25 August 2021
NORDIC SHIPHOLDING A / S
VSCompany announcement: 13/ 2021
Posted via NASDAQ OMX on 25 august, 2021
H1 Rresult 2021
The comparison figures for the period ended 3June 0 2020 are indicated in parentheses.
The Group performed poorly in the first six months of this year, as time charter equivalent (“TCE”) rates were greatly depressed due to low tonnage demand caused by the pandemic of COVID-19 coupled with excessive tonnage in the market. As a result, the average daily rate of TCE collected in H1 2021 by ships was 58% lower than the average daily rate of TCE collected in H1 2020.
For the six-month period ended June 30, 2021, the Group recorded an after-tax loss of $ 6.0 million (including exceptional impairment losses totaling $ 4.8 million on vessels), against an after-tax profit of $ 5.7 million (including one excluding an impairment loss of $ 2.0 million on ships) for the same period last year. The significant drop in TCE rates coupled with the loss of income resulting from the sale of two vessels, Nordic Hanne and Nordic Pia, in April 2021 resulted in the loss incurred in H1 2021.
Expenses related to vessel operations in the first half of 2021 are less than USD 5.2 million (USD 5.7 million) mainly due to the sale of Nordic Hanne and Nordic Pia in April 2021.
EBITDA decreased significantly to $ 0.8 million ($ 13.0 million) due to lower TCE revenue generated in the first half of 2021. Other external costs remained unchanged at $ 0.7 million ( 0.7 million USD).
As reported in company announcement 12/2021, merger discussions with potential merger partners have stalled. The Company, however, keeps its options open in its continued search for suitable merger partners. In accordance with the agreement with the lenders, management has put in place a process to sell the remaining three vessels in an orderly fashion. Thus, the Group recognized an impairment loss of $ 4.5 million in the first half of 2021 ($ 2.0 million) following the reclassification of the three remaining vessels, Nordic Agnetha, Nordic Amy and Nordic Anne, as assets held in view of sale (re-classification of Nordic Hanne as an asset held for sale). Due to the volatility of the market, it should be noted that the estimate of the expected sale value of these vessels is very uncertain.
The Group recognized an additional impairment loss of $ 0.4 million in the first half of 2021 (USD NIL) due to the recognition of certain additional expenses related to the sale of Nordic Hanne and Nordic Pia which took place in April 2021 .
After taking into account depreciation, amortization, interest charges and other financial charges, the after-tax loss amounted to US $ 6.0 million in the first half of 2021 (profit of US $ 5.7 million).
Between December 31, 2020 and June 30, 2021, equity decreased from US $ 8.5 million to US $ 14.5 million due to the cumulative loss incurred during the period. The Board discusses with the various stakeholders of the Group to ensure the proper liquidation of the Group in a responsible manner.
Following successful negotiations between the Group’s main shareholder, management and the lenders in December 2020, an agreement was reached with the lenders for an extension of the Company’s credit facility for an additional year until December 30. 2021. Terms of the renegotiated financing agreements include, but are not limited to (i) the sale of two vessels, Nordic Hanne and Nordic Pia, during the first half of 2021, (ii) the extension of the existing bank guarantee of 3.85 million USD provided by the majority shareholder until early 2022, (iii) the reinstatement of quarterly loan payments from December 2020, and (iv) new financial covenants such as the revised minimum liquidity level and minimum value clauses. The loan extension was to give the Company more time to explore various sustainable scenarios, including the possibility of a merger.
The Group is also subject to a quarterly cash transfer mechanism under which the Group, after payment of down payments and interest under the loan agreement, must allocate any Group cash and cash equivalents in excess of USD 6.0 million to repay advance of the loan. There was no cash sweep in H1 2021 (cashweep of US $ 11.1 million was used to repay the loan in H1 2020).
During the year under review, cash flow from operations was a net outflow of $ 0.4 million (net inflow of $ 11.9 million) after payment of periodic interest charges on the loan. in the long term. In addition to quarterly payments totaling $ 2.1 million, the net proceeds from the sale of Nordic Hanne and Nordic Pia were used to prepay bank loans in the first half of 2021. Accordingly, cash and cash equivalents cash flow was reduced to $ 2.6 million as of June 30, 2021 from $ 5.4 million as of December 31, 2020.
Nordic Hanne and Nordic Pia made a commitment to sell when the sale and purchase memoranda of understanding were signed in January 2021 and February 2021, respectively. Nordic Hanne was released from the Hafnia Handy Pool on March 31, 2021 and was then delivered to its new owner on April 19, 2021. Nordic Pia was delivered to its new owner on April 20, 2021.
Assuming the three remaining vessels remain in the Hafnia Handy Pool and Hafnia LR Pool respectively until they are sold in Q4 2021, TCE revenue for 2021 is expected to be in the order of 9 , $ 0 million to $ 11.0 million. After taking into account the operating expenses budgeted by the respective technical managers, the expected Group EBITDA (earnings before interest, taxes, depreciation and amortization) for 2021 is of the order of NIL USD at 2.0 million USD, and the pre-tax profit is expected to be a loss of between -4.5 million USD and -2.5 million USD, including depreciation. The outlook for 2021 does not take into account any new depreciations or reversals of depreciation of the book values of the ships.
The outlook for 2021 remains unchanged as stated in company announcement 12/2021 on August 24, 2021.
For more information, please contact:
Mr. Jon Lewis, Vice-President, Nordic Shipholding A / S: +45 39 29 10 00
NSH S1 2021 Financial Announcement