Solvang ASA 3rd quarter report 2013
20.11.2013Shipping activities yielded NOK 11.3 million in Q3 2013, where NOK 12.3 million came from the ship-owning companies (equity method), compared to NOK 21 million during the same period in 2012, where the ship-owning companies contributed with NOK 20.6 million. The result before tax for Q3 2013 was NOK 11.7 million compared to NOK 29.2 million during the same period in 2012. Reduced earnings comes from lower income in the ethylene segment of NOK 10.8 million, and gains on market value adjustment of the securities portfolio in Q3 2012.
On time charter basis Solvang's share of freight earnings for third quarter 2013 were NOK 50 million, down NOK 5million from same period in 2012, where improved freight earnings for VLGC and LGC segment were offset by the drop in ethylene segment. The Baltic Index, which climbed considerably in second quarter, remained stabile at about USD 75/ton for third quarter 2013, up from an average of USD 71/ton in third quarter 2012.
Contract coverage for the fully refrigerated vessels, VLGC and LGC, are 100% for 2013. For 2014 contract coverage is as of now 92%, with only three ships coming available during second half of 2014.
Ethylene tonnage operates partly in the spot market and partly in servicing contract of affreightment volumes.
VLGC 82k-84k cbm
The LPG export volume out of the Arabian Gulf is a central driver for this market, along with the increasing export out of USA. Second quarter had a
significant improvement in export volumes, mainly on increased volumes from Saudi Arabia, as well as start-up after maintenance shutdown in Qatar. This resulted in tight market balance, pushing the rates higher and has stayed high throughout third quarter. The quarter ended with a Baltic Index average of USD 75/ton, the equivalent of USD 1.57 million per month in timecharter. In fourth quarter the rates have dropped somewhat on lower spot volumes out of the Arabian Gulf, but are still relatively strong at a little over USD 60/ton, the equivalent of USD 1.1 million in monthly timecharter.
Panamax VLGC 75k cbm
LGC 60k cbm
Ethylene 12-17k cbm
The Solvang group's security portfolio has a book value of NOK 12.9 mill as per 30.09.2013. Solvang is responsible for the management of the portfolio, with a conservative investment strategy. The security portfolio had a minor positive market value adjustment of NOK 0.2 million for end of third quarter 2013.
Transactions with related parties are as per the guidelines set within the code. The Group's principal broker for sale & purchase is Inge Steensland AS. There are also parallel investments done with other companies within Steensland group. All transactions are done at market terms.
The Solvang Group has completed two scheduled classification dockings in third quarter 2013. In 2013 there are 10 ships due for classification dockings.
Stavanger, 20 November 2013
(This information is subject of the disclosure requirements pursuant to section 5-12 of the Norwegian Securities Trading Act.)
Making Heavy Fuel Oil Clean
Exhaust gas recirculation (EGR) combined with previous measures reduces NOx emissions from heavy fuel oil by up to 80 % in a typical LPG tanker. The concept is a potential game changer for Norwegian domestic shipping.
The greenest and most fuel efficient VLGC ever
Solvang’s new-builds (84k cbm) at Hyundai Heavy Industries are two of the most fuel efficient LPG carriers ever built, in addition they are some of the world’s largest ships for transporting liquefied petroleum gas.