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Q3 2021 result
Summary
Comparison figures for the period ended September 30, 2020 are shown in parentheses.
The Group extended its loss in the first nine months of this year as Time Charter Equivalent (“TCE”) rates continued to be depressed due to reduced tonnage demand caused in part by by the COVID-19 pandemic, associated with excessive tonnage availability in the market. The average daily TCE rate achieved in Q3 2021 and 9 months 2021 by vessels was 65% and 58% lower than the average daily TCE rate achieved in Q3 2020 and 9 months 2020, respectively.
The Group recorded an after-tax loss of $ 8.1 million (including a one-time impairment of $ 4.9 million on vessels) during 9M 2021 compared to an after-tax loss of $ 3.9 million (including a one-time loss of $ 10.7 million on ships) for the same period last year. The significant drop in TCE rates and the shortfall resulting from the sale of two vessels, Nordic Hanne and Nordic Pia, in April 2021 largely contributed to the loss incurred in 9M 2021.
Expenses related to vessel operations in 9M 2021 decreased to USD 7.0 million (USD 8.6 million) mainly due to the sale of Nordic Hanne and Nordic Pia in April 2021.
EBITDA decreased significantly to $ 0.5 million ($ 14.2 million) due to lower TCE revenue generated in 9M 2021. Other external costs remained unchanged at $ 1.0 million ( 1.0 million USD).
As reported in Company Announcement 12/2021, previous attempts to find a suitable merger partner have not materialized. The Board is currently in discussion with the various stakeholders of the Group to ensure the proper liquidation of the Group in a responsible manner. In accordance with the agreement with the lenders, the remaining three vessels are to be sold in an orderly fashion. Thus, the Group recognized an impairment loss of $ 4.5 million in the second quarter of 2021 following the classification of the three remaining vessels, Nordic Agnetha, Nordic Amy and Nordic Anne, as assets held for sale. As of 9M 2020, a total impairment loss of USD 10.7 million has been recorded on the vessels. Due to the volatility of the market, it should be noted that the estimate of the expected sale value of the remaining vessels is very uncertain.
The Group recognized a new impairment loss of US $ 0.4 million in 9M 2021 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 accounting for depreciation, impairment, interest and other finance charges, the after-tax loss was US $ 8.1 million in 9M 2021 (loss of US $ 3.9 million).
Between December 31, 2020 and September 30, 2021, equity fell from minus $ 8.5 million to minus $ 16.7 million due to the cumulative loss incurred during the period.
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 cash and cash equivalents of the Group in excess of USD 6.0 million to early repayment of the loan. There was no cash transfer during 9M 2021 (a cash transfer of $ 13.3 million was used to repay the loan during 9M 2020).
During the year under review, cash flow from operations was a net outflow of $ 0.8 million (net inflow of $ 14.1 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 during 9M 2021. As a result, cash and cash equivalents have been reduced to $ 2.1 million as at September 30, 2021 from $ 5.4 million as at December 31, 2020.
As the Group enters the new phase of liquidation of its activities, the Chairman of the Board of Directors, Mr. Knud Pontoppidan and an independent director of the Company, Mr. Jens V. Mathiasen have stepped down from the Board of Directors of the Company with effect from October 14, 2021. in accordance with the Company’s announcement 14/2021 of October 14, 2021. Mr. Esben Poulsson, independent director of the Company, was appointed on the same day as the new Chairman of the Board of administration of the Company.
The outlook for 2021 remains unchanged, as reported in the company announcement 15/2021 on November 23, 2021. TCE’s revenue for 2021 is expected to be in the range of $ 8.5 million to $ 10.5 million. millions of dollars. After taking into account operating expenses budgeted by the respective technical managers, the Group’s EBITDA (earnings before interest, taxes, depreciation and amortization) for 2021 is expected to be between -1.0 million USD and 1.0 million USD. . The pre-tax profit is estimated at -9.5 million USD – -7.5 million USD.
Source: Nordic Shipholding A / S
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