RESULTS
Odfjell's consolidated net result was USD 34 million in the first half of 2001. The improvement from a loss of USD 8 million in the first half of 2000 reflects a stronger market for transporting chemicals and clean petroleum products. Earnings before interest, tax, depreciation and amortisation (EBITDA) were USD 106 million, a sharp increase from USD 40 million for the comparable 2000 period. Operating result (EBIT) was USD 69 million, compared to USD 10 million for the first half of 2000. Gain from sale of 50% of the vessel Bow Saphir is included in the figures for the first half of 2001 with USD 3.5 million.
The result before currency items and taxes for the first half of 2001 was USD 47 million, compared to a loss of USD 10 million in the first half of 2000 and a gain of USD 8 million in the second half of 2000.
Gross revenue for the first half of 2001 was USD 428 million compared to USD 289 million in the first half of 2000 as a consequence of the acquisitions made during the second half of 2000 and higher freight rates.
The increase in total operating cost compared to the corresponding period in 2000 reflects acquisitions made during the second half of 2000. General and administrative expenses as well as depreciation are higher than in 2000 due to the growth of our activities.
Net interest expenses for the first half of 2001 was USD 22 million compared to USD 20 million for the same period in 2000 and USD 27 million in the second half of 2000.
The average USD/NOK exchange rate was 9.03 (8.49).
The strengthening of the USD/NOK rate from 8.90 at year-end 2000 to 9.32 at 30 June 2001 negatively impacted our currency hedging portfolio and our cash position in NOK. The currency cost in the period was USD 10 million (gain of USD 2 million). This is partly offset by reduced operating- and general and administrative expenses.
The net result for the second quarter 2001 was at the same level as the first quarter this year. The results for the first quarter 2001, however, included the afore-mentioned sales gain of USD 3.5 million.
BUSINESS SEGMENTS
Global trade
EBITDA, including sales gain of USD 3.5 million, for the first half of 2001 was USD 82.3 million, an increase from USD 29.4 million in the first half of 2000. Operating profit (EBIT) increased from USD 5.7 million in the first half of 2000 to USD 53.3 million in the first half of 2001.
Freight rate improvements resulted in time-charter income expressed in USD per day increasing by 47 % compared to the first half of 2000. Such time-charter income was stable from the first quarter 2001 to the second quarter this year. The average price of bunker was still high at about USD 130 per ton, compared to USD 132 per ton for the same period last year. Operating cost on a comparable fleet basis was about 3.2 % lower than the same period in 2000, primarily due to a strong USD.
Regional trade
EBITDA for the first half of 2001 was USD 7.8 million, an increase from USD 4.4 million in the first half of 2000.
Tank terminals
EBITDA for the first half of 2001 was USD 17.8 million, which is more than double the first half of 2000 figure of USD 7.6 million. The EBITDA of Odfjell Terminals (Baytank) was USD 7.6 million, compared with USD 7.0 million in the first half of 2000. Odfjell Terminals (Rotterdam) acquired in June 2000 showed an EBITDA of USD 9.7 million for the first half of 2001. Our share of the two terminals in China made an EBITDA of USD 0.6 million. We have increased our share in the Dalian terminal from 54% to 64% with effect from 1 July 2001.
Tank containers
EBITDA for the first half of 2001 was USD 1.5 million, compared to negative USD 0.9 million in the first half of 2000. Hoyer-Odfjell is still impacted by difficult market conditions.
LIQUIDITY AND FINANCING
Liquid assets as of 30 June 2001 was USD 221 million compared to USD 227 million as of 31 December 2000. In addition, undrawn available credit facilities equalled USD 100 million as per 30 June 2001 compared to USD 40 million as per 31 December 2000.
Interest bearing debt decreased from USD 954 million as per year-end 2000 to USD 915 million per 30 June 2001.
SHAREHOLDER INFORMATION
During first half of 2001 the price of the Odfjell A-share increased by 4%, from NOK 135 to NOK 141. The B-share increased from NOK 120 to NOK 130, an increase of 8%. The Oslo Stock Exchange shipping index increased by 5%, while the new transportation index rose by 18% during the first half of 2001.
Earnings per share amounted to USD 1.33 (NOK 12.01) in the first half of 2001 compared to negative USD 0.37 (negative NOK 3.14) in first half 2000. Cash flow per share was USD 2.92 (NOK 26.46) compared to USD 0.98 (NOK 8.32).
The Annual General Meeting held 8 May 2001 decided to redeem all outstanding treasury shares as of the same date. The redemption of 558,850 A-shares and 806,900 B-shares will become effective ultimo August 2001. At the Annual General Meeting on 8 May 2001 the Board of Directors was given an authorisation to acquire treasury shares of up to 10% of the company's outstanding shares. So far we have acquired 153,600 A-shares at an average price of NOK 140.51 per share and 212,420 B-shares at an average price of NOK 132.34 per share.
PROSPECTS
We expect that the current level of net earnings will continue for the balance of the year. The market for clean petroleum products has weakened in the second quarter, while contract rates for chemicals have improved in the same period. We anticipate somewhat lower time-charter result for our fleet during the second half of the year compared to the first half. Lower net interest expenses will be an offsetting factor.
One of the major risk factors is a prolonged weakening of the world economy, and the impact on global chemical movements. We expect a continued reduction in the supply of new tonnage, as less newbuildings will be delivered in the coming years. Furthermore, pressure on quality tonnage and age requirements should also positively impact the market.
Through the merger with Seachem and the acquisition of Odfjell Terminals (Rotterdam) the company has significantly strengthened its market position as a total logistics service provider.
Bergen, 17 August 2001
The Board of Directors of Odfjell ASA
Odfjell is the leading player in the global market of transporting chemicals and related logistical services. The fleet totals 85 vessels, trading both globally and regionally, of which 49 are owned by the group. Odfjell additionally owns and operates tank terminals and tank containers. Priority is being given to further developing the company's integrated logistical services.
