With dry cargo markets at historic lows in early 2016 and a market decline for gas carriers, J. Lauritzen‘s result for 2016 was »not satisfactory« at negative 45.6 mill. $. 2017 is expected to be another challenging year.
In Q4 2016 EBITDA amounted to USDm (11.4), compared to USD[ds_preview]m (12.9) in Q3 and USDm (11.0) in Q4 2015. Full-year EBITDA was USD (54.4) compared to USDm (41.1) in 2015.
J. Lauritzen‘s result for 2016 was not satisfactory at USDm (45.6) (2015: USDm (313.4)). The result was impacted by USDm 33.7 special items, mainly related to use of provisions. By comparison, the result for 2015 included special items totalling USDm (207.2) mainly related to impairment losses and provisions.
In early 2016 our owner, Lauritzen Fonden, agreed to inject new equity of USDm 19.4 and and at the same time a number of non-strategic assets and liabilities were transferred to the owner, which in total provided J. Lauritzen with additional cash of USDm 125 in 2016.
Two supramax bulk carrier newbuildings were sold and two wholly-owned and one part-owned handysize bulk carrier newbuildings were cancelled.
At year-end 2016, the solvency ratio amounted to 36.1% (2015: 31.5%) and cash and cash equivalents were USDm 141 (2015: USDm 116). Net interest bearing debt amounted to USDm 160 equal to 41% of broker values (in 2015 USDm 284 and 57%, respectively).
Net interest bearing debt was reduced during 2016 by USDm 123.8 to USDm 159.8 at year-end. Since 2012, net interest bearing debt has been brought down by USDm 948.
»In early 2017, a number of organisational and cost adjustments were implemented in order to improve our competitive position, and main terms for a new financing package were agreed with our core lenders«, says CEO Mads P. Zacho adding that »these initiatives follow a very tough year for global shipping where dry cargo markets fell to historic lows in February 2016 and where the serious market decline for large gas carriers was increasingly felt in the segments for smaller gas carriers«.
J. Lauritzen expects 2017 to be another challenging year for its businesses. Financially, operating income before depreciation and special items (EBITDA) is expected to be within the range of USDm (40)-(0) – better than in 2016, however not satisfactory. Depreciation and special items are expected to be at levels similar to 2016. Net financial expenses are expected to increase as financial income related to sale of shareholdings in 2016 is not repeated in 2017. Currency and interest rate fluctuations as well as effects from the sale of assets, if any, may impact the result, the company stated.
