3rd Quarter & 9 Mths Results
16 Novembro 2001 - 7:56AM
UK Regulatory
RNS Number:1666N
Bergesen d.y. ASA
15 November 2001
BERGESEN D.Y. GROUP
Nine-month interim report 2001
Nine months Third Quarter Full year
INCOME STATEMENT 2001 2000 2001 2000 2000
(Unaudited figures in USD million)
Operating revenue 614.3 526.0 167.1 194.5 737.1
Voyage expenses -128.7 -130.4 -40.5 -45.4 -180.0
T/C (time charter) income 485.6 395.6 126.6 149.1 557.1
Other operating expenses -209.8 -216.3 -69.9 -73 -278.8
Provision for severance
payments 0.0 -7.6 0.0 0.0 -4.9
Gains/losses on sale of vessels 62.0 15.7 42.8 -0.2 18.9
Operating profit before
depreciation 337.8 187.4 99.5 75.9 292.3
Depreciation -90.7 -76.9 -29.4 -25.4 -103.8
Operating profit 247.1 110.5 70.1 50.5 188.5
Interest income 16.3 16.8 5.0 6.5 24.0
Interest expenses -30.7 -32.8 -6.7 -11.2 -40.9
Gains/losses on sale of
securities -0.1 2.1 0.0 2.1 -22.7
Write-down of shares -18.9 -24.3 -8.6 0.0 0.0
Foreign exchange gains/losses -2.6 -53.1 9.4 -36.1 -38.3
Dividend income and other
financial 0.8 2.1 -1.0 0.4 1.9
Gains/losses on sale of
property 0.0 0.9 0.0 0.9 3.9
Profit before tax 211.9 22.2 68.2 13.1 116.4
Tax -0.5 0.9 0.0 1.0 0.4
Profit after tax 211.4 23.1 68.2 14.1 116.8
Minority interests 8.3 3.0 1.1 0.9 6.2
Profit after minority
interests 203.1 20.1 67.1 13.2 110.6
Earnings per share 3.35 0.33 1.09 0.20 1.68
Cash flow per share 4.79 1.43 1.57 0.56 3.17
Average number of shares 63,071,424 70,019,056 62,256,332 70,019,056 69,689,936
BALANCE SHEET 30/9/01 30/9/00 31/12/00
(Unaudited figures in
USD million)
ASSETS
Intangible fixed assets 1 1 1
Vessels 1,604 1,531 1,678
Vessels under construction 170 203 167
Other tangible fixed assets 46 47 47
Financial fixed assets 58 55 50
Total fixed assets 1,879 1,837 1,943
Inventories 14 15 14
Receivables 60 196 91
Investments 53 59 66
Bank deposits, cash etc 216 236 281
Total current assets 343 506 452
Total assets 2,222 2,343 2,395
BALANCE SHEET 30/9/01 30/9/00 31/12/00
(Unaudited figures in
USD million)
EQUITY AND LIABILITIES
Paid-in capital 287 289 287
Retained earnings 1,185 1,089 1,049
Minority interests 62 58 63
Total equity 1,534 1,436 1,399
Provisions for liabilities 23 22 21
Other long-term liabilities 557 775 819
Current liabilities 108 110 156
Total liabilities and provisions 688 907 996
Total liabilities and equity 2,222 2,343 2,395
RESULTS
The Bergesen group recorded nine-month operating profit of USD 247.1 million, a
major increase from USD 110.5 million last year. This year's figure includes
capital gains of USD 62 million on the sale of vessels, compared with USD 15.7
million last year. Operating profit for the third quarter was USD 70.1
million, compared with USD 50.5 million last year.
The fleet generated T/C income of USD 485.6 million, compared with USD 395.6
million last year.
The accounts show net financial expenses of USD 35.2 million, including foreign
exchange losses of USD 2.6 million and a write-down of shares of USD 18.9
million. The USD exchange rate was NOK 8.85 at the beginning of the year and NOK
8.88 at the end of third quarter. The average USD exchange rate was NOK 9.02
during the period.
Profit before tax came to USD 211.9 million, compared with USD 22.2 million last
year.
The accounts for the first half of 2001 have been prepared using the same
accounting policies as the annual accounts for the year 2000.
VALUE-ADJUSTED EQUITY
Allowing for share buybacks, the group's value-adjusted equity before tax was
USD 27.45 (NOK 244) per share at the end of the period (after the distribution
of a dividend of NOK 5 in May), compared with USD 27.10 (NOK 240) at the
beginning of the year (before the distribution of this dividend).
The value of the Bergesen fleet in USD terms fell 10.8% during the period (gas
-8.3%, tankers -14.5%, dry bulk -10.6% and offshore -3.7%) to USD 1,694 million
(gas USD 959 million, tankers USD 508 million, dry bulk USD 106 million and
offshore USD 122 million), including USD 70 million attributable to
minority interests. The market value of vessels under construction was USD 76
million over their book value. These market values are based on the average
estimates for charter-free vessels obtained from three independent brokers,
except for the offshore fleet where the company's own estimates have also had to
be used on account of the vessels' high degree of specialisation. Vessels sold
but not yet handed over have been valued at the price for which they were sold.
FLEET REPORT
The operation of the fleet ran smoothly in the third quarter. Nine vessels were
dry-docked for scheduled maintenance.
BREAKDOWN BY FLEET
NINE MONTHS (1/1-30/9) GAS TANKERS DRY BULK OFFSHORE TOTAL
(Unaudited figures in
USD million) 2001 2000 2001 2000 2001 2000 2001 2000 2001 2000
Operating revenue 307.7 275.6 222.1 186.1 44.3 42.7 40.2 21.7 614.3 526.0
Voyage expenses -65.8 -59.7 -43.7 -51.0 -13,9 -13.2 -5.3 -6.6 -128.7 -130.4
T/C (time charter)
income 241.9 215.9 178.4 135.1 30.4 29.5 34.9 15.1 485.6 395.6
Operating expenses -123.3-123.5 -58.7 -64.7 -10.3 -10.9 -13.1 -6.8 -205.4 -205.9
Charter hire expenses 0.0 0.0 0.0 0.0 -4.4 -10.4 0.0 0.0 -4.4 -10.4
Provision for
severance payments 0.0 -5.9 0.0 -1.6 0.0 -0.1 0.0 0.0 0.0 -7.6
Gains/losses on sale
of vessels 7.2 -0.1 54.8 15.8 0.0 0.0 0.0 0.0 62.0 15.7
Operating profit
before 125.8 86.4 174.5 84.6 15.7 8.1 21.8 8.3 337.8 187.4
Depreciation -44.7 -43.0 -28.3 -24.9 -6.8 -6.0 -10.8 -3.0 -90.7 -76.9
Operating profit 81.1 43.4 146.2 59.7 8.9 2.1 11.0 5.3 247.1 110.5
Minority interests 8.8 4.7 0.0 0.2 0.0 0.0 0.2 -0.1 8.0 4.8
T/C income per
day/month* 540* 480* 33.7 26.0 21.7 20.8 - - 23.3 18.9
(USD 1,000)
THIRD QUARTER (1/7-30/9) GAS TANKERS DRY BULK OFFSHORE TOTAL
(Unaudited figures in
USD million) 2001 2000 2001 2000 2001 2000 2001 2000 2001 2000
Operating revenue 85.7 92.5 54.7 78.9 14.3 15.8 12.4 7.3 167.1 194.5
Voyage expenses -19.1 -21.6 -15.5 -17.2 -4.3 -4.2 -1.6 -2.4 -40.6 -45.4
T/C (time charter)
income 66.6 70.9 39.2 61.7 10.0 11.6 10.8 4.9 126.6 149.1
Operating expenses -42.7 -41.1 -17.4 -19.6 -3.4 -4.4 -4.8 -2.4 -68.3 -67.5
Charter hire expenses 0.0 0.0 0.0 0.0 -1.6 -5.5 0.0 0.0 -1.6 -5.5
Provision for
severance payments 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
Gains/losses on sale
of vessels 0.0 0.0 42.8 -0.2 0.0 0.0 0.0 0.0 42.8 -0.2
Operating profit
before 23.9 29.8 64.6 41.9 5.0 1.7 6.0 2.5 99.5 75.9
Depreciation -15.1 -13.8 -8.6 -8.6 -2.2 -2.0 -3.4 -1.0 -29.4 -25.4
Operating profit 8.8 16.0 56.0 33.3 2.8 -0.3 2.6 1.5 70.1 50.5
Minority interests 0.9 1.5 0.0 0.0 0.0 0.0 0.1 -0.1 1.0 1.4
T/C income per
day/month*
(USD 1,000) 446* 485* 24.0 35.3 21.4 22.1 - - 18.4 21.7
Average T/C income per unit is not reported for the offshore fleet.
GAS
Bergesen's gas fleet generated nine-month operating profit of USD 81.1 million,
compared with USD 43.4 million last year. Earnings were substantially higher
than last year in the VLGC, LGC and MGC segments but slightly lower for the
Igloo and Handygas vessels.
Bergesen's VLGCs (over 70,000 cbm) generated average T/C income of USD
670,000/month, compared with USD 570,000/month last year. Charter cover at the
end of the period stood at 46% for the fourth quarter and 15% for next year.
There were again few LPG cargoes in the spot market in the third quarter.
Although a busy market for light petroleum products provided employment for as
many as ten VLGCs, there were lengthy waiting times in this segment. Falling
crude prices put pressure on prices for refined oil products, including
naphtha, which competes with LPG as a raw material for the petrochemical
industry. A drop in demand for LPG from the US petrochemical industry also
undermined US LPG imports. Pressure on naphtha prices in the Atlantic market
meant that significant volumes headed for the Asian market where prices were
higher. The transportation of jet fuel from the USA to Europe was also a busy
trade.
Six newbuilds joined the world VLGC fleet during the first nine months and two
more are due to follow before the end of the year. The world fleet totalled 104
vessels at the end of the period, with a further 12 on order.
Bergesen's LGCs (50-60,000 cbm) recorded average T/C income of USD
595,000/month, compared with USD 565,000/month last year. Charter cover at the
end of the period stood at 57% for the fourth quarter and 34% for next year.
The LGC market deteriorated in the third quarter, partly due to the reduced
availability of ammonia cargoes. Falling natural gas prices in the USA led to
growing domestic production of ammonia from natural gas and so to a reduction in
import requirements, which impacted primarily on exports from the Black Sea. The
temporary closure of an LPG export terminal in Algeria reduced exports at the
beginning of the quarter, much of which head west on LGCs. Low US LPG prices
also contributed to the low volumes on westward trades. This trend was
intensified by the terrorist attacks on New York. The reduced availability of
both ammonia and LPG cargoes resulted in a sharp increase in waiting times
between cargoes.
The world LGC fleet consisted of 25 vessels at the end of the period. Four
vessels were on order: two for Bergesen and two for Solvang.
Bergesen's MGCs (20-40,000 cbm) generated average T/C income of USD
540,000/month, compared with USD 475,000/month last year.
The availability of both LPG and ammonia cargoes weakened in the third quarter.
The deterioration in the LGC market also had a knock-on effect on the MGC fleet,
and a trend towards fewer and smaller LPG cargoes in the spot market in August
and September brought stiffer competition from smaller semirefrigerated vessels.
Waiting times between cargoes increased.
The world MGC fleet consisted of 45 vessels at the end of the period. No
newbuilds are due to be delivered this year, as was the case last year. Four
vessels were on order at the end of the period: three for delivery in 2002 and
one in 2003.
Bergesen's Handygas vessels (12,000 cbm) generated average T/C income of USD
260,000/month, compared with USD 275,000/month last year, while its Igloo
vessels (8-15,000 cbm) recorded average T/C income of USD 305,000/month,
compared with USD 350,000/month last year.
The market for the semirefrigerated Igloo and Handygas carriers fell back in the
third quarter. Ethylene, propylene and VCM volumes were down on the second
quarter and only partially offset by higher butadiene and LPG volumes. LPG's
larger share of overall shipping volumes impacted negatively on earnings since
LPG generally attracts less favourable rates than petrochemical gases.
No newbuilds have been delivered in this segment so far this year. 12 vessels
were on order in the 8-15,000 cbm segment at the end of the period and a further
12 vessels in the 6-8,000 cbm segment.
TANKERS
Bergesen's VLCC fleet generated nine-month operating profit of USD 146.2
million, compared with USD 59.7 million last year. Average T/C income was USD
33,700/day, compared with USD 26,000/day last year.
The VLCC market proved volatile in the third quarter. Rates firmed in July after
Iraq resumed full oil exports, which equated to an increase of 1.25 mb/d from
June to July, but the market fell back sharply in August before rallying again
in September. These movements are hard to justify on the basis of actual
changes in OPEC production, which fluctuated by only 0.5 mb/d from month to
month during the quarter and was highest in August when rates were lowest. The
market is very susceptible to psychological factors and reacted badly to OPEC's
announcement of a quota reduction from 1 September. The market's rapid
recovery in September was probably due primarily to the major players in the
market holding back tonnage and to volumes proving higher than anticipated as a
result of weak quota discipline on the part of OPEC members.
The average spot rate reported in the third quarter was USD 32,600/day for
modern tonnage and around USD 18,500/day for older turbine tankers.
OPEC has adopted quota reductions totalling 3.5 mb/d since February - the actual
decrease in production is estimated to be just over 2 mb/d - but oil prices have
still fallen sharply. The outlook for the world economy has deteriorated
significantly in recent times following weaker output and demand figures for the
world's leading economies. The attacks on the World Trade Centre seem to have
exacerbated the downward trend and increased uncertainty.
The IEA has revised its forecasts downwards and is now projecting growth in
world oil consumption (excluding the former Soviet Union) of just 0.1 mb/d or
0.1% this year and 0.6 mb/d next year.
24 VLCC newbuilds were delivered during the first nine months and 20 were sold
for scrap, four of these in the third quarter. A further six VLCCs have been
sold for conversion into FPSO units. The world order book amounted to 89 VLCCs
at the end of the period, equivalent to around 20% of the existing fleet. Nine
of these newbuilds are due to be delivered in the fourth quarter.
Bergesen sold the 296,000 dwt VLCCs Berge Ariake, Berge Sakura and Berge Ichiban
in the third quarter, generating a total capital gain for accounting purposes of
USD 42.8 million. An agreement has also been entered into on the sale of the two
296,000 dwt VLCCs under construction at Hitachi. The vessels will be handed over
to the buyer when they are delivered from the yard in the first quarter next
year. The sale will trigger a total capital gain for accounting purposes of
around USD 13 million on the vessels' delivery. These transactions mean that
Bergesen has now sold six of the series of eight VLCC newbuilds ordered from the
Hitachi yard in Japan last year.
DRY BULK
Bergesen's dry bulk fleet generated nine-month operating profit of USD 8.9
million, compared with USD 2.1 million last year. Average T/C income was USD
21,700/day, compared with USD 20,800/day last year. Charter cover at the end of
the period stood at around 90% for both the fourth quarter and next year.
The market for large dry bulkers worsened significantly in the third quarter.
The world dry bulk fleet continued to expand as a result of continued high
newbuilding deliveries and low demolition activity, and demand for tonnage was
slack. Steel production is falling in the USA, EU and Japan, and world steel
output this year is forecast to be sharply down on last year. Continued growth
in steel production in China and the former Soviet Union is compensating for the
reductions in the other major producing nations only to a limited extent. The
Capesize market has been hit harder than the smaller bulker segments due to its
heavy dependence on the steel industry.
Spot rates for modern Capesize vessels were around USD 6,600/day at the end of
the period but 12-month T/C rates up around USD 11,000/day were also being
reported. Two Capesize vessels were sold for scrap in the third quarter and six
newbuilds were delivered, with a further eight vessels over 100,000 dwt
scheduled to be delivered in the fourth quarter. The world order book at the end
of the period totalled 48 vessels, equivalent to around 9.5% of the existing
Capesize fleet over 100,000 dwt.
OFFSHORE
Bergesen's offshore fleet generated nine-month operating profit of USD 11.0
million, compared with USD 5.3 million last year.
Production on board the three offshore units - the Berge Hugin, Sendje Berge and
Berge Troll - continued to run to schedule in the third quarter. The conversion
of the VLCC Berge Hus into an FPSO unit begun at the Jurong yard in January is
expected to be completed by the end of the year as planned. The vessel has
been chartered by Triton Energy/Amerada Hess for four years from delivery with a
six-year extension option. The charterer also has a purchase option for the life
of the charter. The vessel will take over from the Sendje Berge on the Ceiba
field off Equatorial Guinea, with the Sendje Berge then switching to
another Triton Energy/Amerada Hess oilfield off Equatorial Guinea to begin a 12-
month charter for early oil production. The Berge Helene is also being converted
into an FPSO unit, with this work due to be completed in mid-2002.
Bergesen entered into an agreement on the sale of the Berge Hugin to Bluewater
in the third quarter. The purchaser took over the operation of the vessel with
effect from 1 September 2001 for accounting purposes but the actual handover/
settlement will take place in the fourth quarter. The transaction will generate
a capital gain for accounting purposes of around USD 1 million in the fourth
quarter and will help to streamline Bergesen's offshore business, giving it a
clear focus on generic solutions for benign waters, like the West African
market.
FINANCIAL INFORMATION
Bergesen had liquid assets (bank deposits, bonds, certificates and equities) of
USD 269 million at the end of the period.
Net interest expenses for the period came to USD 14.4 million, compared with USD
16.0 million last year. Additional interest charges of USD 6.4 million relating
to newbuilding contracts have been capitalised and included in the cost of the
vessels in question. The group had interest-bearing liabilities of USD 567
million and net debt of USD 298 million at the end of the period.
The company's equity holdings (excluding its own shares) were written down by
USD 18.9 million during the period to reflect their market value. Part of the
write-down was attributable to movements in exchange rates.
The cancellation of the company's holding of 10% of its own shares was
registered with the Norwegian Register of Business Enterprises in August. By the
end of the third quarter the company had bought back approximately a further
3.4% of its shares at a cost of NOK 395 million. These holdings have been
eliminated when calculating value-adjusted equity and per-share data. The
company has bought back approximately another 1.4% of its shares so far in the
fourth quarter at a cost of NOK 140 million and so currently holds a total of
4.9% of its own shares. The annual general meeting has authorised the board to
buy back up to 10% of the company's shares.
OUTLOOK
Even before the terrorist attacks on 11 September, the consensus among leading
economists was that growth in the world economy would be slower during the rest
of this year and next year. It is difficult to quantify the long-term effects of
the attacks. The economic data coming in suggest a recession in the world
economy, and hopes of an imminent recovery in the USA kick-starting growth
elsewhere are considerably muted.
The VLGC market is seeing rapid fleet growth and lower LPG volumes than last
year. The amount of idle tonnage is considerable - an estimated 10% of the world
fleet if employment in the naphtha market is ignored. The product tanker market
is forecast to remain sufficiently busy to continue to provide employment for
some of the VLGCs surplus to requirements on LPG trades, but earnings in this
market are expected to be lower than so far this year. The outlook for the LGC
and MGC segments deteriorated in the third quarter. US natural gas prices are
not expected to recover sufficiently in the short term for ammonia imports to
return to the volumes seen when natural gas prices peaked in the fourth quarter
last year and first quarter this year. Slack demand and low prices for LPG in
the USA are expected to undermine imports over the next few months.
For the Igloo and Handygas vessels no major changes are expected in the market
for petrochemical gases, which is already weak.
The VLCC market is expected to come under significant pressure during the rest
of this year and next year due to reduced demand for oil. Oil prices are under
pressure and have fallen significantly below OPEC's price band. Further quota
reductions and better quota discipline are needed to restore credibility and
bolster oil prices. There have been signals that OPEC is looking to cut output
by 1 mb/d from September's levels of 27.2 mb/d.
The board expects a weaker operating profit excluding sales profits in the
fourth quarter than in the third quarter.
The uncertainty in the world economy will, in the Board's opinion, represent a
substantial weakening of market conditions for the business segments gas,
tankers and dry bulk next year compared to this year.
CASH FLOW STATEMENT 1/1-30/9/01 1/1-30/9/00
(Unaudited figures in USD million)
Cash flow from operating activities 266.3 35.7
Cash flow from investing activities -34.3 -261.4
Cash flow from financing activities -297.3 113.0
Net change in cash -65.3 -112.7
Cash at beginning of period 282.0 350.8
Cash at end of period 216.7 238.1
MOVEMENTS IN EQUITY 1/1-30/9/01 1/1-30/9/00
(Unaudited figures in USD million)
Equity at beginning of period 1,399 1,423
Net profit for the period 211 23
Share buybacks -67 -
Sale proceeds to minority interests -9 -11
Equity at end of period 1,534 1,435
Oslo, 14 November 2001
The board of Bergesen d.y. ASA.
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