Nordic Shipholding financial report for 1H
SHIPPING: Nordic Shipholding EBITDA in H1 2012, the was USD 4.7 million, down from USD 6.5 million in H1 2011. The result after tax for continuing operations was a loss of USD 3.6 million.
Despite the bad market the Company delivered a positive cash flow for its continuing operations of USD 0.5 million deriving from operating activities. The cash flow has been negatively affected in Q2 by USD 0.5-1 million in one-off costs in connection with the divestment of the chemical division. The comparable figure for H1 2011 was USD 0.5 million.
For 2012 Nordic Shipholding maintains the expectations as announced in the Annual Report for 2011. The expectation for its continuing operations of TCE revenues is in the region of USD 23 – 27 million, with an EBITDA of USD 7 - 10 million. The result before tax for the continuing operations is expected to be a loss of USD 7 to 12 million before any write-downs on vessels, goodwill or other assets.
The result before tax including discontinued operation is expected to be a loss of USD 15 to 20 million including an actual book loss from the sale of the chemical tanker activities of USD 4.6 million but before any write-downs on vessels, goodwill or other assets.
The divestment of the chemical tanker business was approved at the Annual General Meeting on 20 April 2012 and the divestment was completed on 30 April. The divestment price of USD 30 million was split into two:
1. USD 10 million in cash that was applied to reduce bank debt in the product tankers remaining in Nordic Shipholding, and
2. USD 20 million that was lent to the company acquiring the chemical tankers.
The divestment has given the Company time to achieve a permanent solution to its financial challenges and the board is actively pursuing a number of different options. The process for establishing a long-term solution is proceeding according to plan. However, if new equity is not injected and/or the moratorium granted is not extended beyond 31 March 2013, the Company may be unable to honor its commitments towards its banks, which consequently may result in loss of equity or bankruptcy. However, the company expects to find a solution creating value for lenders and shareholders.
The Company’s assets passed the impairment test end Q2 2012 and therefore no write-down has been made. However, book value is $163.8 million versus broker estimates of $141.3 million. Should the Company be forced to sell the remaining product tankers in a distressed sale, the equity will as a consequence hereof probably be lost.
Source: Nordic Shipholding