24 October 2014 - SIEM SHIPPING INC. (the "Company"; OSE Symbol: SSI) announces its results for the nine month period and quarter ended 30 September 2014, prepared in accordance with the International Financial Reporting Standards ("IFRS"), as discussed below.
Siem Shipping Inc., operating in the specialised reefer industry as STAR Reefers, is a leading global owner and operator of refrigerated vessels and directly controls 32 vessels with a total capacity of 18 million cbft.
Net loss of USD0.2 million (Q3 2013 net income of: USD0.6 million)
EPS USD-0.02 (USD0.06)
EBITDA of USD6.0 million (USD4.2 million)
Wellington Star charter renewed for a further two-year period
Refinanced existing debt with a new USD100 million credit facility
Writedown of USD1.1 million on sale and delivery of Ecuador Star in October Approx. 93% of fleet capacity is fixed for the balance of 2014
Contract backlog: USD438 million (USD470 million)
3rd Quarter Financial Statements
Siem Shipping reported a net loss of USD-0.2 million (Q3 2013: net profit USD0.6 million).
The net loss in Q3 2014 includes a writedown of USD 1.1 million relating to sale of Ecuador Star. The delivery of the vessel to the new owner took place in October 2014. Earnings per share was USD -0.02 per share (USD0.06 per share).
Gross revenue was USD57.8 million (USD58.4 million) and available capacity increased by
9% to 55.6 million cbft. (51.1 million cbft.). Net operating revenue after voyage expenses was USD39.4 million (USD36.9 million). The increase in net revenue was due to more capacity being available and higher rates being earned. The third quarter 2013 was affected by the four C-Class vessels (Caribbean Star, Costa Rican Star, Cote D'Ivoirian Star, and Colombian Star) not being operational for the whole quarter due to the lengthening project.
1
Ship operating and administrative expenses were USD16.8 million (USD16.3 million), with the increase mainly due to an increase in repair and maintenance costs.
Time charter and bareboat expenses were USD16.6 million (USD16.4 million).
Depreciation and amortisation was USD3.3 million (USD2.5 million). The increase in depreciation was due to a higher depreciation base following the investment in the lengthening of the four C-Class vessels.
Interest expense was USD1.9 million (USD1.1 million). The increase in interest expenses was due to the loan facility financing the lengthening of the four C-Class vessels.
Other financial items were USD0.1 million (USD-0.1 million) of which the mark-to-market of
5-year interest swaps amounted to a gain of USD0.2 million (USD0.1 million).
The Company reported a net income of USD1.4 million (net income USD5.3 million).
Earnings per share was USD0.15 (USD0.54).
Gross revenue was USD178.8 million (USD196.5 million). Net operating revenues after voyage expenses were USD114.9 million (USD113.9 million). The available capacity reduced by 0.2% to 162.4 million cbft (162.7 million cbft).
Ship operating and administrative expenses were USD49.4 million (USD48.8 million)
primarily due to increased repair and maintenance costs.
Time charter and bareboat charter expenses decreased to USD49.2 million (USD49.5 million).
Depreciation and amortisation was USD9.5 million (USD7.8million). The increase in depreciation was due to a higher depreciation base following the lengthening of the four C- Class vessels.
The Ecuador Star was sold in September resulting in a net book loss of USD1.1 million and the delivery to the new owner was made in October 2014.
Interest expense was USD4.5 million (USD2.6 million). Interest expense increased due to net increased borrowing and higher interest rates.
Other financial items were USD0.2 million (USD0.3 million), which included the mark-to- market of 5-year interest swaps gain of USD0.5 million (USD0.6 million).
Shareholders' equity was USD157.9 million at 30 September 2014 (31 December 2013:
USD156.5 million) or USD16.36 per share (31 December 2013: USD16.22 per share). On 30
September 2014, Siem Shipping refinanced its credit facility with ABN AMRO and Siem Industries Inc. (76.8% shareholder of the Company) with a six-year USD 100 million loan from ABN AMRO and Credit Suisse. Part of this (USD 70 million) was drawn and the proceeds were used to repay the interest-bearing debt to ABN AMRO (USD12.1 million) and Siem Industries (USD44 million). The balance will be available for general working capital
2
purposes and for the possible acquisitions of vessels. The new facility carries an interest rate of Libor plus a margin of 2.4%, an arrangement fee of 1% and a commitment fee of 1%. The first scheduled repayment of the facility is scheduled in November 2014. In addition to the liabilities on the balance sheet, Siem Shipping has significant long-term charter commitments (see note 7 to the accounts).
In Q3 2014, the average market spot rates were 31 cents per cubic foot per 30 days ("cents"),
similar to the same period in 2013 (32 cents). During the third quarter, however, there were limited opportunities for fixing spot banana cargoes as volumes reduced out of Ecuador. The banana traders switched some of their business from conventional reefer vessels and accepted the very aggressive rates that were available on container vessels. The political unrest in a number of the Mediterranean markets impacted on volumes even though local prices for fruit were reasonably strong.
The adverse climatic conditions in Argentina severely affected citrus exports, with a year-on- year 45% reduction in the lemon exports to the Mediterranean. The citrus crop in South Africa also suffered. Black spot issues reduced exports to the EU, but shipments to the US East Cost were greater in number and size than expected.
During the first nine months of 2014, unplanned off-hire due to technical reasons was 0.7%
(2013: 0.5%). During the third quarter of 2014, there were four operational incidents leading to off-hire; however, none of the incidents was of a material character.
The statistics of our in-house technical management company, STAR Reefers Poland, continue to demonstrate superior performance to those the Company experienced with third- party managers in the past. The Company was saddened by the death of an off-duty Able Seaman on board the Colombian Star in a tragic self-inflicted accident in September.
In December 2012, Siem Shipping entered into a contract with Alaska Reefer Management to
charter-out the Wellington Star. This contract was renewed in 2013 and has now been renewed again for a two-year period.
The project to lengthen the four C-Class vessels was completed in March 2014. The project took longer than anticipated due to delays by the shipyard. The first two vessels were redelivered in 2013, the third vessel was redelivered in January 2014 and the fourth vessel was redelivered in March 2014. The yard has submitted contract variations on all four vessels for claims for more time on the projects than it had anticipated when it signed the contract. The claims are disputed by the Company. To avoid any delay in redelivering the last vessel, Siem Shipping issued a guarantee letter to Quingdao Beihai Shipbuilding yard stating that it would reimburse any costs for which it was properly liable. Siem Shipping has taken legal advice in this matter and is hopeful that an amicable settlement can be achieved. All four vessels are contracted-out on seven-year time charters.
As of 30 September 2014, 93% of fleet capacity for the remainder of 2014 had been fixed. The contract backlog at 30 September 2014 was USD438 million.
3
Even though Siem Shipping's fleet is only modestly exposed to the reefer spot market, there
is, however, little doubt that a low spot market has an impact on the rates which can be achieved for term contracts. The general outlook remains unchanged: the 2014 spot market appears to have contracted significantly and reefer operators have responded by becoming more trade-route orientated.
The impact of Russian sanctions will be better understood over the coming months. The sanctions have reduced fruit exports from Europe to Russia and seem to be stimulating greater trade to the Russian Baltic from a number of non-EU countries in North Africa and South America.
Further evidence of aggressive pricing by the container lines was demonstrated during the third quarter, with Hamburg Sud offering a 12-month low-cost service to one of the banana majors. It is anticipated that this type of predatory pricing behaviour will continue whilst the container operators suffer from low demand for their services.
23 October 2014
The Board of Directors of Siem Shipping Inc.
This release contains certain forward-looking statements regarding the intents, beliefs or current expectations. These forward-looking statements are based on information currently held. The Company assumes no obligation to update these statements. It is important to note that these forward- looking statements involve uncertainties about future performance. The Company's actual results may differ materially from these statements as a result of various important factors beyond the control of the Company.
4
SIEM SHIPPING INC. GROUP- 3rd QUARTER 2014
STATEMENTS OF COMPREHENSIVE INCOME (in $ thousand) | 2014 Q3 | 2013 Q3 | 2014 Jan-Sep | 2013 Jan-Sep | 2013 Jan-Dec |
Unaudrted | Unaudrted | Unaudrted | Unaudrted | Audrted | |
Gross revenue | $ 57,772 | $ 58, 362 | $ 178,772 | $ 196,498 | $ 255,433 |
Voyage expenses and other operating revenue | -18,380 | -21,435 | -63,835 | -82, 642 | -105,726 |
Net operating revenue | 39,392 | 36,927 | 114,937 | 113,856 | 149,707 |
Ship operating and administrative expenses | -16,842 | -16,341 | -49,407 | -48,779 | -66,955 |
lime charter hire | -16,160 | -15,915 | -47,961 | -48,241 | -64,343 |
Op. income bef. depr. and bare-boat hire | 6,390 | 4,671 | 17,569 | 16,836 | 18,409 |
Bareboat charter hire | -425 | -438 | -1,260 | -1, 243 | -1,662 |
Depreciation and amortisation | -3,262 | -2, 537 | -9,479 | -7, 753 | -10,286 |
lmpaimnent charges | -300 | -300 | |||
Operating income | 2,703 | 1,696 | 6,830 | 7,540 | 6,161 |
lnterest expense | -1,903 | -1,055 | -4,546 | -2,584 | -3,715 |
Other financial items net | 71 | -65 | 238 | 317 | 308 |
Loss on sale ofvessels | -1,059 | -1,059 | |||
Net financial items | ·2,891 | ·1,120 | -6,367 | ·2,267 | -3,407 |
Net ineome l (loss) before tax | -188 | 576 | 1,463 | 5,273 | 2,754 |
Taxes | -10 | -6 | -36 | -21 | -32 |
Net income | $ -198 | $ 570 | $ 1,427 | $ 5,252 | $ 2,722 |
Other comprehensive income | |||||
Total comprehensive income l (loss) | $ ·198 | $ 570 | $ 1,427 | $ 5,252 | $ 2,722 |
Eamings l (loss) per share, basic and diluted (amounts rn $) | -0.02 | 0.06 | 0.15 | 0.54 | 0.28 |
'Md. avg. common shares outstandrng | 9,647,479 | 9,647,4 79 | 9,647,479 | 9,647,4 79 | 9,647,479 |
lssued and outstanding s hares | 9,647,479 | 9,647,4 79 | 9,647,479 | 9,647,4 79 | 9,647,479 |
STATEMENTS OF FINANCIAL POSITION 2014 2013 2013
30 Sep 30Sep 31 Dee
(in $ thousand) Unaudrted Unaudrted Audrted
ASSETS
Tangible non-current assets :
Ves sels | $ 191,378 | $ 166,949 | $ 187,483 |
Capitalis ed project costs | 20, 360 | 13,362 | |
Other non-c urrent assets | 106 | 194 | 169 |
Other non-current as sets | |||
P ension funds Current as sets: lnventory | 195 8,082 | 213 9, 026 | 195 8,301 |
Non-current as se!held for sale l s old | 3,915 | ||
Receivables and other c urrent ass ets | 19,978 | 29,733 | 24,512 |
Bank deposits | 28,338 | 11,996 | 16,577 |
Total assets | $ 251,992 | $ 238,471 | $ 250,599 |
SHAREHOLDERS' EQUITY ANO LIABILITIES Shareholders' equity: Share capitai | $ 96 | $ 96 | $ 96 |
Additional paid-in capitai | 78,687 | 78, 687 | 78,687 |
Retained eamings | 79,095 | 80,198 | 77,668 |
Total shareholders' equity | 157,878 | 158,981 | 156,451 |
lnterest-bearing debt, long-temn | 57,333 | 37,496 | 46,558 |
lnterest-bearing debt, short-temn | 11,467 | 11, 920 | 11,944 |
Other short-temn debt | 25,314 | 30, 074 | 35,646 |
Total liabilities | 94,114 | 79,490 | 94,148 |
Total shareholders' equity and liabilities | $ 251,992 | $ 238,471 | $ 250,599 |
5
1
STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (in $ thousand) Shareholders' equity at beginning of period - Net profit for the period Shareholde rs' equity at end of period | 2014 2013 2013 Jan-Sep Jan-Sep Jan.Oec Unaudtted Unaudited Audtted |
STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (in $ thousand) Shareholders' equity at beginning of period - Net profit for the period Shareholde rs' equity at end of period | $156,451 $ 153,729 $ 153,729 1,427 5,252 2,722 |
STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (in $ thousand) Shareholders' equity at beginning of period - Net profit for the period Shareholde rs' equity at end of period | $157,878 $ 158,981 $ 156,451 |
STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (in $ thousand) Shareholders' equity at beginning of period - Net profit for the period Shareholde rs' equity at end of period |
6
Notes to the Accounts
1 Basis for preparation
The consolidate d financial statements have been prepared in accordane e lNith lAS 34 "InterimFinancialReporting".
The interim financial inforrnation for 2014 and 2013 are unaudited.
2 Significant accounting policies
The accounting policies used in the prepamtion ofthe financial statements are consistent lNith those disclosed in the armual financial statements forthe year ended 31 December 2013. The consolidated condense d financial statements should be re ad in conjunction lNith the 2013 annual financial statements, which include a full description ofthe Group's accounting policies.
3 Segment reporting
The Siem Shipping fie et consists of32 specialised reefer vessels lNith an average size of 569,000 cbft. The smallest vessei
has a capacity of 424,000 cbft and the largest vessel618,000 cbft. The vessels primarily transport fruii from the Southem to the Northem hemisphere.
Revenue Q3 2014
Q3 2013 Jan-Sep 2014 Jan-Sep 2013
2013
Bananas 87>/o
89%
82% 87%
90%
Deciduous
C:itrus Fish Other
O"/o 0%
Z'/o 3%
9% 7%
Z'/o 1%
7% 4% 3%
3% 3%
7% 5% 4%
1% 1% 1%
Total 100%
100%
100% 100%
100%
4 Revenue
Revenue consists oftime charters and voyage charters.
Other operating revenue consists ofnet revenue fromshort-termcharters on non-core vesse1s and management fees.
{in $ thousand) Q3 2014
Q3 2013 Jan-Sep 2014 Jan-Sep 2013 2013
Gross revenue T/C Gross revenue V/C Total gross revenue
Voyage e.:>penses and other operating revenue
29,107
28,665
57,772
-18,380
25,412 80,896 79,344 103,790
32,820 97,876 117,154 151,643
58,232 178,772 196,498 255,433
-21,435 -63,835 -82,642 -105,726
Net operating revenue 39,392
5 Tangible assets
(in $ thousand)
Book value beginning ofyear
Additions, including capitalised project costs
Reclassification- assets he1d for sale l so1d
Depreciation and arnortisation of dry-docking forthe period
36,797 114,937 113,856 149,707
30-Sep-14 30-Sep-13 31 Dee 13
201,014 174,263 174,263
7,647 23,151 39,977
-3,915
-12,204 -9,911 -13,226
Loss on sale ofasset -1,058
Book value end ofperiod 191,484 187,503 201,014
7
6 Interest-bearing debt
(in $ thousand)
Balance (including financing fees) 31 December 2013
Newdebt Repaid debt Financing fees
Balance (including financing fees) 30 September 2014
Balance (including financing fees) 30 September 2013
7 Charter conunitments
Siem
Industries ABNAMRO
Loan Syndicate Total
34,614 23,888 58,502
9,000 70,000 79,000
-44,000 -24,260 -68,260
386 -828 -442
68,800 68,800
25,576 23,840 49,416
From l October 2014
(in $ thousand) 2014 2015 2016-2023 Total
Long -term charters 16,283 63,419 361,921 441,623
8 Related parties
Siem Industries lnc. oVlls 76.8% ofSiem Shipping lnc. Mr. Kristian Siemis Chainnan ofthe Board in Siemlndustries. Siem Industries is controlled by a trust whose potential beneficiaries include M r. Kristian Siemand his family.
The Company leases office space from other Siem Group companies and shares joint office facilities Vith other corrq:mnies
in the Siem Group in the Cayman Islands.
Siemlndustries has provided secondary guarantees forthe timely payment ofcharterhire, relating to certain ofthe vessels Siem Shipping has on long-termcharters. The fee paid to Siemlndustries for providing the guarantees year to date VaS USD0.4 million. SiemCar Carriers AS is indirectly 1000/o oVIle d by Siemlndustries. Siem Shipping provides management services to SiemCar Carriers on an anns' length basis and the fee charged yearto date September 2014
VaS USDO.S million.
In January 2013, the Company secured USD35 million offinancing for the lengthening ofthe four C-Class vessels
{Caribbean Star, Costa Rican Star, Cote D'Ivoirian Star and Colombian Star) from Siemlndustries lnc. The loan is a
3.5-year unse cure d loan, lNith an arrangement fee of 1.5% and a connnitment fee of3.5% p.a., and carries an interest rate of
3-month Liborplus a margin of8.5% p.a. In March 2014, Siemlndustries provided an additional USD9.0 million for one year for financing ofthe lengthening project and addrtional working capitai. The loan is also an unse cure d loan, lNith an arrangement fee of0.5% and a connnitment fee of2.5% p.a., and canies an interest rate of3-month Libor plus a margin of
8.5% p.a. Totalinterest, connnitment and arrangement fee e.xpenses year to date September 2014 were USD2.7 million. The Group refinanced ali interest-bearing debt on 30 September 2014, when ali interest-bearing debt to Siemlndustries
VaS repaid.
Also doVllload ourweb p age: VVV.siemshipping.com
For further inforrnation, please contact
Simon Stevens, CEO -+44 207 747 0500
8
distributed by |