2
21
1
02468
101214161820222426
1
Q2 15
1
Q1 15
1
Q1 16
1
Q4 15
1
Q3 15
1
Q4 17Q3 17
1
Q2 17
1
Q1 17
1
Q4 16
1
Q3 16
11
Q2 16
1
Reported EBITDADPOProfit Share
Long-term fixed rate bareboat charters to OSG secures cash flow
Fleet Deployment Overview
5* All vessels excluding Overseas Tampa which is contracted to June 2025
2017-19 2019 - beyond
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Anacortes
Boston
Houston
Long Beach
Los Angeles
Martinez
New York
Nikiski
Tampa
Texas City
Vessel End users
• AMSC’s fleet is on firm BB Charters to OSG until December 2019* plus 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
Delaware Bay Lightening (Crude)
Shuttle tankers from deep water U.S. Gulf to Gulf Coast Refineries (Crude)
Crude from Corpus Christi, TX to LOOP (not shown)
Jones Act crude oil & products primary trade routes
A Critical Part of Oil Majors’ Transportation Logistics
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Jones Act Tanker Routes: Gulf Coast refineries to Florida and East Coast (Clean)
Mid-Atlantic to New England (Clean)
Alaska and Intra-west coast movements (Clean/Dirty)
Cross-Gulf movements (Dirty)
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Key US Oilfields
Key Pipeline / rail
Barges 16
4
2
5
3
US GULF
BAKKEN
EAGLE FORD
PERMIAN
Corpus Christi 1
Patoka, IL
Jones Act tanker fleet deployment by main trades (Tankers and ATBs)
Majority of Fleet carry Clean Products, but Swing Demand Derived from Shale Transportation
7Source: Navigistics’ Wilson Gillette Report, Dec 2017 and AMSC analysis
4 %2 %
7 %
16 %
49 %
22 %Idle
MSC
Chemicals
West Coast
Clean USG
Crude Oil
Seaborne products transport from Gulf Coast to East Coast is very consistent (Mbbls per month)
Increasing Clean Product Volumes
8Sources: EIA
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15
20
25
Mbb
l
East Coast (PADD 1) Receipts by Tanker and Barge from Gulf Coast (PADD 3) of Total Petroleum Products
Intra PADD 3 Crude Oil Moves by Area of Loading, (KBD’s)
PADD 3 to PADD 1 Crude Oil Moves by Tanker and Barge (Mbbls per month)
Crude Shipping Volumes Stabilizing Intra Gulf whilst Returning to Peak Levels on East Coast
9Source: ClipperData December 2017, EIA, Marine Traffic and AMSC analysis
JA USG loading of 650m bbls per day utilizes~11 vessels for USG crude trade (assuming 5 days roundtrip)
Volumes poised to recover
Volumes in East Coast trade is back to ~5 tankers, up from ~1 tanker
Volumes driven by spread in pricing of US oil vsinternational alternatives
- Argus Houston vs. Bonny Light
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1
2
3
4
5
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jan‐2013
mar‐2013
mai‐2013
jul‐2
013
sep‐2013
nov‐2013
jan‐2014
mar‐2014
mai‐2014
jul‐2
014
sep‐2014
nov‐2014
jan‐2015
mar‐2015
mai‐2015
jul‐2
015
sep‐2015
nov‐2015
jan‐2016
mar‐2016
mai‐2016
jul‐2
016
sep‐2016
nov‐2016
jan‐2017
mar‐2017
mai‐2017
jul‐2
017
sep‐2017
nov‐2017
jan‐2018
Mbb
l
PADD 3 to PADD 1 Crude Oil Moves
PADD 3 to PADD 1 Crude Oil Moves by Number of Tanker Liftings
Crude Oil Price Spread - Argus Houston vs. Bonny Light
Oil Price Spread - Key Driver for Increase in PADD 3 to PADD 1 Crude Shipping Volumes
10Source: Bloomberg, Pareto
Steady cargo growth in Q4 2017
~ 5 tankers in shuttle activity from U.S. Gulf up to North East refineries
YTD 10x cargoes delivered or in transit
Crude loaded in Houston vs. West Africa needs to be minimum $1.50 cheaper to be competitive for U.S. East Coast Refiners
Spread has been sufficiently wide since Aug/Sept 2017
‐2
‐1,5
‐1
‐0,5
0
0,5
1
1,5
2
2,5
3
feb. 16
mar. 16
apr. 16
mai. 16
jun. 16
jul. 16
aug. 16
sep. 16
okt. 16
nov. 16
des. 16
jan. 17
feb. 17
mar. 17
apr. 17
mai. 17
jun. 17
jul. 17
aug. 17
sep. 17
okt. 17
nov. 17
des. 17
0
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9
aug.17 sep.17 okt.17 nov.17 des.17 jan.18 YTD feb.18
Candidates for scrapping
Fleet profile by vessel age Considerable fleet growth over the last 3 years, but scrapping likely to bring fleet back to 2015 levels
Limited Remaining Fleet Growth and Scrapping Continues
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1
2
3
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25 510 150 3045 1540 35 20
# vessels Scrap/lay up AMSC
TankersATBs
11Source: Navigistics’ Wilson Gillette Report Dec 2017, broker reports and AMSC analysis
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5000
10000
15000
20000
25000
30000
2012 2013 2014 2015 2016 2017 2018 2019Fleet Scrapping
Actual ProjectedKbbls Capacity
2015 levels
Income Statement (unaudited)
*Applicable to common stockholders of the parent company
Figures in USD million (except share and per share information) Q4 2017 Q4 2016
Operating revenues 22.1 22.1
Operating expenses (0.9) (0.6)
Operating profit before depreciation - EBITDA 21.2 21.5
Depreciation (8.3) (8.7)
Operating profit - EBIT 12.9 12.8
Gain on investments (0.5) 2.2
Net interest expense (10.2) (9.2)
Unrealized gain/(loss) on interest swaps 1.8 6.3
Net foreign exchange gain/(loss) 0.0 0.0
Profit/(loss) before income tax 4.0 12.1
Income tax expense (2.3) 0.0
Non-cash income tax expense 4.7 (4.6)
Net profit for the period * 6.4 7.5
Average number of common shares 60,616,505 60,616,505
Earnings/(loss) per share (USD) 0.11 0.12
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Balance Sheet (unaudited)
Figures in USD millions 31.12.2017 31.12.2016
Vessels 745.6 779.5Interest-bearing long term receivables (DPO) 28.7 30.6Other non current assets 16.6 27.6Derivative financial assets 1.7 0.0Trade and other receivables 0.2 0.3Cash held for specified uses 2.3 2.3Cash and cash equivalents 52.0 49.1TOTAL ASSETS 847.1 889.4
Total equity 183.3 195.7Deferred tax liabilities 15.2 17.4Interest-bearing long term debt 600.1 636.1Derivative financial liabilities 0.0 0.1Interest-bearing short term debt 28.3 28.3Deferred revenues and other payables 20.2 11.8TOTAL EQUITY AND LIABILITIES 847.1 889.4
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Cash position increased during the quarterCASH DEVELOPMENT IN 4Q 17 (USD millions)
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21.2
4.3
7.3
4.8 54.30.8
48.7
Interest Dividends CB CashEBITDA Amortization OtherOB Cash
Investment Highlights
Highlights Comments
Increased crude shipments from U.S. Gulf to the U.S. North East Intra gulf volumes of crude shipments stabilizing Clean products trade to U.S. East Coast increased over last 18 months
INCREASED DEMAND IN KEY TRADES
NO NEW VESSEL ORDERS
LEADING MARKET POSITION WITH STABLE
CASH FLOWS
Final MR tanker delivered and only 2 smaller ATBs entering the market in 2018 No vessel orders for the past 3 years Scrapping / lay-up of older tonnage continues
AMSC has the most cost efficient modern Jones Act tanker fleet Stable cash flow from fixed rate bareboat contracts and upside potential from
profit share arrangement Committed to returning capital to shareholders through dividends, whilst
prudently managing the balance sheet and maintaining financial flexibility
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