Western Bulk publishes Second Half and Preliminary 2019 results
Second half year earnings after tax of USD 5.7 million excluding Chile
With continued growth in spot trading and good positioning to benefit from the increased market rates during the third quarter of 2019, Net TC excluding Chile reached USD 21.3 million in the second half of the year, an improvement from USD 20.1 million from the same period in the previous year. Combined with a reduced cost base this led to earnings after tax of USD 5.7 million excluding Chile.
Legacy positions in Chile had a negative impact on Net TC results of USD -8.8 million in the second half of the year in addition to provisions of USD -15.6 million primarily related to Chile. This led to a loss of after tax of USD -18.7 million in the second half of 2019 and USD -43.5 million for the full year. To offset the losses in Chile the two main shareholders have injected a total of USD 29.6 million in equity in 2019.
The NOK 300 million unsecured bond loan was fully repaid in April, and at the end of the year the Group had USD 24.0 million free cash in addition to up to USD 14.3 million in unutilized credit facilities with the company’s lending bankers.
Throughout the fourth quarter the size of the fleet was reduced to limit the risks related to the transition to the new IMO 2020 regulation, as well as an anticipation of a weak market in the first quarter of 2020. Western Bulk has limited forward cargo and tonnage commitments, and hence flexibility to adapt to different market environments. Despite a relatively muted market outlook, we are therefore cautiously optimistic for 2020.
During the last year, the Company has taken vast steps to become more data driven and improve analytical capabilities. Building internal competence on the digital landscape is a key focus area and trading signals are being developed by combining multiple data sources. By utilizing and making existing and new data sources available in smarter and more efficient ways, Western Bulk aims to take advantage of both long-held domain knowledge and disruptive technologies whilst continuing being a leading dry bulk operator.
In addition, the company’s cost base has been subject to thorough scrutiny with several initiatives in place to realize an expected cost reduction of USD 4 million in 2020 compared to 2019. This is achieved by saving on administration expenses, optimizing vessel performance, time in port, purchases, renegotiations, general spending as well as more optimal financing.
“With the strong support from our main shareholders we have now put the legacy positions in Chile behind us and will fully focus our efforts to further enhance the resilience and potential of our business model", states Hans Aasnæs, CEO of Western Bulk.
An investor presentation will be held at the company’s premises at Henrik Ibsens gate 100 in Oslo on the 10th of February at 10:00 to 12:00. Further information on the repair issue as decided by the General Meeting on the 19th of December will be distributed after the 10th of February with an ambition to close the issue within the end of February.
Please click on the link below to read the full Second half year and preliminary 2019 report for more information.