May 25, 2022
NORDIC SHIPHOLDING A/S
VScompany announcement: 9/2022
Published via NASDAQ OMX on May 25, 2022
Q1 Rresult 2022
The comparison figures for the period ended March 31, 2022 are indicated in parentheses.
The Group’s operational performance in Q1 2022 was impacted by the sale of two of the three remaining vessels. Nordic Anne and Nordic Agnetha were delivered to their new owners in February 2022 and March 2022, respectively.
In the first quarter of 2022, average Time Charter Equivalent (“TCE”) rates continued to improve due to increased tonnage demand. The average daily rate of TCE earned in the first quarter of 2022 by vessels was 57% higher than the average daily rate of TCE earned in the first quarter of 2021.
The Group generated a profit after tax of 2.9 million USD (including the amortization of certain loan interest of 2.7 million USD on the vessels) in the first quarter of 2022, compared to a loss after tax of 1.5 million USD for the same period last year. Despite the improvement in average TCE rates in the first quarter of 2022, the shortfall related to the sale of vessels (in addition to Nordic Anne and Nordic Agnetha, Nordic Hanne and Nordic Pia were sold in April 2021) led to a decrease revenue from TCE in the first quarter of 2022, as compared to Q1 2021.
Vessel operating expenses in the first quarter of 2022 decreased to $1.7 million ($2.9 million), primarily due to the sale of the respective vessels.
EBITDA increased to $0.7 million ($0.4 million). Other external costs increased from $0.2 million to $0.5 million ($0.3 million) primarily due to legal fees related to the extension of the Group’s loan facility.
The Group recognized a reversal of previously recognized impairments on assets held for sale of USD 0.2 million in the first quarter of 2022, as certain actual additional expenses related to the sale of vessels were lower than estimated.
After taking into account amortization, depreciation, write-downs and reversals of assets held for sale, finance costs and finance income, profit after tax amounts to 2.9 million USD in Q1 2022 (loss of 1.5 million USD).
Between December 31, 2021 and March 31, 2022, shareholders’ equity improved from minus $14.3 million to minus $11.4 million due to the profit recognized during the period.
The Group is also subject to a quarterly cash transfer mechanism under which the Group, after payment of installments and interest under the loan agreement, must allocate all cash and cash equivalents of the Group in excess of 6.0 million dollars to the prepayment of the loan. There was no cash transfer in the first quarter of 2022 and in the first quarter of 2021.
During the current year, cash flow from operations was a net cash inflow of $2.4 million (net cash outflow of $0.4 million) due in part to bunker proceeds received upon delivery of the respective vessels to the new owners. The net proceeds from the sale of Nordic Anne and Nordic Agnetha were used to repay bank loans in the first quarter of 2022. Overall cash and cash equivalents improved to $4.4 million as of March 31, 2022 against 2.5 million USD as of December 31, 2021.
As announced on January 21, 2022 (Company Announcement 2/2022), the Group had entered into an agreement with the Lenders to extend the maturity of the existing bank credit facilities until March 31, 2022. With the delivery of the last vessel, Nordic Amy, to new ownership on April 1, 2022, the remaining outstanding loan balances were settled through the proceeds of the sale of Nordic Amy, internal cash and the use of USD 2.3 million under the bank guarantee issued by the majority shareholder of the Company to the lenders.
In order to support the ongoing efforts to clarify the future activities of the Group, the majority shareholder of the Company intends, if necessary, to support the Group, financially or otherwise, in the conduct of the business of the Group with a view to ensuring that the Group will be able to continue as a going concern for at least fiscal year 2022. For the avoidance of doubt, the intention does not constitute a legal obligation to provide financing or support to the Group. The majority shareholder of the Company has also agreed to extend the maturity of the shareholder loans until mid-April 2023.
The outlook for 2022 remains unchanged as reported in the 2021 Annual Report. Notwithstanding the sale of all remaining vessels, TCE’s revenues for 2022 were expected to remain in the region of $2.5-3.0 million, pending finalization pool accounts. After taking into account estimated vessel operating costs and administrative operating expenses, the Group’s expected EBITDA (earnings before interest, tax, depreciation and amortization) for 2022 would be around -0.5 million USD to 0.5 million USD, and the profit before tax, positively impacted by one-time revenues, would be between 2.0 million USD and 3.0 million USD.
For more information, please contact:
Mr. Esben Poulsson, Nordic Shipholding A/S: +45 39 29 10 00
NSH Q1 2022 Financial Announcement