Company Announcement 10/2022

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August 24, 2022

VScompany announcement: ten/2022

Published via NASDAQ OMX on August 242022

H1 Rresult 2022

The comparison figures for the period ended 3June 0 2022 are indicated in parentheses.

The Group’s operational performance in H1 2022 was impacted by the sale of the three remaining vessels. The last vessel, Nordic Amy, was delivered to its new owner on April 1, 2022.

The Group generated an after-tax profit of $3.6 million (including amortization of certain $3.9 million vessel loan interest) in the first half of 2022, compared to an after-tax loss of $6 .0 million for the same period last year. TCE revenue in Q2 2022 was recognized due to reversals of IFRS 15 and revision of pool distributions from prior periods by pool managers. Despite the improvement in average TCE rates in the first quarter of 2022, the shortfall related to the sale of vessels led to lower revenues for TCE in the first half of 2022 compared to the first half of 2021.

Vessel operating expenses in the first half of 2022 decreased to USD 1.8 million (USD 5.2 million), mainly due to the sale of the respective vessels.

EBITDA decreased to $0.6 million ($0.8 million). Other external costs remained relatively unchanged at $0.7 million ($0.7 million).

The Group recognized a reversal of previously recognized impairments on assets held for sale of USD 27,000 in the first half of 2022, as certain actual additional expenses related to the sale of vessels were lower than estimated.

After taking into account amortization, depreciation, write-downs and reversals of assets held for sale, financial expenses and financial income, profit after tax amounts to 3.6 million dollars in H1 2022 (loss of 6.0 millions of dollars).

Between December 31, 2021 and June 30, 2022, shareholders’ equity improved from minus $14.3 million to minus $10.7 million due to the profit recognized during the period.

The Group has also been subject to a quarterly cash transfer mechanism whereby the Group, after payment of installments and interest under the loan agreement, must allocate any cash and cash equivalents of the Group in excess of 6.0 million dollars to prepayment of the loan. There was no cash transfer in the first half of 2021.

During the current year, cash flow from operations was a net cash inflow of $2.2 million (net cash outflow of $0.4 million) due in part to bunker proceeds received upon delivery of the respective vessels to the new owners. The net proceeds from the sale of Nordic Anne, Nordic Agnetha and Nordic Amy were used to repay bank loans in the first half of 2022. Overall cash and cash equivalents improved to $3.7 million as of June 30, 2022 versus USD 2.5 million as of June 31, 2022. December 2021.

As announced on January 21, 2022 (company announcement 2/2022), the Group has entered into an agreement with the lenders to extend the maturity of the existing bank credit facilities until March 31, 2022. With the delivery of the last vessel, Nordic Amy, to new ownership on April 1, 2022, the remaining outstanding loan balances were settled through the proceeds of the sale of Nordic Amy, internal cash and the use of USD 2.3 million under the bank guarantee issued by the majority shareholder of the Company to the lenders.

In order to support the ongoing efforts to clarify the future activities of the Group, the majority shareholder of the Company intends, if necessary, to support the Group, financially or otherwise, in the conduct of the Group’s affairs with a view to ensuring that the Group will be able to continue as a going concern for at least fiscal year 2022. For the avoidance of doubt, the intention does not constitute a legal obligation to provide financing or support to the Group. The majority shareholder of the Company has also extended the maturity of the shareholder loans until mid-April 2023.

The outlook for 2022 remains unchanged as reported in the 2021 Annual Report. Notwithstanding the sale of all remaining vessels, TCE’s revenues for 2022 were expected to remain in the region of $2.5-3.0 million, pending finalization pool accounts. After taking into account estimated vessel operating costs and administrative operating expenses, the Group’s expected EBITDA (earnings before interest, tax, depreciation and amortization) for 2022 would be around -0.5 million USD to 0.5 million USD, and the profit before tax, positively impacted by one-time revenues, would be between 2.0 million USD and 3.0 million USD. Please also refer to note 0 “going concern assumption” in the H1 2022 interim report.

For more information, please contact:
Mr. Esben Poulsson, Nordic Shipholding A/S: +45 39 29 10 00

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