Company Announcement 9/2020
November 20, 2020
NORDIC SHIPHOLDING A/S
Company Announcement: 09/2020
Published via NASDAQ OMX on November 20, 2020
Write down and revised Outlook for 2020
As mentioned in Company Announcement 7/2020 following a strong product tanker market in 1H 2020, the market softened significantly going into 2H 2020. This impacted earnings but even more so, the build-up of products in storage, the declining demand and the continued uncertainty in relation to the COVID-19 pandemic, resulted in a very soft second-hand market with declining values for all tanker segments including product tankers.
As announced in Company Announcement 8/2020 the Nordic Hanne was re-classified as an asset held for sale and in this connection an impairment loss of USD 2.0 million was experienced in H1 2020. Given the softening second-hand market an additional impairment loss of USD 2.2 million will be recognised in Q3.
Consequently, the net carrying value of the remaining fleet has been reassessed and an additional impairment loss of USD 6.5 million has been applied towards these four vessels.
The above additional impairment losses totalling USD 8.7 million will be included in the annual result for 2020.
For the rest of 2020, the five vessels will continue to be commercially deployed on a pool basis (including the vessel currently earmarked for sale). Barring unforeseen circumstances, the TCE revenue for 2020 is marginally adjusted and now forecasted to be in the region of USD 27.0 million – USD 29.0 million, revised from USD 28.0 million – USD 31.0 million.
After accounting for operating expenditure budgeted by the respective technical managers, the Group’s expected EBITDA (earnings before interest, tax, depreciation and amortisation) for 2020 is in the range of USD 13.0 million – USD 15.0 million, revised from USD 14.0 million– USD 17.0 million. The result before tax will therefore be a loss between USD 5.0 million – USD 7.0 million including the impairment loss of USD 10.7 million, revised from a profit of USD 2.5 million – USD 5.5 million. The outlook for 2020 does not take into account any further impairment or write-back of impairment of vessels’ carrying values.
The Q3 2020 announcement will be released on 25 November 2020.
For further information please contact:
Knud Pontoppidan, Chairman of the board, Nordic Shipholding A/S: +45 39 29 10 00
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