Release Date: October 30, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Klaveness Combination Carriers ASA (FRA:36K, Financial) maintained strong earnings despite a challenging market, with average time earnings of $34,050 per day.
- The company declared a stable dividend payment of $0.30 per share, maintaining a high payout ratio of 92%, which is above their policy of a minimum 80% payout.
- The new ship management agreement with OSM Thome is expected to optimize technical operations and provide access to larger operational scale and resources.
- The CLEANBU fleet resumed its best trade route, enhancing value and efficiency, with a significant reduction in ballast days.
- The company announced an investment in wind-assisted propulsion for new builds, further improving its competitive advantage in emissions reduction.
Negative Points
- Earnings before tax decreased by 13% compared to the previous quarter, reflecting a challenging market environment.
- Operating expenses increased slightly, with a notable rise in crew and maintenance costs for older vessels.
- The CABU fleet experienced lower earnings due to weaker markets and increased waiting times, impacting overall performance.
- The market for both proto tankers and dry bulk has weakened, with lower expected earnings guidance for the fourth quarter.
- The company faces risks from geopolitical tensions and macroeconomic uncertainties, which could impact future market conditions.
Q & A Highlights
Q: Can you provide an overview of Klaveness Combination Carriers' performance in the third quarter?
A: Engebret Dahm, CEO, highlighted that despite a challenging market where both proto tanker and dry bulk earnings fell more than expected, the company maintained strong earnings. The average time charter equivalent (TCE) earnings were $34,050 per day, which is a decrease from the previous quarter but still outperformed standard market benchmarks. The company declared a stable dividend of $0.30 per share, reflecting a 92% payout ratio.
Q: What strategic changes have been made regarding the technical management of the fleet?
A: Engebret Dahm, CEO, announced a shift to third-party ship management with OSM Thome, effective January 1, 2025. This change aims to leverage OSM Thome's large operational scale while maintaining the integrated operation model. KCC will integrate around 10 employees from Klaveness Ship Management to preserve combination carrier expertise.
Q: How did the CABU and CLEANBU segments perform during the quarter?
A: Liv Dyrnes, CFO, reported that CABU earnings fell to $29,700 per day due to weaker markets and increased waiting times. However, the CLEANBU segment saw a positive impact from resuming trade routes and efficient combination trading, maintaining stable earnings despite market challenges.
Q: What are the financial highlights and outlook for the company?
A: Liv Dyrnes, CFO, noted a 10% decrease in EBITDA to $32.6 million, primarily due to lower CABU earnings. The company maintains a solid balance sheet with an equity ratio above 60%. Looking forward, KCC expects continued strong performance with strategic bookings and a focus on efficient trading.
Q: What are the expectations for the proto tanker and dry bulk markets in the coming quarters?
A: Engebret Dahm, CEO, expressed optimism for the proto tanker market, anticipating demand growth and controlled supply. The dry bulk market is expected to remain strong, driven by Chinese demand and limited fleet growth. KCC is well-positioned with significant capacity already booked for the upcoming quarters.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
