Containerships plc interim report January-September 2016
- Turnover €147.3 M (148.6)
- EBITDA €10.1 M which is 6.8% of net sales (€6.0 M and 4.1%)
- Net profit €-2.2 M (-5.0)
- The Company clarifies its estimated net sales: The net sales is expected to be less than the previous year. Based on an earlier estimate, the net sales were expected to grow 5-10%. The Company keeps its EBITDA estimate at its earlier level of €13 M, which will be a 50% growth on the previous year.
Market situation and most important events
CONTAINERSHIPS is a full-service, door-to-door provider of shortsea shipping and logistics solutions. It ensures safe and rapid cargo transport between Finland, Russia, the Baltic States, Continental Europe, the UK and Ireland as well as in the Mediterranean region between Turkey and North Africa. Containerships offers customers a choice of all standard and special containers, and complete coverage through a fleet of sea vessels, and road, railway and river container transportation modes. At the end of the period, 89% of the Company's turnover came from operations in the region of the Baltic and North Sea and 11% from the Mediterranean region.
There have not been any significant changes in the Company's business environment. Russian trade has remained challenging due to sanctions and the general economic situation. So far, Brexit has not had any effect on the business. The business environment is not expected to have any significant changes in the near future.
During the reporting period, the Company finalized its LNG-vessel investment contracts and received the approval from the bond investors to the modified vessel financing package. Modifications in the financing package related to the change of shipyard, which was informed on September 2 and 22. The Company continues its progress as planned on the LNG investment path. New LNG vessels are under construction, and they will be delivered during 2018 as informed earlier.
The Company started its own agency in Algeria in August and simultaneously terminated its agency agreement with a third party. This is to strengthen the Company's North African operations.
Results in brief
| Key Figures, IFRS | Q3/2016 | Q2/2016 | Q1/2016 | 1-9/2016 | 1-9/2015 | Change % | 1-12/2015 |
| Net Sales, Meur | 48,4 | 49,8 | 49,1 | 147,3 | 148,6 | -0,9 % | 199,6 |
| EBITDA, Meur | 3,4 | 3,4 | 3,3 | 10,1 | 6,0 | 67,1 % | 8,3 |
| % of Net Sales | 7,0 % | 6,9 % | 6,7 % | 6,8 % | 4,1 % | 4,2 % | |
| EBIT Meur | 1,4 | 1,4 | 1,3 | 4,0 | -0,5 | -0,4 | |
| % of Net Sales | 2,8 % | 2,7 % | 2,7 % | 2,7 % | -0,3 % | -0,2 % | |
| Net profit Meur | -0,6 | -0,6 | -1,1 | -2,2 | -5,0 | 54,9 % | -6,7 |
| % of Net Sales | -1,2 % | -1,2 % | -2,3 % | -1,5 % | -3,4 % | -3,4 % | |
| Equity Ratio % | 11,9 % | 17,0 % | 13,9 % | ||||
| Equity Ratio %, adjusted | 20,8 % | 24,8 % | 22,3 % | ||||
| Personnel in Average | 496 |
Formulas used to calculate the key figures: Equity ratio = Equity/ total assets * 100, Adjusted Equity includes the convertible capital loans of about 10 MEUR
This is Containerships plc's third interim report according to IFRS accounting principles.
The Company's net sales were €48.4 M during the third quarter and were slightly behind the previous year's net sales (€50.4 M). The cumulative net sales from January-September were €147.3 M (€148.6 M). The growth of sales in the Baltic and North Sea slowed down during the third quarter and was 8% between January and September. The sales volume and the price level in the Mediterranean region reduced compared to the previous year due to the challenging market and competition situation. Price erosion in the Baltic and North Sea region stopped during the third quarter, and the main changes in the prices related to the changes in trade imbalance in Finland and Russia.
EBITDA of the third quarter remained about at the same level as the previous two quarters. The Company improved EBITDA by €2.5 M compared to the third quarter of last year. EBITDA of Jan-Sep was €10.1 M which was 6.8% of net sales (€6.0 M and 4.1%). Cumulative EBITDA exceeded the budgeted level, though the Company did not reach its sales growth target. Profitability increase came mainly from the Company's operational improvement program (improved utilization rate and positioning of the empty containers). Due to this, as well as the price of oil, operational costs were lower than in the previous quarter. Charter costs of the vessels increased a bit during the third quarter. Operational costs in the third quarter of 2015 included one-time legal costs of €0.9 M.
Financial income and expenses have levelled off as the currency fluctuations were lower during the reporting period. Net loss €560 000 remained on the same level as on the previous quarter. Cumulative net loss of Jan-Sep was reduced to €2.2 M (€5.0 M) due to the improved profitability. The own capital in the IFRS report does not include the two convertible loans totaling about €10 M. The adjusted own capital with these would be €24 M. A negative cash flow effect during the reported period of €5.8 M was experienced due to the change in working capital mainly in reduction of trade payables.
Future outlook
The Company's profitability estimate for 2016 remains unchanged. EBITDA target is a minimum of €13 M (approximately 50% growth) though the net sales will be slightly less than in 2015. The implemented efficiency improvements in the operations are the main drivers for the improved results. These actions will continue. Especially sales of services will be put into a focus in order to further develop the business in the growth segments. The Company does not expect any significant changes in the market situation or conditions. The business situation in the Mediterranean area is expected to remain challenging.
Construction of LNG vessels (4 units) is underway and they will be delivered as planned during 2018. The Company continues investing in LNG-fueled trucks. The Company has acquired an LNG re-fueling station in its UK site. The Company has also signed a grant agreement with the EU regarding the LNG project. This grant agreement is a significant support to the Company's environmental strategy and to the investments related to this field.
Containerships will publish its fourth quarter interim report and the whole year result of 2016 as earlier stated on 15 March 2017. The reporting schedule of 2017 will be informed by 15 December 2016.
These interim financial statements have been prepared in accordance with the IFRS accounting and measurement principles, but do not include the disclosure information required by the IAS 34 Interim Financial Reporting Standard. The Company did not report the full IFRS quarterly reports during 2015, the annual report from 2015 was made according to IFRS standards.
Containerships plc issued a senior secured callable bond loan 2015/2019 in 2 April and 28 October in 2015 which has been listed on OMX Helsinki since 1 April 2016.
Further information:
CEO, Kari-Pekka Laaksonen, phone +358 50 550 2555, kari-pekka.laaksonen(at)containerships.fi
CFO, Jari Lepistö, phone +358 50 60 212, jari.lepisto(at)containerships.fi
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