Grindrod Shipping Holdings Ltd. 2020 Second Half and Full Year Financial Results
Grindrod Shipping Holdings Ltd. (NASDAQ: GRIN) reported its second half and full year 2020 earnings, revealing revenues of $112.1 million for H2 and $279.2 million for the full year. The company faced a loss of $28.3 million in H2, attributed to impairment losses of $12.6 million on ships. However, in a challenging market, the supramax/ultramax fleet outperformed the Baltic Supramax-58 TC Index by 11%. Cash and cash equivalents stood at $50.6 million, including $12.6 million in restricted cash.
CEO Martyn Wade expressed cautious optimism for 2021, anticipating improved drybulk market fundamentals post-COVID.
- Second half revenue of $112.1 million, showing resilience in a tough market.
- Supramax/ultramax fleet outperformed Baltic Supramax-58 TC Index by 11% in H2.
- Period-end cash and bank balances of $50.6 million, ensuring liquidity.
- Full year loss attributable to owners of $38.8 million, or $2.05 per share.
- Revenue decline from $331 million in 2019 to $279.2 million in 2020.
- Impairment losses of $16.3 million on ships for the full year.
SINGAPORE, Feb. 24, 2021 (GLOBE NEWSWIRE) -- Grindrod Shipping Holdings Ltd. (NASDAQ: GRIN) (JSE: GSH) (“Grindrod Shipping” or "Company" or “we” or “us”), a global provider of maritime transportation services in the drybulk and product tanker sectors, today announced its second half and full year 2020 earnings results for the period ended December 31, 2020.
Financial Highlights for the Second Half of the Year Ended December 31, 2020(1)
- Revenue of
$112.1 million - Gross profit of
$6.2 million - Adjusted EBITDA of
$18.5 million (2) - Loss for the period attributable to owners of the Company of (
$28.3 million ) or ($1.49) per ordinary share including ($12.6 million ) impairment losses on ships - Handysize and supramax/ultramax TCE per day of
$7,535 and$10,887 respectively. - Supramax/ultramax outperformed the Baltic Supramax-58 TC Index (the “BSI-58”)(3) benchmark by approximately
11.0% in the second half of 2020(2)(4) - Medium range tanker TCE per day of
$7,960 , and small tanker TCE per day of$13,680 in the second half of 2020(2) - Period end cash and bank balances of
$50.6 million , including restricted cash of$12.6 million .
Financial Highlights for the Full Year Ended December 31, 2020(1)
- Revenue of
$279.2 million - Gross profit of
$15.1 million - Adjusted EBITDA of
$47.3 million (2) - Loss for the period attributable to owners of the Company of (
$38.8 million ) or ($2.05) per ordinary share including ($16.3 million ) impairment losses on ships - Handysize and supramax/ultramax TCE per day of
$6,629 and$10,072 respectively. Supramax/ultramax outperformed the BSI-58(3) benchmark by approximately29.5% (2)(4) - Medium range tanker TCE per day of
$16,339 , and small tanker TCE per day of$12,374 (2).
(1) Our segment results include the proportionate share of our joint ventures, which differs from the consolidated statements of profit or loss in our unaudited condensed consolidated financial statements which account for our investments in joint ventures under the equity method.
(2) Adjusted EBITDA and TCE per day are non-GAAP financial measures. For the definitions of these non-GAAP financial measures and the reconciliation of these measures to the most directly comparable financial measures calculated and presented in accordance with GAAP, please refer to the definitions and reconciliations in “Non-GAAP Financial Measures” at the end of this press release.
(3) The BSI-58 is adjusted for
(4) As of January 1, 2020 the Baltic Exchange discontinued publishing the Baltic Handysize-28 TC Index and replaced it with the Baltic Handysize-38 TC Index. The new Baltic Handysize-38 TC Index does not reflect the ship types comparable to our handysize fleet and we do not believe it is an appropriate benchmark going forward.
Operational Highlights for the second half of the year ended December 31, 2020
- On July 9, 2020, we redelivered the 2013-built long-term chartered-in medium range tanker Doric Breeze.
- On September 2, 2020, we sold the 2004-built handysize drybulk vessel IVS Nightjar for a gross price of
$5.1 million . - On September 15, 2020, we took delivery of a Japanese-built eco ultramax drybulk carrier IVS Pebble Beach on a long-term charter for a minimum period of two years. We have an option to extend for up to two additional years and options to purchase the vessel in the future.
- On November 2, 2020, we sold the 2009-built handysize drybulk vessel IVS Triview for a gross price of
$7.9 million . The vessel was owned by a joint venture in which we held a51% share. - On November 15, 2020, we agreed to extend the IVS Pinehurst long-term charter for a period of 11 to 13 months commencing November 15, 2020. We retain the option to purchase this vessel at a fixed price in the future and have a further option to extend the period of the charter for an additional 11 to 13 months.
- On December 1, 2020, a loan of
$4.0 million provided by us to IVS Bulk Pte. Ltd. (“IVS Bulk”) was converted to equity in the form of “A Class” shares in line with the shareholders agreement dated February 14, 2020. The loan was initially provided on September 30, 2020 with interest calculated at LIBOR plus3.1% The transaction increased our shareholding by2.11% in IVS Bulk from66.75% to68.86% . - On December 22, 2020, we completed a financing arrangement with two Japanese shipowners relating to the 2016-built medium range tanker Matuku from which we received cash proceeds of
$26.8 million (before commissions but net of charter pre-payments). The transaction generated net proceeds of$9.3 million after settling the debt associated with the vessel. The net proceeds, together with cash on hand, were used to repay$10 million of the$35.8 million senior secured credit facility. The Matuku continues to be considered part of our owned fleet. - On December 23, 2020, we took delivery of a Japanese-built eco ultramax drybulk carrier IVS Atsugi on a long-term charter for a minimum period of two years. We have an option to extend for up to two additional years and options to purchase the vessel in the future.
- On December 30, 2020, the parties to the relevant agreements entered into amendments to our
$100.0 million senior secured credit facility, our$29.9 million senior secured credit facility, and our$114.1 million senior secured credit facility, respectively. The covenants were amended to (1) reduce the book value net worth covenant to be tested as of December 31, 2020 from$240 million to$225 million ; (2) increase the debt to market adjusted tangible fixed assets covenant from not more than75% to not more than80% as of December 31, 2020; and (3) exclude from the determination of current liabilities in the covenant that requires our current assets to exceed our current liabilities the amount owed to Sankaty under the$35.8 million senior secured credit facility for purposes of testing as of December 31, 2020.
Recent Developments
- We agreed to extend the charter-in of the 2014-built Japanese eco supramax vessel IVS Crimson Creek for a period of 11 to 13 months commencing April 1, 2021.
- As of February 22, 2021, we have contracted the following TCE per day(1)(2)(3):
- Handysize: approximately 1,425 operating days at an average TCE per day of approximately
$10,545 ; - Supramax/ultramax: approximately 2,241 operating days at an average TCE per day of approximately
$12,540 ; and - Tankers: approximately 165 operating days at an average TCE per day of approximately
$11,757 (4).
- Handysize: approximately 1,425 operating days at an average TCE per day of approximately
(1) Our segment results include the proportionate share of our joint ventures, which differs from the consolidated statements of profit or loss in our unaudited condensed consolidated financial statements, which account for our investments in joint ventures under the equity method.
(2) TCE per day is a non-GAAP financial measure. For the definition of this non-GAAP financial measure and the reconciliation of this measure to the most directly comparable financial measure calculated and presented in accordance with GAAP, please refer to the definitions and reconciliations in “Non-GAAP Financial Measures” at the end of this press release.
(3) Operating days are the number of available days in the relevant period a vessel is controlled by us after subtracting the aggregate number of days that the vessel is off-hire due to a reason other than scheduled drydocking and special surveys, including unforeseen circumstances. We use operating days to measure the aggregate number of days in a relevant period during which vessels are actually available to generate revenue.
(4) Excludes Matuku. We have combined the guidance for our tanker segment as we have only two medium range tankers (excluding Matuku) and one small tanker trading spot.
CEO Commentary
Martyn Wade, the Chief Executive Officer of Grindrod Shipping, commented:
“During the second half of 2020, our focus has been on navigating the continued market effects of the COVID-19 pandemic while completing the streamlining of our corporate structure and taking advantage of favorable refinancing opportunities. Despite the extensive operational challenges caused by the pandemic and the exceptionally weak drybulk markets, we managed to continue our commercial outperformance.
“With the consummation of the IVS Bulk transaction during the first half of 2020 and the disposal of the IVS Triview in November 2020, we completed the streamlining of our corporate structure. All owned vessels are currently consolidated compared to 19 vessels held in unconsolidated joint ventures in June 2018 when we initially went public.
“We further modernized our drybulk fleet with the delivery of two Japanese newbuild ultramax eco vessels, the IVS Pebble Beach and the IVS Atsugi under long-term charters-in with purchase options while disposing of two older handysize vessels.
“Leveraging our long-standing relationships with leading Japanese industry participants, in December 2020 we concluded a sale and lease back transaction under attractive terms for one of our product tankers. This transaction enabled us to refinance an impending maturity and repay early
“Overall, despite the negative market impact of COVID-19 on our markets and the shipping industry broadly, 2020 has been a transformational year for our company and positions us to look ahead with cautious optimism. The first quarter of 2021 has started in a positive way and we expect dry bulk fundamentals to continue improving. As the world transitions out of the pandemic, demand is increasing and is being further aided by stimulus packages around the world. At the same time, the historically low orderbook and the expected impact of new environmental regulations limit ship supply, creating the potential for a tighter balance with demand. In this environment, we believe that Grindrod Shipping is well positioned to benefit, leveraging our competitive advantages including our modern, high quality Japanese-built eco fleet and our ability to maximize revenue through in-house commercial pools and cargo contracts.”
Results for the Six Months Ended December 31, 2020 and 2019
In comparison to the results for the second half of 2019, the results for the second half of 2020 were impacted by the additional acquisition and subsequent consolidation of IVS Bulk, the sale of vessels and the effect of the pandemic on the drybulk and tanker spot market.
Revenue was
In the drybulk business, handysize total revenue and supramax/ultramax total revenue was
In the tankers business, our medium range tankers and small tankers total revenue was
In the drybulk business, our combined handysize and supramax/ultramax operating days increased to 7,170 days for the six months ended December 31, 2020 from 6,420 days for the six months ended December 31, 2019. Comparability of the operating days for the six months ended December 31, 2020 and 2019 was affected by the consolidation of the IVS Bulk vessels from February 2020. In the tankers business our medium range tankers and small tankers operating days decreased to 556 days for the six months ended December 31, 2020 from 1,471 days for the six months ended December 31, 2019. A significant portion of both our drybulk and tankers fleets continued to be exposed to the spot markets in the second half of 2020.
Handysize TCE per day was
Medium range tankers TCE per day was
Cost of sales was
In the drybulk business, handysize segment and supramax/ultramax segment cost of sales was
The long-term charter-in costs for our supramax/ultramax fleet was
In the tankers business, medium range tankers and small tankers cost of sales were
During this period, 368 of the 378 operating days in the medium range segment were fulfilled with owned vessels. We did not have any long-term or short-term chartered-in small tanker vessels during this period.
Gross profit was
Other operating expense was
Administrative expense was
Share of income of joint ventures was
Impairment loss recognized on financial assets was
Interest income was
Interest expense was
Income tax for the six months ended December 31, 2020 was
Loss for the six months ended December 31, 2020 was
Loss attributable to the owners of the Company for the six months ended December 31, 2020 was
Results for the Full Years Ended December 31, 2020 and 2019
Our results for the 12 months ended December 31, 2020 relative to the 12 months ended December 31, 2019 were impacted by the additional acquisition and subsequent consolidation of IVS Bulk, the sale of vessels and the effect of the pandemic on the drybulk and tanker spot market.
Revenue was
In the drybulk business, handysize total revenues and supramax/ultramax total revenues were
In the tankers business, our medium range tankers and small tankers total revenues were
In the drybulk business, our combined handysize and supramax/ultramax operating days increased to 14,110 days in the 12 months ended December 31, 2020 from 12,953 days for the 12 months ended December 31, 2019. Comparability of the operating days for the 12 months ended December 31, 2020 and 2019 was affected by the consolidation of the IVS Bulk vessels from February 2020. In the tankers business our medium range tankers and small tankers operating days decreased to 1,841 days for the 12 months ended December 31, 2020 from 3,149 days for the 12 months ended December 31, 2019. Handysize and supramax/ultramax drybulk spot market rates were generally weaker in fiscal 2020 than fiscal 2019. On the other hand, overall the medium range tanker market was generally stronger in fiscal 2020 than fiscal 2019.
Handysize TCE per day was
Medium range tankers TCE per day was
Cost of sales was
In the drybulk business, handysize segment and supramax/ultramax segment cost of sales was
The long-term charter-in costs for our supramax/ultramax fleet was
In the tankers business, medium range tankers and small tankers cost of sales were
The long-term charter-in costs for our long-term medium range tanker fleet was
Gross profit was
Other operating expense was
Administrative expense was
Share of losses of joint ventures was
Impairment loss recognized on financial assets was
Interest income was
Interest expense for the 12 months ended December 31, 2020 was
Income tax for the 12 months ended December 31, 2020 was
Loss for the 12 months ended December 31, 2020 was
Loss attributable to the owners of the Company for the 12 months ended December 31, 2020 was
Net cash flows generated from operating activities was
Net cash used in investing activities was
Net cash flows used in financing activities was
The above cash flow figures are reflected in the summarized cash flow information shown in tabular form in a subsequent section of this announcement under the heading “Unaudited Summary Statement of Cash Flows”, which reflects
Conference Call Details
Tomorrow, Thursday, February 25, 2021 at 8:00 a.m. Eastern Standard Time / 3:00 p.m. South African Standard Time / 9:00 p.m. Singapore Time, the Company's management will host a conference call and webcast to discuss the earnings results.
Participants should dial into the call 10 minutes before the scheduled time using the following numbers: +1 877 553 9962 (US Toll Free Dial In), + 0808 238 0669 (UK Toll Free Dial In), + 65 3158 5482 (Singapore Toll Free Dial In), or + 27 10 5003039 (South Africa Toll Free Dial In), + 44 (0) 2071 928592 (International Standard Dial In). Please quote “Grindrod” to the operator.
An audio replay of the conference call will be available until Thursday, March 4, 2021, by dialing +1 866 331 1332 (US Toll Free Dial In), +65 3158 3995 (Singapore Dial In), 0800 014 706 (South Africa Toll Free Dial In) or +44 (0)3333 009785 (International Standard Dial In). Please enter the access code 5589569.
Audio Webcast - Slides Presentation
There will be an audio webcast of the conference call, accessible via the internet through the Grindrod Shipping website www.grinshipping.com. Participants to the live webcast should register on the website approximately 10 minutes prior to the start of the webcast.
The slide presentation of the financial results for the second half and full year ended December 31, 2020 will be accessible in PDF format 10 minutes prior to the conference call and webcast on the Investor Relations section of our website located at www.grinshipping.com. Participants to the webcast can download the PDF presentation. The conference call will take participants through the slide presentation on the website.
About Grindrod Shipping Holdings Ltd.
Grindrod Shipping owns and operates a diversified fleet of owned and long-term and short-term chartered-in drybulk vessels and product tankers. The drybulk business, which operates under the brand “Island View Shipping” (“IVS”) includes a fleet of 15 handysize drybulk carriers and 16 supramax/ultramax drybulk carriers. The tanker business, which operates under the brand “Unicorn Shipping” (“Unicorn”) includes a fleet of three medium range tankers and one small tanker. The Company is based in Singapore, with offices in London, Durban, Tokyo, Cape Town and Rotterdam. Grindrod Shipping is listed on NASDAQ under the ticker “GRIN” and on the JSE under the ticker “GSH”.
Fleet Table
The following table sets forth certain summary information regarding our fleet as of the date of this press release:
Drybulk Carriers — Owned Fleet (23 Vessels)
| Vessel Name | Built | Country of Build | DWT | Ownership Percentage | Type of Employment | ||||||
| Handysize – Eco | |||||||||||
| IVS Tembe(2) | 2016 | Japan | 37,740 | 68.86 | % | IVS Commercial(6) | |||||
| IVS Sunbird(2) | 2015 | Japan | 33,400 | 68.86 | % | IVS Handysize Pool | |||||
| IVS Thanda(2) | 2015 | Japan | 37,720 | 68.86 | % | IVS Commercial(6) | |||||
| IVS Kestrel(2) | 2014 | Japan | 32,770 | 68.86 | % | IVS Handysize Pool | |||||
| IVS Phinda(2) | 2014 | Japan | 37,720 | 68.86 | % | IVS Commercial(6) | |||||
| IVS Sparrowhawk(2) | 2014 | Japan | 33,420 | 68.86 | % | IVS Handysize Pool | |||||
| Handysize | |||||||||||
| IVS Merlion | 2013 | China | 32,070 | 100 | % | IVS Handysize Pool | |||||
| IVS Raffles | 2013 | China | 32,050 | 100 | % | IVS Handysize Pool | |||||
| IVS Ibis | 2012 | Japan | 28,240 | 100 | % | IVS Handysize Pool | |||||
| IVS Kinglet(7) | 2011 | Japan | 33,130 | 100 | % | IVS Handysize Pool | |||||
| IVS Magpie(7) | 2011 | Japan | 28,240 | 100 | % | IVS Handysize Pool | |||||
| IVS Orchard | 2011 | China | 32,530 | 100 | % | IVS Handysize Pool | |||||
| IVS Knot(7) | 2010 | Japan | 33,140 | 100 | % | IVS Handysize Pool | |||||
| IVS Sentosa | 2010 | China | 32,700 | 100 | % | IVS Handysize Pool | |||||
| IVS Kingbird | 2007 | Japan | 32,560 | 100 | % | IVS Handysize Pool | |||||
| Supramax/Ultramax – Eco | |||||||||||
| IVS Prestwick | 2019 | Japan | 61,300 | 100 | % | IVS Supramax Pool | |||||
| IVS Okudogo | 2019 | Japan | 61,330 | 100 | % | IVS Supramax Pool | |||||
| IVS Swinley Forest(2) | 2017 | Japan | 60,490 | 68.86 | % | IVS Supramax Pool | |||||
| IVS Gleneagles(2) | 2016 | Japan | 58,070 | 68.86 | % | IVS Supramax Pool | |||||
| IVS North Berwick(2) | 2016 | Japan | 60,480 | 68.86 | % | IVS Supramax Pool | |||||
| IVS Bosch Hoek(2) | 2015 | Japan | 60,270 | 68.86 | % | IVS Supramax Pool | |||||
| IVS Hirono(2) | 2015 | Japan | 60,280 | 68.86 | % | IVS Supramax Pool | |||||
| IVS Wentworth(2) | 2015 | Japan | 58,090 | 68.86 | % | IVS Supramax Pool |
Drybulk Carriers — Long-Term Charter-In Fleet (8 Vessels)
| Vessel Name | Built | Country of Build | DWT | Charter-In Period | Type of Employment | |||||
| Supramax/Ultramax – Eco | ||||||||||
| IVS Atsugi(5) | 2020 | Japan | 62,660 | 2022-24(1) | IVS Supramax Pool | |||||
| IVS Pebble Beach(5) | 2020 | Japan | 62,660 | 2022-24(1) | IVS Supramax Pool | |||||
| IVS Phoenix | 2019 | Japan | 61,470 | 2022-24(1) | IVS Supramax Pool | |||||
| IVS Hayakita(5) | 2016 | Japan | 60,400 | 2023-26(1) | IVS Supramax Pool | |||||
| IVS Windsor | 2016 | Japan | 60,280 | 2023-26(1) | IVS Supramax Pool | |||||
| IVS Pinehurst(5) | 2015 | Philippines(3) | 57,810 | 2021-22(1) | IVS Supramax Pool | |||||
| IVS Crimson Creek | 2014 | Japan | 57,950 | 2022 | IVS Supramax Pool | |||||
| IVS Naruo(5) | 2014 | Japan | 60,030 | 2021-24(1) | IVS Supramax Pool |
Tankers – Owned Fleet (4 Vessels)
| Vessel Name | Built | Country of Build | DWT | IMO Designation | Ownership Percentage | Type of Employment | |||||||
| Medium Range Tankers – Eco | |||||||||||||
| Matuku(7) | 2016 | South Korea | 50,140 | II,III | 100 | % | Bareboat Charter (Expires 2022) | ||||||
| Leopard Moon | 2013 | South Korea | 50,000 | III | 100 | % | Vitol Commercial(4) | ||||||
| Leopard Sun | 2013 | South Korea | 50,000 | III | 100 | % | Vitol Commercial(4) | ||||||
| Small Product Tankers | |||||||||||||
| Breede | 2009 | China | 16,900 | II, III | 100 | % | Spot Market and COA | ||||||
(1) Expiration date range represents the earliest and latest redelivery periods due to extension options.
(2) Owned through IVS Bulk Pte. Ltd., a subsidiary in which we have a
(3) Constructed at Tsuneishi Cebu Shipyard, a subsidiary of Tsuneishi Shipbuilding of Japan.
(4) Our eco product tankers, other than Matuku, are commercially managed by Mansel Pte. Ltd. Mansel, an affiliate of Vitol, procures shipping for various oil cargoes traded by Vitol.
(5) Includes purchase options for Grindrod Shipping.
(6) Commercially managed by Grindrod Shipping alongside the IVS Handysize Pool.
(7) Each of IVS Knot, IVS Kinglet, IVS Magpie and Matuku have undergone separate financing arrangements in which we sold the vessel but retained the right to control the use of the vessel for a period up to 2030, 2031, 2031, and 2036 respectively, and we have an option to acquire the vessel commencing in each case in 2021 and in the case of the Matuku in 2022. We regard the vessels as owned since we have retained the right to control the use of the vessel.
Segment Results of Operations(1)
| Six months ended December 31, | Year ended December 31, | ||||||||||||||
| (In thousands of U.S. dollars) | 2020 | 2019 | 2020 | 2019 | |||||||||||
| Drybulk Carriers Business | |||||||||||||||
| Handysize Segment | |||||||||||||||
| Revenue | $ | 45,879 | $ | 53,249 | $ | 84,519 | $ | 112,232 | |||||||
| Cost of sales | (47,317 | ) | (50,975 | ) | (90,453 | ) | (111,454 | ) | |||||||
| Supramax/Ultramax Segment | |||||||||||||||
| Revenue | $ | 60,914 | $ | 83,192 | $ | 124,672 | $ | 155,155 | |||||||
| Cost of sales | (57,967 | ) | (76,102 | ) | (121,284 | ) | (148,671 | ) | |||||||
| Tanker Business | |||||||||||||||
| Medium Range Tanker Segment | |||||||||||||||
| Revenue | $ | 3,023 | $ | 17,518 | $ | 52,226 | $ | 45,165 | |||||||
| Cost of sales | (2,846 | ) | (15,388 | ) | (43,893 | ) | (39,898 | ) | |||||||
| Small Tanker Segment | |||||||||||||||
| Revenue | $ | 3,129 | $ | 5,982 | $ | 15,730 | $ | 21,899 | |||||||
| Cost of sales | (2,122 | ) | (4,478 | ) | (14,088 | ) | (18,762 | ) | |||||||
__________________
(1) Segment results of operations include the impact of the proportionate share of joint ventures, which differs from the statements of profit or loss in our condensed consolidated financial statements which account for our investments in joint ventures under the equity method.
Selected Historical and Statistical Data of Our Operating Fleet(1)
Set forth below are selected historical and statistical data of our operating fleet for the six months ended December 31, 2020 and 2019, and the 12 months ended December 31, 2020 and 2019, that we believe may be useful in better understanding our operating fleet's financial position and results of operations. This table contains certain information regarding TCE per day, which is a non-GAAP measure. For a discussion and reconciliation of these measures, see "Non-GAAP Financial Measures" at the end of this press release.
| Six months ended December 31, | Year ended December 31, | ||||||||||||||
| (In thousands of U.S. dollars) | 2020 | 2019 | 2020 | 2019 | |||||||||||
| Drybulk Carriers Business | |||||||||||||||
| Handysize Segment | |||||||||||||||
| Calendar days(2) | 3,438 | 3,189 | 6,882 | 6,495 | |||||||||||
| Available days(3) | 3,295 | 3,120 | 6,713 | 6,405 | |||||||||||
| Operating days(4) | 3,199 | 3,090 | 6,584 | 6,352 | |||||||||||
| Owned fleet operating days(5) | 2,648 | 2,205 | 5,354 | 4,546 | |||||||||||
| Long-term charter-in days(6) | - | - | - | - | |||||||||||
| Short-term charter-in days(7) | 551 | 885 | 1,230 | 1,806 | |||||||||||
| Fleet utilization(8) | 97.1 | % | 99.0 | % | 98.1 | % | 99.2 | % | |||||||
| TCE per day(9) | $ | 7,535 | $ | 8,551 | $ | 6,629 | $ | 7,770 | |||||||
| Vessel operating costs per day(10) | $ | 5,242 | $ | 5,101 | $ | 5,030 | $ | 5,040 | |||||||
| Long-term charter-in costs per day(11) | $ | - | $ | - | $ | - | $ | - | |||||||
| Supramax/Ultramax Segment | |||||||||||||||
| Calendar days(2) | 4,130 | 3,385 | 7,787 | 6,670 | |||||||||||
| Available days(3) | 4,085 | 3,346 | 7,736 | 6,626 | |||||||||||
| Operating days(4) | 3,971 | 3,330 | 7,526 | 6,601 | |||||||||||
| Owned fleet operating days(5) | 1,376 | 601 | 2,514 | 959 | |||||||||||
| Long-term charter-in days(6) | 1,134 | 1,245 | 2,261 | 2,351 | |||||||||||
| Short-term charter-in days(7) | 1,460 | 1,484 | 2,751 | 3,291 | |||||||||||
| Fleet utilization(8) | 97.2 | % | 99.5 | % | 97.3 | % | 99.6 | % | |||||||
| TCE per day(9) | $ | 10,887 | $ | 13,624 | $ | 10,072 | $ | 12,067 | |||||||
| Vessel operating costs per day(10) | $ | 5,414 | $ | 4,616 | $ | 5,073 | $ | 4,545 | |||||||
| Long-term charter-in costs per day(11) | $ | 12,003 | $ | 12,610 | $ | 12,005 | $ | 12,650 | |||||||
| Tankers Business | |||||||||||||||
| Medium Range Tankers Segment | |||||||||||||||
| Calendar days(2) | 378 | 1,104 | 1,434 | 2,253 | |||||||||||
| Available days(3) | 378 | 1,104 | 1,434 | 2,253 | |||||||||||
| Operating days(4) | 378 | 1,104 | 1,432 | 2,253 | |||||||||||
| Owned fleet operating days(5) | 368 | 736 | 1,063 | 1,523 | |||||||||||
| Long-term charter-in days(6) | 10 | 368 | 369 | 730 | |||||||||||
| Short-term charter-in days(7) | - | - | - | - | |||||||||||
| Fleet utilization(8) | 100.0 | % | 100.0 | % | 99.9 | % | 100.0 | % | |||||||
| TCE per day(9) | $ | 7,960 | $ | 14,409 | $ | 16,339 | $ | 14,341 | |||||||
| Vessel operating costs per day(10) | $ | 6,834 | $ | 6,815 | $ | 6,723 | $ | 6,691 | |||||||
| Long-term charter-in costs per day(11) | $ | 15,300 | $ | 15,300 | $ | 15,300 | $ | 15,300 | |||||||
| Small Tanker Segment | |||||||||||||||
| Calendar days(2) | 184 | 368 | 425 | 908 | |||||||||||
| Available days(3) | 184 | 368 | 425 | 897 | |||||||||||
| Operating days(4) | 178 | 367 | 409 | 896 | |||||||||||
| Owned fleet operating days(5) | 178 | 367 | 409 | 896 | |||||||||||
| Long-term charter-in days(6) | - | - | - | - | |||||||||||
| Short-term charter-in days(7) | - | - | - | - | |||||||||||
| Fleet utilization(8) | 96.7 | % | 99.7 | % | 96.2 | % | 99.9 | % | |||||||
| TCE per day(9) | $ | 13,680 | $ | 12,441 | $ | 12,374 | $ | 12,190 | |||||||
| Vessel operating costs per day(10) | $ | 6,391 | $ | 6,036 | $ | 6,384 | $ | 6,321 | |||||||
| Long-term charter-in costs per day(11) | $ | - | $ | - | $ | - | $ | - | |||||||
__________________
(1) Segment results of operations include the proportionate share of joint ventures, which differs from the statements of profit or loss in our condensed consolidated financial statements which account for our investments in joint ventures under the equity method.
(2) Calendar days: total calendar days the vessels were in our possession for the relevant period.
(3) Available days: total number of calendar days a vessel is in our possession for the relevant period after subtracting off-hire days for scheduled drydocking and special surveys. We use available days to measure the number of days in a relevant period during which vessels should be available for generating revenue.
(4) Operating days: the number of available days in the relevant period a vessel is controlled by us after subtracting the aggregate number of days that the vessel is off-hire due to a reason other than scheduled drydocking and special surveys, including unforeseen circumstances. We use operating days to measure the aggregate number of days in a relevant period during which vessels are actually available to generate revenue.
(5) Owned fleet operating days: the number of operating days in which our owned fleet is operating for the relevant period.
(6) Long-term charter-in days: the number of operating days in which our long-term charter-in fleet is operating for the relevant period. We regard chartered-in vessels as long-term charters if the period of the charter that we initially commit to is 12 months or more. Once we have included such chartered-in vessels in our fleet, we will continue to regard them as part of our fleet until the end of their chartered-in period, including any period that the charter has been extended under an option, even if at a given time the remaining period of their charter may be less than 12 months.
(7) Short-term charter-in days: the number of operating days for which we have chartered-in third party vessels for durations of less than one year for the relevant period.
(8) Fleet utilization: the percentage of time that vessels are available for generating revenue, determined by dividing the number of operating days during a relevant period by the number of available days during that period. We use fleet utilization to measure a company’s efficiency in technically managing its vessels.
(9) TCE per day: vessel revenue less voyage expenses during a relevant period divided by the number of operating days during the period. The number of operating days used to calculate TCE revenue per day includes the proportionate share of our joint ventures’ operating days and includes charter-in days. See “Non-GAAP Financial Measures” at the end of this press release for a discussion of TCE revenue and a reconciliation of TCE revenue to revenue.
(10) Vessel operating costs per day: Vessel operating costs per day represents vessel operating costs divided by the number of calendar days for owned vessels. The vessel operating costs and the number of calendar days used to calculate vessel operating costs per day includes the proportionate share of our joint ventures’ calendar day and excludes charter-in costs and charter-in days. See “Non-GAAP Financial Measures” at the end of this press release for a discussion of vessel operating costs per day.
(11) Long-term charter-in costs per day: Charter costs relating to long-term chartered-in vessels divided by long-term charter-in days for the relevant period. See “Non-GAAP Financial Measures” at the end of this press release for a discussion of long-term charter-in costs and its reconciliation to Adjusted charter hire costs.
The average long-term charter-in costs per day for the supramax/ultramax fleet for the first half of 2021 is expected to be approximately
Comparability of the operating days was affected by the consolidation of the IVS Bulk vessels from February 2020.
Unaudited Condensed Consolidated Statement of Financial Position
| (In thousands of U.S. dollars) | 31 December 2020 | 31 December 2019 | ||||
| ASSETS | ||||||
| Current assets | ||||||
| Cash and bank balances | 41,261 | 35,553 | ||||
| Trade receivables | 7,928 | 13,173 | ||||
| Contract assets | 900 | 3,844 | ||||
| Other receivables and prepayments | 18,740 | 16,951 | ||||
| Due from joint ventures | 1 | 3,855 | ||||
| Loans to joint ventures | 798 | 1,037 | ||||
| Derivative financial instruments | 458 | 173 | ||||
| Inventories | 8,700 | 12,236 | ||||
| 78,786 | 86,822 | |||||
| Assets classified as held for sale | 3,825 | 4,677 | ||||
| Total current assets | 82,611 | 91,499 | ||||
| Non-current assets | ||||||
| Restricted cash | 9,304 | 9,611 | ||||
| Loans to joint ventures | - | 2,627 | ||||
| Ships, property, plant and equipment | 475,303 | 305,197 | ||||
| Right-of-use assets | 49,062 | 55,238 | ||||
| Interest in joint ventures | 166 | 52,475 | ||||
| Intangible assets | 405 | 177 | ||||
| Goodwill | 960 | 944 | ||||
| Other investments | 3,150 | - | ||||
| Deferred tax assets | 1,138 | 1,299 | ||||
| Total non-current assets | 539,488 | 427,568 | ||||
| Total assets | 622,099 | 519,067 | ||||
| LIABILITIES AND EQUITY | ||||||
| Current liabilities | ||||||
| Trade and other payables | 27,355 | 28,327 | ||||
| Contract liabilities | 5,094 | 4,080 | ||||
| Due to related parties | - | 4,796 | ||||
| Lease liabilities | 28,120 | 24,300 | ||||
| Bank loans and other borrowings | 53,394 | 20,696 | ||||
| Provisions | 80 | 959 | ||||
| Income tax payable | 3,350 | 3,096 | ||||
| 117,393 | 86,254 | |||||
| Liabilities directly associated with assets classified as held for sale | 508 | 538 | ||||
| Total current liabilities | 117,901 | 86,792 | ||||
Unaudited Condensed Consolidated Statement of Financial Position (cont’d)
| (In thousands of U.S. dollars) | 31 December 2020 | 31 December 2019 | ||||
| Non-current liabilities | ||||||
| Trade and other payables | 198 | 221 | ||||
| Lease liabilities | 23,124 | 33,646 | ||||
| Bank loans and other borrowings | 225,038 | 144,548 | ||||
| Retirement benefit obligation | 1,819 | 1,922 | ||||
| Total non-current liabilities | 250,179 | 180,337 | ||||
| Capital and reserves | ||||||
| Share capital | 320,683 | 320,683 | ||||
| Other equity and reserves | (23,078 | ) | (18,176 | ) | ||
| Accumulated losses | (85,368 | ) | (50,569 | ) | ||
| Equity attributable to owners of the Company | 212,237 | 251,938 | ||||
| Non-controlling interests | 41,782 | - | ||||
| Total equity | 254,019 | 251,938 | ||||
| Total equity and liabilities | 622,099 | 519,067 | ||||
Unaudited Condensed Consolidated Statement of Profit or Loss
| Six months ended December 31, | Twelve months ended December 31, | ||||||||||||||
| (In thousands of U.S. dollars, other than per share data) | 2020 | 2019 | 2020 | 2019 | |||||||||||
| Revenue | $ | 112,072 | 163,826 | $ | 279,217 | $ | 331,046 | ||||||||
| Cost of sales | |||||||||||||||
| Voyage expenses | (31,030 | ) | (75,062 | ) | (83,441 | ) | (149,444 | ) | |||||||
| Vessel operating costs | (25,225 | ) | (17,140 | ) | (47,477 | ) | (33,889 | ) | |||||||
| Charter hire costs | (18,687 | ) | (30,919 | ) | (38,220 | ) | (61,668 | ) | |||||||
| Depreciation of ships, drydocking and plant and equipment– owned assets | (12,116 | ) | (9,033 | ) | (23,849 | ) | (17,529 | ) | |||||||
| Depreciation of ships and ship equipment – right-of-use assets | (13,077 | ) | (16,628 | ) | (26,413 | ) | (30,449 | ) | |||||||
| Other expenses | (375 | ) | (345 | ) | (980 | ) | (697 | ) | |||||||
| Cost of ship sale | (5,369 | ) | (105 | ) | (43,731 | ) | (16,844 | ) | |||||||
| Gross profit | 6,193 | 14,594 | 15,106 | 20,526 | |||||||||||
| Other operating expense | (13,907 | ) | (18,757 | ) | (11,734 | ) | (23,559 | ) | |||||||
| Administrative expense | (12,388 | ) | (15,099 | ) | (24,608 | ) | (28,412 | ) | |||||||
| Share of income (losses) of joint ventures | 1,593 | 118 | (945 | ) | (1,420 | ) | |||||||||
| Impairment loss recognized on financial assets | (1,823 | ) | - | (1,823 | ) | - | |||||||||
| Interest income | 116 | 764 | 565 | 1,979 | |||||||||||
| Interest expense | (8,304 | ) | (6,101 | ) | (16,938 | ) | (11,916 | ) | |||||||
| Loss before taxation | (28,520 | ) | (24,481 | ) | (40,377 | ) | (42,802 | ) | |||||||
| Income tax | (269 | ) | (52 | ) | (723 | ) | (685 | ) | |||||||
| Loss for the period | (28,789 | ) | (24,533 | ) | (41,100 | ) | (43,487 | ) | |||||||
| Loss for the period attributable to: | |||||||||||||||
| Owners of the Company | (28,300 | ) | (24,533 | ) | (38,795 | ) | (43,487 | ) | |||||||
| Non-controlling interests | (489 | ) | - | (2,305 | ) | - | |||||||||
| (28,789 | ) | (24,533 | ) | (41,100 | ) | (43,487 | ) | ||||||||
| Loss per share attributable to owners of the Company: | |||||||||||||||
| Weighted average number of shares on which the per share figures have been calculated | 19,006,858 | 18,982,168 | 18,966,414 | 19,022,665 | |||||||||||
| - Basic and diluted | $ | (1.49 | ) | $ | (1.29 | ) | $ | (2.05 | ) | $ | (2.29 | ) | |||
Unaudited Summary Statement of Cash Flows
The following table presents an unaudited summary statement of cash flows for each of the years ended December 31, 2020 and 2019:
| Year ended December 31, | ||||||||
| (In thousands of U.S. dollars) | 2020 | 2019 | ||||||
| Net cash flows generated from (used in) operating activities | $ | 70,384 | $ | (55,587 | ) | |||
| Net cash (used in) generated from investing activities | (22,559 | ) | 35,025 | |||||
| Net cash flows (used in) generated from financing activities | (41,983 | ) | 19,373 | |||||
| Net increase (decrease) in cash and cash equivalents | 5,842 | (1,189 | ) | |||||
| Cash and cash equivalents, beginning of period | 32,386 | 33,498 | ||||||
| Effect of exchange rate changes on the balance of cash held in foreign currencies | (286 | ) | 77 | |||||
| Cash and cash equivalents, end of period | 37,942 | 32,386 | ||||||
Non-GAAP Financial Measures
The financial information included in this press release includes certain ‘‘non-GAAP financial measures’’ as such term is defined in SEC regulations governing the use of non-GAAP financial measures. Generally, a non-GAAP financial measure is a numerical measure of a company’s operating performance, financial position or cash flows that excludes or includes amounts that are included in, or excluded from, the most directly comparable measure calculated and presented in accordance with IFRS. For example, non-GAAP financial measures may exclude the impact of certain unique and/or non-operating items such as acquisitions, divestitures, restructuring charges, large write-offs or items outside of management’s control. Management believes that the non-GAAP financial measures described below provide investors and analysts useful insight into our financial position and operating performance.
TCE Revenue and TCE per day.
TCE revenue is defined as vessel revenue less voyage expenses. Such TCE revenue, divided by the number of our operating days during the period, is TCE per day. Vessel revenue and voyage expenses as reported for our operating segments include a proportionate share of vessel revenue and voyage expenses attributable to our joint ventures based on our proportionate ownership of the joint ventures for the period the joint venture existed during the relevant period. The number of operating days used to calculate TCE per day also includes the proportionate share of our joint ventures’ operating days for the period the joint venture existed during the relevant period and also includes charter-in days.
TCE per day is a common shipping industry performance measure used primarily to compare daily earnings generated by vessels on time charters with daily earnings generated by vessels on voyage charters, because charter hire rates for vessels on voyage charters have to cover voyage expenses and are generally not expressed in per-day amounts while charter hire rates for vessels on time charters do not cover voyage expenses and generally are expressed in per day amounts.
Below is a reconciliation from TCE revenue to revenue for the six month periods to December 31, 2020 and 2019:
| Six months ended December 31, | ||||||||||||||||||
| 2020 | 2019 | |||||||||||||||||
| (In thousands of U.S. dollars) | Revenue | Voyage Expenses | TCE Revenue | Revenue | Voyage Expenses | TCE Revenue | ||||||||||||
| Vessel Revenue | ||||||||||||||||||
| Handysize | 36,368 | (12,264 | ) | 24,104 | 52,577 | (26,153 | ) | 26,424 | ||||||||||
| Supramax/ultramax | 60,787 | (17,556 | ) | 43,231 | 82,536 | (37,168 | ) | 45,368 | ||||||||||
| Medium range tankers | 3,023 | (14 | ) | 3,009 | 17,519 | (1,611 | ) | 15,908 | ||||||||||
| Small tankers | 3,129 | (694 | ) | 2,435 | 5,982 | (1,416 | ) | 4,566 | ||||||||||
| Other drybulk carriers | 100 | - | ||||||||||||||||
| Other tankers | 2,649 | 2,613 | ||||||||||||||||
| Ship sale revenue | 5,178 | - | ||||||||||||||||
| Other revenue | 854 | 2,993 | ||||||||||||||||
| Adjustments* | (16 | ) | (394 | ) | ||||||||||||||
| Revenue | 112,072 | 163,826 | ||||||||||||||||
Below is a reconciliation from TCE revenue to revenue for the 12 month periods to December 31, 2020 and 2019:
| Twelve months ended December 31, | ||||||||||||||||||
| 2020 | 2019 | |||||||||||||||||
| (In thousands of U.S. dollars) | Revenue | Voyage Expenses | TCE Revenue | Revenue | Voyage Expenses | TCE Revenue | ||||||||||||
| Vessel Revenue | ||||||||||||||||||
| Handysize | 74,641 | (30,995 | ) | 43,646 | 102,805 | (53,449 | ) | 49,356 | ||||||||||
| Supramax/ultramax | 124,352 | (48,547 | ) | 75,805 | 153,937 | (74,286 | ) | 79,651 | ||||||||||
| Medium range tankers | 23,412 | (15 | ) | 23,397 | 37,813 | (5,502 | ) | 32,311 | ||||||||||
| Small tankers | 6,647 | (1,586 | ) | 5,061 | 13,419 | (2,497 | ) | 10,922 | ||||||||||
| Other drybulk carriers | 222 | - | ||||||||||||||||
| Other tankers | 5,241 | 5,182 | ||||||||||||||||
| Ship sale revenue | 43,075 | 16,546 | ||||||||||||||||
| Other revenue | 2,105 | 5,989 | ||||||||||||||||
| Adjustments* | (478 | ) | (4,645 | ) | ||||||||||||||
| Revenue | 279,217 | 331,046 | ||||||||||||||||
__________________
* Vessel revenue earned and voyage expenses incurred by the joint ventures are included within the operating segment information on a proportionate consolidated basis. Accordingly, joint ventures’ proportionate financial information are adjusted out to reconcile to the unaudited condensed consolidated financial statements.
Vessel operating costs per day.
Vessel operating costs per day represents vessel operating costs divided by the number of calendar days for owned vessels during the period. The vessel operating costs and the number of calendar days used to calculate vessel operating costs per day includes the proportionate share of our joint ventures’ vessel operating costs and calendar days for the period the joint venture existed during the relevant period and excludes charter-in costs and charter-in days.
Vessel operating costs per day is a non-GAAP performance measure commonly used in the shipping industry to provide an understanding of the daily technical management costs relating to the running of owned vessels.
Long-term charter-in costs and Long-term charter-in costs per day.
Long-term charter-in costs is defined as the charter costs relating to chartered-in vessels included in our Fleet from time to time, which are vessels for which the period of the charter that we initially commit to is 12 months or more, even if at a given time the remaining period of their charter may be less than 12 months (“long-term charter-in vessels”). Such long-term charter-in costs, divided by the number of operating days for the relevant vessels during the period, is long-term charter-in costs per day.
From January 1, 2019, charter hire costs in the statement of profit and loss only includes charter costs that meet the definition of short-term leases in terms of IFRS 16 which, due to practical expedients allowed under IFRS 16, for the period from January 1, 2019 to December 31, 2019 includes charter costs relating to some but not all of our long-term charter-in vessels, with the charter costs relating to the remainder of our long-term charter-in vessels presented as lease payments on ships. Accordingly, charter hire costs and lease payments on ships together comprise “adjusted charter hire costs”.
Long-term charter-in costs and long-term charter-in costs per day are non-GAAP performance measures used primarily to provide an understanding of the total costs and total costs per day relating to the charter-in of the company’s long-term chartered-in vessels.
Below is a reconciliation from long-term charter-in costs to Adjusted charter hire costs for the six month periods to December 31, 2020 and 2019.
| Six months ended December 31, | |||||||||||||||||
| 2020 | |||||||||||||||||
| (In thousands of U.S. dollars) | Charter hire costs | Lease payments on Ships | Adjusted charter hire costs | Long-term charter-in costs | Short-term charter-in costs | Adjusted charter hire costs | |||||||||||
| Handysize | 3,976 | - | 3,976 | - | 3,976 | 3,976 | |||||||||||
| Supramax/ultramax | 14,558 | 14,344 | 28,902 | 13,612 | 15,290 | 28,902 | |||||||||||
| Medium range tankers | 153 | - | 153 | 153 | - | 153 | |||||||||||
| Small tankers | - | - | - | - | - | - | |||||||||||
| Others | - | - | - | - | |||||||||||||
| Adjustments(*) | - | - | - | - | |||||||||||||
| 18,687 | 14,344 | 33,031 | 33,031 | ||||||||||||||
| Six months ended December 31, | |||||||||||||||||
| 2019 | |||||||||||||||||
| (In thousands of U.S. dollars) | Charter hire costs | Lease payments on Ships | Adjusted charter hire costs | Long-term charter-in costs | Short-term charter-in costs | Adjusted charter hire costs | |||||||||||
| Handysize | 8,009 | - | 8,009 | - | 8,009 | 8,009 | |||||||||||
| Supramax/ultramax | 20,064 | 15,015 | 35,079 | 15,697 | 19,382 | 35,079 | |||||||||||
| Medium range tankers | 2,812 | 2,816 | 5,628 | 5,628 | - | 5,628 | |||||||||||
| Small tankers | - | - | - | - | - | - | |||||||||||
| Others | - | - | - | - | |||||||||||||
| Adjustments(*) | 34 | - | 34 | 34 | |||||||||||||
| 30,919 | 17,831 | 48,750 | 48,750 | ||||||||||||||
__________________
* Charter hire costs, Lease payments on Ships, Long-term charter-in costs and Short-term charter-in costs incurred by the joint ventures are included within the operating segment information on a proportionate consolidation basis. Accordingly, joint ventures’ proportionate financial information are adjusted out to reconcile to the unaudited condensed consolidated financial statements.
Below is a reconciliation from long-term charter-in costs to Adjusted charter hire costs for the 12 month periods to December 31, 2020 and 2019.
| Twelve months ended December 31, | |||||||||||||||||
| 2020 | |||||||||||||||||
| (In thousands of U.S. dollars) | Charter hire costs | Lease payments on Ships | Adjusted charter hire costs | Long-term charter-in costs | Short-term charter-in costs | Adjusted charter hire costs | |||||||||||
| Handysize | 8,827 | - | 8,827 | - | 8,827 | 8,827 | |||||||||||
| Supramax/ultramax | 25,541 | 27,388 | 52,929 | 27,143 | 25,786 | 52,929 | |||||||||||
| Medium range tankers | 3,851 | 1,795 | 5,646 | 5,646 | - | 5,646 | |||||||||||
| Small tankers | - | - | - | - | - | - | |||||||||||
| Others | - | - | - | - | |||||||||||||
| Adjustments(*) | - | - | - | - | |||||||||||||
| 38,219 | 29,183 | 67,402 | 67,402 | ||||||||||||||
| Twelve months ended December 31, | ||||||||||||||||||||
| 2019 | ||||||||||||||||||||
| (In thousands of U.S. dollars) | Charter hire costs | Lease payments on Ships | Adjusted charter hire costs | Long-term charter-in costs | Short-term charter-in costs | Adjusted charter hire costs | ||||||||||||||
| Handysize | 15,162 | - | 15,162 | - | 15,162 | 15,162 | ||||||||||||||
| Supramax/ultramax | 41,393 | 26,953 | 68,346 | 29,738 | 38,608 | 68,346 | ||||||||||||||
| Medium range tankers | 5,581 | 5,585 | 11,166 | 11,166 | - | 11,166 | ||||||||||||||
| Small tankers | - | - | - | - | - | - | ||||||||||||||
| Others | - | - | - | - | ||||||||||||||||
| Adjustments(*) | (468 | ) | - | (468 | ) | (468 | ) | |||||||||||||
| 61,668 | 32,538 | 94,206 | 94,206 | |||||||||||||||||
__________________
* Charter hire costs, Lease payments on Ships, Long-term charter-in costs and Short-term charter-in costs incurred by the joint ventures are included within the operating segment information on a proportionate consolidation basis. Accordingly, joint ventures’ proportionate financial information are adjusted out to reconcile to the unaudited condensed consolidated financial statements.
EBITDA and Adjusted EBITDA.
EBITDA is defined as earnings before income tax, interest income, interest expense, share of income/(losses) of joint ventures and depreciation and amortization. For periods commencing January 1, 2019, interest expense and depreciation and amortization include amounts relating to leases and classified, as appropriate, as interest expense or depreciation – right of use assets under the application of IFRS 16. Adjusted EBITDA is EBITDA adjusted to exclude the items set forth in the table below, which represent certain non-recurring, non-operating or other items that we believe are not indicative of the ongoing performance of our core operations.
EBITDA and Adjusted EBITDA are used by analysts in the shipping industry as common performance measures to compare results across peers. EBITDA and Adjusted EBITDA are not items recognized by IFRS, and should not be considered in isolation or used as alternatives to loss for the period or any other indicator of our operating performance.
Our presentation of EBITDA and Adjusted EBITDA is intended to supplement investors’ understanding of our operating performance by providing information regarding our ongoing performance that exclude items we believe do not directly affect our core operations and enhancing the comparability of our ongoing performance across periods. Our management considers EBITDA and Adjusted EBITDA to be useful to investors because such performance measures provide information regarding the profitability of our core operations and facilitate comparison of our operating performance to the operating performance of our peers. Additionally, our management uses EBITDA and Adjusted EBITDA as measures when reviewing our operating performance. While we believe these measures are useful to investors, the definitions of EBITDA and Adjusted EBITDA used by us may not be comparable to similar measures used by other companies.
The table below presents the reconciliation between loss for the period to EBITDA and Adjusted EBITDA for the six month period ended December 31, 2020 and the comparative period ended December 31, 2019:
| Six months ended December 31, | Twelve months ended December 31, | ||||||||||||||
| (In thousands of U.S. dollars) | 2020 | 2019 | 2020 | 2019 | |||||||||||
| Loss for the period | $ | (28,789 | ) | $ | (24,533 | ) | $ | (41,100 | ) | $ | (43,487 | ) | |||
| Adjusted for: | |||||||||||||||
| Income tax | 269 | 52 | 723 | 685 | |||||||||||
| Interest income | (116 | ) | (764 | ) | (565 | ) | (1,979 | ) | |||||||
| Interest expense | 8,304 | 6,101 | 16,938 | 11,916 | |||||||||||
| Impairment loss recognized on financial assets | 1,823 | - | 1,823 | - | |||||||||||
| Share of income (losses) of joint ventures | (1,593 | ) | (118 | ) | 945 | 1,420 | |||||||||
| Depreciation and amortization | 25,829 | 26,153 | 51,549 | 48,763 | |||||||||||
| EBITDA | 5,727 | 6,891 | 30,313 | 17,318 | |||||||||||
| Adjusted for | |||||||||||||||
| Impairment loss recognized on ships | 12,620 | 12,692 | 16,282 | 16,995 | |||||||||||
| Impairment loss recognized on right-of-use assets | - | 2,250 | - | 2,250 | |||||||||||
| Impairment loss recognized on goodwill and intangibles | - | 3,179 | - | 3,179 | |||||||||||
| Impairment loss recognized on assets in disposal group | - | - | 576 | - | |||||||||||
| Impairment loss recognized on office equipment, furniture and fittings and motor vehicles | 138 | - | 138 | - | |||||||||||
| ADJUSTED EBITDA | 18,485 | 25,012 | 47,309 | 39,742 | |||||||||||
Headline Loss and Headline Loss Per Share.
The Johannesburg Stock Exchange, or JSE, requires that we calculate and publicly disclose Headline Loss Per Share and Diluted Headline Loss Per Share. Headline Loss Per Share is calculated using net income which has been determined based on IFRS. Accordingly, this may differ to the Headline Loss Per Share calculation of other companies listed on the JSE because such companies may report their financial results under a different financial reporting framework such as U.S. GAAP.
Headline Loss for the period represents Loss for the period attributable to owners of the Company adjusted for the re-measurements that are more closely aligned to the operating or trading results as set forth below, and Headline Loss Per Share represents this figure divided by the weighted average number of ordinary shares outstanding for the period.
The table below presents a reconciliation between Loss for the period attributable to owners of the Company to Headline Loss for the six month period ended December 31, 2020 and 2019, and the 12 month period ended December 31, 2020 and 2019:
| Six months ended December 31, | Twelve months ended December 31, | ||||||||||||||
| (In thousands of U.S. dollars, other than per share data) | 2020 | 2019 | 2020 | 2019 | |||||||||||
| Reconciliation between loss for the period attributable to owners of the Company and headline loss: | |||||||||||||||
| Loss for the period attributable to owners of the Company | $ | (28,300 | ) | $ | (24,533 | ) | $ | (38,795 | ) | $ | (43,487 | ) | |||
| Adjusted for: | |||||||||||||||
| - Impairment loss recognized on ships | 12,620 | 12,692 | 16,282 | 16,995 | |||||||||||
| - Impairment loss recognized on right-of-use assets | - | 2,250 | - | 2,250 | |||||||||||
| - Impairment loss recognized on goodwill and intangibles | - | 3,179 | - | 3,179 | |||||||||||
| - Gain on disposals of plant and equipment | - | (193 | ) | - | - | ||||||||||
| - Impairment loss recognized on assets in disposal group | - | - | 576 | - | |||||||||||
| - Impairment loss recognized on office equipment, furniture and fittings and motor vehicles | 138 | - | 138 | - | |||||||||||
| Headline Loss | (15,542 | ) | (6,605 | ) | (21,799 | ) | (21,063 | ) | |||||||
| Number of shares on which the per share figures have been calculated | 19,006,858 | 18,982,168 | 18,966,414 | 19,022,665 | |||||||||||
| Basic and diluted loss per share | $ | (1.49 | ) | $ | (1.29 | ) | $ | (2.05 | ) | $ | (2.29 | ) | |||
| Basic and diluted headline loss per share | $ | (0.82 | ) | $ | (0.35 | ) | $ | (1.15 | ) | $ | (1.11 | ) | |||
Forward-Looking Statements
This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act 1995 with respect to Grindrod Shipping’s financial condition, results of operations, cash flows, business strategies, operating efficiencies, competitive position, growth opportunities, plans and objectives of management, and other matters. These forward looking statements, including, among others, those relating to our future business prospects, revenues and income, are necessarily estimates and involve a number of risks and uncertainties that could cause actual results to differ materially from those suggested by the forward-looking statements. Accordingly, these forward-looking statements should be considered in light of various important factors, including those set forth below and in our other filings with the SEC. Words such as “may,” “expects,” “intends,” “plans,” “believes,” “anticipates,” “hopes,” “estimates,” and variations of such words and similar expressions are intended to identify forward-looking statements. These forward-looking statements are based on the information available to, and the expectations and assumptions deemed reasonable by Grindrod Shipping at the time these statements were made. Although Grindrod Shipping believes that the expectations reflected in such forward-looking statements are reasonable, no assurance can be given that such expectations will prove to have been correct. These statements involve known and unknown risks and are based upon a number of assumptions and estimates which are inherently subject to significant uncertainties and contingencies, many of which are beyond the control of Grindrod Shipping. Actual results may differ materially from those expressed or implied by such forward-looking statements. Important factors that could cause actual results to differ materially from estimates or projections contained in the forward-looking statements include, without limitation, Grindrod Shipping’s future operating or financial results; the strength of world economies, including, in particular, in China and the rest of the Asia-Pacific region; the effects of the COVID-19 pandemic on our operations and the demand and trading patterns for both the drybulk and product tanker markets, and the duration of the effects; cyclicality of the drybulk and tanker markets, including general drybulk and tanker shipping market conditions and trends, including fluctuations in charter hire rates and vessel values; changes in supply and demand in the drybulk and tanker shipping industries, including the market for Grindrod Shipping’s vessels; changes in the value of Grindrod Shipping’s vessels; changes in Grindrod Shipping’s business strategy and expected capital spending or operating expenses, including drydocking, surveys, upgrades and insurance costs; competition within the drybulk and tanker industries; seasonal fluctuations within the drybulk and tanker industries; Grindrod Shipping’s ability to employ its vessels in the spot market and its ability to enter into time charters after its current charters expire; general economic conditions and conditions in the oil and coal industries; Grindrod Shipping’s ability to satisfy the technical, health, safety and compliance standards of its customers, especially major oil companies and oil producers; the failure of counterparties to our contracts to fully perform their obligations with Grindrod Shipping; Grindrod Shipping’s ability to execute its growth strategy; international political conditions including additional tariffs imposed by China and the United States;; potential disruption of shipping routes due to weather, accidents, political events, natural disasters or other catastrophic events; vessel breakdowns; corruption, piracy, military conflicts, political instability and terrorism in locations where we may operate; fluctuations in interest rates and foreign exchange rates and the uncertainty surrounding the continued existence of the London Interbank Offered Rate, or LIBOR; changes in the costs associated with owning and operating Grindrod Shipping’s vessels; changes in, and Grindrod Shipping’s compliance with, governmental, tax, environmental, health and safety regulations including the International Maritime Organization, or IMO 2020, regulations limiting sulfur content in fuels; potential liability from pending or future litigation; Grindrod Shipping’s ability to procure or have access to financing, its liquidity and the adequacy of cash flows for its operation; the continued borrowing availability under Grindrod Shipping’s debt agreements and compliance with the covenants contained therein; Grindrod Shipping’s ability to fund future capital expenditures and investments in the construction, acquisition and refurbishment of its vessels; Grindrod Shipping’s dependence on key personnel; Grindrod Shipping’s expectations regarding the availability of vessel acquisitions and its ability to buy and sell vessels and to charter-in vessels as planned or at prices we deem satisfactory; adequacy of Grindrod Shipping’s insurance coverage; effects of new technological innovation and advances in vessel design; Grindrod Shipping’s ability to realize the benefits of the separation from Grindrod Limited; Grindrod Shipping’s ability to operate as an independent entity; and the other factors set out in “Item 3. Key Information-Risk Factors” in our Annual Report on Form 20-F for the year ended December 31, 2019 filed with the Securities and Exchange Commission on June 5, 2020. Grindrod Shipping undertakes no obligation to update publicly or release any revisions to these forward-looking statements to reflect events or circumstances after the date of this press release or to reflect the occurrence of unanticipated events except as required by law.
| Company Contact: Martyn Wade / Stephen Griffiths CEO / CFO Grindrod Shipping Holdings Ltd. 200 Cantonment Road, #03-01 Southpoint Singapore, 089763 Email: ir@grindrodshipping.com Website: www.grinshipping.com | Investor Relations / Media Contact: Nicolas Bornozis / Daniela Guerrero Capital Link, Inc. 230 Park Avenue, Suite 1536 New York, N.Y. 10169 Tel.: (212) 661-7566 Fax: (212) 661-7526 Email: grindrod@capitallink.com |
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