RNS Number:4753D
Bergesen d.y. ASA
07 November 2002
BERGESEN D.Y. GROUP
Nine-month interim report 2002
INCOME STATEMENT Nine months Third quarter Full year
(Unaudited figures in USD million) 2002 2001 2002 2001 2001
Operating revenue 424.8 614.3 132.8 167.1 767.7
Voyage expenses -122.8 -128.7 -43.7 -40.5 -171.4
T/C (time charter) income 302.0 485.6 89.1 126.6 596.3
Other operating expenses -230.6 -209.8 -79.4 -69.9 -277.2
Gains on sale of vessels 21.9 62.0 11.2 42.8 63.3
Operating profit before depreciation 93.3 337.8 20.9 99.5 382.4
Depreciation -81.2 -90.7 -26.5 -29.4 -119.6
Write-downs of vessels 0.0 0.0 0.0 0.0 -46.3
Operating profit 12.1 247.1 -5.6 70.1 216.5
Interest income 6.8 16.3 2.0 5.0 19.9
Interest expenses -15.7 -30.7 -5.8 -6.7 -37.7
Gains on sale of securities -0.7 -0.1 0.0 0.0 3.7
Write-downs/reversal of shares 0.1 -18.9 -10.5 -8.6 -22.6
Foreign exchange gains/losses 7.2 -2.6 2.5 9.4 -5.8
Dividend income and other financial items 0.3 0.8 -1.6 -1.0 1.6
Net financial items -2.0 -35.2 -13.4 -1.9 -40.9
Profit before tax 10.1 211.9 -19.0 68.2 175.6
Tax -1.1 -0.5 -0.4 0.0 -1.1
Profit after tax 9.0 211.4 -19.4 68.2 174.5
Minority interests 0.6 8.3 -1.5 1.1 7.0
Profit after minority interests 8.4 203.1 -17.9 67.1 167.5
Earnings per share 0.15 3.35 -0.33 1.09 2.80
Cash flow per share 1.53 4.79 0.12 1.57 5.52
Average number of shares 59,062,355 63,071,424 58,043,030 62,256,332 62,256,759
BALANCE SHEET
(Unaudited figures in USD million) 30/09-02 30/09-01 31/12-01
ASSETS
Intangible fixed assets 8 1 1
Tangible fixed assets 1,923 1,820 1,794
Financial fixed assets 48 58 53
Total fixed assets 1,979 1,879 1,848
Inventories 17 14 13
Receivables 64 60 61
Investments 57 53 58
Bank deposits, cash etc 140 216 172
Total current assets 278 343 304
Total assets 2,257 2,222 2,152
30/09-02 30/09-01 31/12-01
EQUITY AND LIABILITIES
Paid-in capital 286 287 287
Retained earnings 1,049 1,185 1,088
Minority interests 51 62 59
Total equity 1,386 1,534 1,434
Provisions for liabilities 25 23 22
Other long-term liabilities 758 557 554
Current liabilities 88 108 142
Total liabilities and provisions 871 688 718
Total liabilities and equity 2,257 2,222 2,152
RESULTS
The Bergesen group generated nine-month operating profit of USD 12.1 million,
down from USD 247.1 million last year. These figures include capital gains of
USD 21.9 million in 2002 and USD 62.0 million in 2001. The group recorded an
operating loss of USD 5.6 million in the third quarter, compared with a profit
of USD 70.1 million last year.
Freight income on a T/C basis totalled USD 302.0 million, compared with USD
485.6 million last year. Substantially lower rates for large gas and crude
carriers, higher bunker fuel prices and longer waiting times between cargoes
were the main reasons for this decrease.
Other operating costs climbed to USD 230.6 million from USD 209.8 million last
year. The drop in the average USD exchange rate during the first nine months of
the year from NOK 9.02 in 2001 to NOK 8.25 in 2002 contributed to this increase
as a substantial proportion of these costs are incurred in NOK. Charter hire
expenses also played a role in this increase, as well as costs related to
upgrading of large gas carriers in order to increase the possibility of
employment in the market for clear petroleum products.
The accounts show net financial expenses of USD 2.0 million after net interest
expenses of USD 8.9 million and net foreign exchange gains of USD 7.2 million.
Profit before tax came to USD 10.1 million, compared with USD 211.9 million last
year.
The accounts have been prepared using the same accounting policies as the annual
accounts for 2001.
FLEET REPORT
The operation of the fleet was satisfactory during the third quarter and there
was no significant technical off-hire in the fleet. Three 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) 2002 2001 2002 2001 2002 2001 2002 2001 2002 2001
Operating revenue 240.8 307.7 101.5 222.1 49.4 44.3 33.1 40.2 424.8 614.3
Voyage expenses -67.8 -65.8 -35.4 -43.7 -17.5 -13.9 -2.1 -5.3 -122.8 -128.7
T/C (time charter) income 173.0 241.9 66.1 178.4 31.9 30.4 31.0 34.9 302.0 485.6
Operating expenses -129.4 -123.3 -55.4 -58.7 -14.0 -10.3 -20.9 -13.1 -219.7 -205.4
Charter hire expenses -8.1 0.0 0.0 0.0 -2.8 -4.4 0.0 0.0 -10.9 -4.4
Gains/losses on sale of vessels -1.8 7.2 23.7 54.8 0.0 0.0 0.0 0.0 21.9 62.0
Operating profit before depreciation 33.7 125.8 34.4 174.5 15.1 15.7 10.1 21.8 93.3 337.8
Depreciation -43.6 -44.7 -22.4 -28.4 -9.4 -6.8 -5.8 -10.8 -81.2 -90.7
Operating profit -9.9 81.1 12.0 146.1 5.7 8.9 4.3 11.0 12.1 247.1
Minority interests -0.4 8.8 0.0 0.0 0.0 0.0 0.1 0.2 -0.3 9.0
T/C income per day/month* (USD 1,000) 378* 540* 14.8 33.7 18.4 21.7 - - 14.5 23.3
Third quarter (30/6-30/9) GAS TANKERS DRY BULK OFFSHORE TOTAL
(Unaudited figures in USD million) 2002 2001 2002 2001 2002 2001 2002 2001 2002 2001
Operating revenue 76.0 85.7 31.4 54.7 17.4 14.3 8.0 12.4 132.8 167.1
Voyage expenses -23.1 -19.1 -12.7 -15.5 -7.1 -4.3 -0.8 -1.6 -43.7 -40.5
T/C (time charter) income 52.9 66.6 18.7 39.2 10.3 10.0 7.2 10.8 89.1 126.6
Operating expenses -45.3 -42.7 -18.8 -17.4 -5.1 -3.4 -6.9 -4.8 -76.1 -68.3
Charter hire expenses -3.3 0.0 0.0 0.0 0.0 -1.6 0.0 0.0 -3.3 -1.6
Gains/losses on sale of vessels -1.3 0.0 12.5 42.8 0.0 0.0 0.0 0.0 11.2 42.8
Operating profit before depreciation 3.0 23.9 12.4 64.6 5.2 5.0 0.3 6.0 20.9 99.5
Depreciation -14.3 -15.1 -7.0 -8.6 -3.6 -2.2 -1.6 -3.4 -26.5 -29.3
Operating profit -11.3 8.8 5.4 56.0 1.6 2.8 -1.3 2.6 -5.6 70.2
Minority interests -1.4 0.9 0.0 0.0 0.0 0.0 0.0 0.1 -1.4 1.0
T/C income per day/month* (USD 1,000) 357* 446* 12.9 24.0 17.1 21.4 - - 13.0 18.4
GAS
Bergesen's gas fleet generated a nine-month operating loss of USD 9.9 million,
compared with a profit of USD 81.1 million last year. Earnings were sharply down
in all segments.
Bergesen's VLGCs (over 70,000 cbm) generated average T/C income of USD 370,000/
month, compared with USD 670,000/month last year. At the end of the period,
charter cover was 60% for the fourth quarter and 10% for next year.
Activity in the VLGC segment picked up during the third quarter due to
seasonally strong demand for LPG in Asia and low stock levels. Limited exports
from the Persian Gulf, led to higher shipments from the Atlantic basin to Asia.
Volumes on this trade had hit 2.3 million tons by the end of the period and are
expected to top 3 million tons by the end of the year. Export from AG fell by
approximately 5 million tons from 1998 - 2001 due to increased utilisation in
local petrochemical industry. Also OPECs oil production restrictions still have
a negative effect on the output and export of associated LPG from AG. The change
in shipping patterns boosted capacity utilisation in the VLGC fleet, but
continued tonnage overhang and higher bunker fuel prices prevented an
improvement in T/C income. Furthermore, trade in LPG from the Atlantic to Asia
is more sensitive to rate increases than on shorter voyages, because the
transportation cost amount to a proportionally higher part of the product price
for the buyer.
Higher levels of employment on LPG trades meant that fewer ships sought
alternative employment in the market for naphtha and other clean petroleum
products (CPPs), which saw rates fall in the Atlantic but hold up from the
Persian Gulf to Japan. Five of the 33 vessels in the VLGC pool were employed in
the CPP market at the end of the quarter. Bergesen has chartered in two VLGC
vessels of 82,000 cbm at fixed rate for two years from March 2002. Bergesen has
an option to extend the charter period by up to three years and to purchase the
vessels during the entire period.
Four VLGCs have been sold for scrap so far this year. The world VLGC fleet ended
the period at 102 vessels with ten newbuilds on order: one due to be delivered
in the fourth quarter, eight in 2003 and one in 2004.
Bergesen's LGCs (50-60,000 cbm) generated average T/C income of USD 415,000/
month, compared with USD 590,000/month last year. At the end of the period,
charter cover was 65% for the fourth quarter and 40% for 2003.
The LGC market was weak at the beginning of the third quarter with substantial
idle time between cargoes, especially for LPG. The situation improved during the
period as the availability of LPG cargoes picked up. Competition from VLGCs fell
back as more and more of these larger vessels were fixed to carry LPG to Asia.
All 16 vessels in the LGC pool were employed at the end of the quarter.
The availability of ammonia cargoes also improved thanks to higher shipments
from the Black Sea to the USA. One contributory factor was the unscheduled
shutdown of a large production facility on Trinidad. Another was the increase in
US natural gas prices, which made domestic production of ammonia from natural
gas less profitable and so favoured imports of ammonia.
Bergesen sold the 52,000 cbm LGC Hermes for scrap during the third quarter,
triggering a capital loss for accounting purposes of USD 1.2 million. The world
LGC fleet therefore consisted of 20 vessels at the end of the period. Two 59,000
cbm newbuilds were ordered in September and so the world order book now numbers
seven vessels: four due to be delivered in 2003, two in 2004 and one in 2005.
Bergesen's MGCs (20-40,000 cbm) generated average T/C income of USD 485,000/
month, compared with USD 540,000/month last year. The availability of LPG
cargoes in the North Sea in this segment was weak, due partly to growing
shipments on larger vessels to Asia where product prices were higher than in
Europe, and partly to lower output following the closure of production
facilities for maintenance.
One newbuild was delivered during the third quarter, after which the world MGC
fleet numbered 45 fully refrigerated and 13 semi-refrigerated vessels. Seven
fully refrigerated vessels and one semi-refrigerated vessel are now on order:
two due to be delivered during the fourth quarter, two in 2003, three in 2004
and one in 2005.
Bergesen's Handygas vessels (12,000 cbm) generated average T/C income of USD
220,000/month, compared with USD 260,000/month last year, while its Igloo
vessels (8-15,000 cbm) generated average T/C income of USD 255,000/month,
compared with USD 305,000/month last year.
Demand for ethylene and propylene in Europe was weak for much of the third
quarter and met by shipments internally within the region. August brought signs
of a slight increase in activity with fixtures for ethylene from Europe to Asia
and propylene from the USA to Asia. Activity in the market for petrochemical
gases fell back again in September but the availability of LPG cargoes improved
slightly. An estimated 30% of the world's 8-15,000 cbm gas carriers were without
employment at the end of the third quarter.
14 vessels were on order in the 8-15,000 cbm segment at the end of the third
quarter, including two with pressure tanks. A further six vessels were on order
in the 6-8,000 cbm segment, including one with pressure tanks.
Bergesen has ordered a series of seven large LNG newbuilds from Daewoo.
Agreements have been reached on the employment of all seven for a minimum of 20
years from delivery. The company is in the final stages of negotiations with
Sonatrach on the final contract for one of the newbuilds. Two of the vessels are
due to be delivered in 2003, one in 2004, three in 2005 and one in 2006. During
the third quarter Bergesen exercised an option to increase the cargo capacity on
the four LNG newbuilds employed to Nigeria LNG Limited from 140,500 cbm to
145,000 cbm.
TANKERS
Bergesen's VLCC fleet generated nine-month operating profit of USD 12.0 million,
compared with USD 146.1 million last year. Average T/C income was USD 14,800/
day, compared with USD 33,700/day last year.
The VLCC market fell further during the third quarter, plunging to a new
historical low. The average reported spot rate was USD 11,000/day for modern
vessels and USD -7,800/day for older turbine tankers.
The deterioration of the market in the third quarter must be attributed largely
to the deeply negative sentiment in combination with further growth in oil and
bunker fuel prices, which further widened the earnings gap between modern and
older tonnage.
The IEA estimates that OPEC produced 25.3 mb/d in the third quarter, which is an
increase of 1 mb/d on last year despite unchanged official production quotas.
However, the increase is consistent with OPEC's goal of keeping oil prices at
USD 22-28/bbl during a period of seasonal growth in demand, falling oil stocks
and a growing war premium due to the higher risk of a possible Allied attack on
Iraq. The growth in shipping volumes from OPEC countries in the Middle East
headed largely for Asia. There has been a sharp increase in rates so far in the
fourth quarter.
The IEA estimates that world demand for oil in the third quarter was 0.5 mb/d
higher than last year. Demand over the year as a whole is forecast to climb by
0.17 mb/d to 76.6 mb/d.
Bergesen sold the turbine tanker Berge Odel in the third quarter for an
accounting gain of USD 5.3 million and has since sold the turbine tanker Berge
Chief for an accounting gain of USD 6.8 million.
25 VLCC newbuilds were delivered during the first nine months of the year, while
31 VLCCs and ULCCs were sold for scrap and a further four vessels were sold for
conversion into FPSO/FSO units. 70 VLCC newbuilds were on order at the end of
the period, equivalent to 17% of the existing fleet. 17 of these are due to be
delivered in the fourth quarter and 36 in 2003.
DRY BULK
Bergesen's dry bulk fleet generated nine-month operating profit of USD 5.7
million, compared with USD 8.9 million last year. The reduction was due to lower
rates when renewing long-term contracts, lower earnings for vessels exposed to
the spot market, and a USD 1.1 million provision in the second quarter to cover
a claim anticipated from a charterer. Average T/C income was USD 18,400/day,
compared with USD 21,700/day last year. Charter cover is around 94% for 2002 and
90% for 2003.
The market for large dry bulk carriers was weak in July and August but rallied
strongly towards the end of the quarter. Capesize vessels benefited greatly from
an upswing in shipments of energy coal and continued high shipments of ore to
China. Poor weather in Asia led to longer idle time in port and a generally
tighter market.
Spot rates for modern Capesize vessels ended the period at around USD 16,300/day
and 12-month T/C rates at around USD 16,000/day. 16 Capesize dry bulkers and
seven Capesize combined carriers have been sold for scrap so far this year. 74
vessels of more than 80,000 dwt were on order at the end of the period,
equivalent to 12% of the existing fleet. Five of these are due to be delivered
in the fourth quarter, 27 in 2003 and 31 in 2004.
OFFSHORE
Bergesen's offshore fleet generated nine-month operating profit of USD 4.3
million, compared with USD 11.0 million last year.
The Sendje Ceiba has been in production off Equatorial Guinea since the end of
January. Production has been at 60-70,000 b/d and will be stepped up gradually
as new wells are hooked up. The Sendje Berge is still unemployed, as is the
Berge Helene whose conversion will be completed in January 2003. Bergesen was
invited to tender for several projects off West Africa during the third quarter
and decisions on some of these can be expected in the next three to four months.
FINANCIAL INFORMATION
Bergesen had liquid assets (bank deposits, bonds, certificates and equities) of
USD 196.7 million at the end of the period.
Net interest expenses for the period came to USD 15.7 million, compared with USD
30.7 million last year. Additional interest charges of USD 7.2 million relating
to newbuilding contracts were capitalised during the period and included in the
cost of the vessels in question. Interest-bearing liabilities totalled USD 769.6
million at the end of the period.
The company's equity holdings (excluding its own shares) were written down by
USD 10.5 million in the third quarter to reflect the decrease in their market
value.
In connection with the newbuilding programme for the seven LNG carriers,
Bergesen has entered into interest rate hedging contracts of varying maturities
for a total of USD 650 million, of which USD 125 million relates to the
construction phase and USD 525 million to the subsequent operation phase. The
agreed rate of interest is below that assumed in the calculations underlying the
freight contracts concluded.
In October Bergesen concluded an agreement with a bank syndicate on a USD 800
million unsecured loan facility running for seven years with a repayment holiday
for the first five. Together with the company's existing credit facilities, this
will ensure full financing for the company's planned investment programme and
considerable financial flexibility for further expansion.
Bergesen held 2,276,650 of its own shares, (2,031,500 A-shares and 245,150
B-shares) at the end of the period. 3,399,000 shares from previous buybacks were
cancelled at the Norwegian Register of Business Enterprises in August 2002 as
resolved by the annual general meeting of 25 April 2002.
Excluding buybacks, the company has 57,345,406 shares in issue.
OUTLOOK
Growth forecasts for this year and next have been revised further downwards. The
outlook for the US still seem better than for Europe and Japan, although there
is increased uncertainty about the industrial sector and signs of a drop-off in
investment. The outlook for China, India and the rest of Asia is still positive.
The VLGC market will probably hold at relatively high levels in the fourth
quarter and earnings are expected to be slightly up on the third quarter. The
market may come under fresh pressure at the beginning of next year due to
seasonally weaker demand for LPG and high newbuilding deliveries. Exports from
the Persian Gulf to Asia may also increase somewhat at the expense of
long-distance shipments from the Atlantic. The phasing out of older tonnage is
expected to continue. Earnings in the LGC and MGC segments are expected to be
more stable due to a better balance between newbuilding and demolition activity.
The market for petrochemical gases has deteriorated further recently. Weak
industrial output, especially in Europe, means that the region is now largely
self-sufficient in ethylene and propylene, and the world's other markets for
petrochemical gases are also relatively well balanced. The bleaker prospects for
industrial output may delay the anticipated upswing in this segment.
The VLCC market has rallied strongly in the fourth quarter - more strongly than
could be expected from seasonal variations alone. Other contributing factors
include the prospect of war with Iraq, the terrorist attack on the Limburg and
higher OPEC output. Earnings are expected to fall back over the next few weeks
and the market is likely to come under renewed pressure next year, despite
growth in world demand for oil of 1.1 mb/d or 1.3% to 77.7 mb/d. With fewer and
fewer vessels ripe for scrapping, it is doubtful whether demolition activity
will be sufficient to offset the delivery of 36 newbuilds.
The Capesize bulker market has outstripped expectations recently. Rates are
likely to hold at relatively high levels over the next few months but may dip
slightly from current levels. The Capesize market has been highly reliant on
continued high imports of iron ore and steel products into China.
OPEC's production quotas are expected to keep oil prices high and so promote
high levels of offshore exploration activity. Continued strong interest in
floating production solutions of the type offered by Bergesen is anticipated.
Bergesen expects to report slightly better operating results for the fourth
quarter than for the third.
CASH FLOW STATEMENT
(Unaudited figures in USD million) 30/09/02 30/09/01
Cash flow from operating activities 53.5 266.3
Cash flow from investing activities -245.5 -34.3
Cash flow from financing activities 159.2 -297.3
Net change in cash -32.8 -65.3
Cash at beginning of period 173.3 282.0
Cash at end of period 140.5 216.7
MOVEMENTS IN EQUITY
(Unaudited figures in USD million) 30/09/02 30/09/01
Equity at beginning of period 1,434 1,399
Net profit for the period 9 211
Share buybacks -47 -67
Distributed to minorities -9 -9
Equity at end of period 1,386 1,534
Oslo, 6 November 2002
The board of Bergesen d.y. ASA
This information is provided by RNS
The company news service from the London Stock Exchange
END
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