2017-03-15 08:00:36 CET
2017-03-15 08:00:36 CET
REGULATED INFORMATION
Containerships Oyj - Annual Financial Report
Containerships plc: Financial Statement for 1 January - 31 December 2016
Containerships Plc Financial Statements 15 March 2017, at 09:00
Containership Plc's Financial Statement for 1 January - 31 December 2016
Containerships plc's Financial Statement 2016 and the Report of the Board of
Directors has been published. Financial statement includes complete
Containerships plc's Financial Statement, Group's Financial Statement and
Auditor's report. The Group has also published Corporate Governance. Financial
Statement and Board of Directors' report are attached to this release and also
available on Group's website www.containershipsgroup.com both in Finnish and in
English. Corporate Governance will be published also on Group's webpage.
Financial result 1-12/2016
* Net sales EUR 197.9 million (EUR 199.6 million in 2015)
* EBITDA EUR 13.9 (8.3) million which is 7.0% of net sales (4.2 % in 2015)
* Net profit EUR -1.4 million (EUR -6.7 in 2015)
* In 2017 the net sales are expected to grow by 5-10% and the profitability
(EBITDA) improve on the previous year.
Containerships Plc is a full-service logistics company providing safe, fast
container transportation in the Baltic Sea, North Sea and the Mediterranean.
Containerships offers both standard and customised containers and variable
logistics solutions from door to door. Containerships plc's bond totalling EUR
50.5 million issued on 2 April and 28 October 2015 has been listed on Nasdaq
Helsinki since 1 April 2016.
Key Figures
+--------------------------------+-----+------+--------------------------------+
|Containerships Group | 2016| 2015| Change|
+--------------------------------+-----+------+--------------------------------+
|Key Figure | IFRS| IFRS| |
+--------------------------------+-----+------+--------------------------------+
| | | | |
+--------------------------------+-----+------+--------------------------------+
|Net Sales, Meur |197.9| 199.6| -1,6|
+--------------------------------+-----+------+--------------------------------+
|EBITDA, Meur | 13,9| 8.3| 5.6|
+--------------------------------+-----+------+--------------------------------+
|EBITDA -% | 7.0%| 4.2%| |
+--------------------------------+-----+------+--------------------------------+
|EBIT, Meur | 5.9| -0.4| 6,3|
+--------------------------------+-----+------+--------------------------------+
|EBIT-% | 3.0%| -0.2%| |
+--------------------------------+-----+------+--------------------------------+
|Net Profit, Meur | -1.4| -6.7| 5.3|
+--------------------------------+-----+------+--------------------------------+
|Net Profit % |-0.7%| -3.4%| |
+--------------------------------+-----+------+--------------------------------+
|Return on equity, % |-7.8%|-34.6%| 26,8%|
+--------------------------------+-----+------+--------------------------------+
|Equity ratio, % |16.8%| 13.9%| 20.9%|
+--------------------------------+-----+------+--------------------------------+
|Equity ratio %, adjusted |21.3%| 22.3%| -4.5%|
+--------------------------------+-----+------+--------------------------------+
|Net interest bearing debt, Meur*| 46.2| 47.6| -1.4%|
+--------------------------------+-----+------+--------------------------------+
|% of net sales |23.3%| 23,8%| |
+--------------------------------+-----+------+--------------------------------+
|Personnel in average | 532| 547| -2.7%|
+--------------------------------+-----+------+--------------------------------+
Formulas used to calculate the key figures:
Return on equity = Profit or loss/ Equity' x 100
Equity ratio = Equity/ total assets x 100
Equity ratio, adjusted = (Equity + capital loans)/ Total assets x 100
* Net interest bearing debt is calculated according to bond terms (does not
include the capital loans)
Operating environment
The Group's business focus is in the Baltics, where Containerships is one of the
leading companies in the business. In the 2010s, the Group successfully expanded
operations to the Mediterranean Sea, where operations currently account for 11%
of the Group's revenue.
In 2016, various geopolitical, economic and legislative events impacted the
logistics market in Containerships' area of operation. Nevertheless, there were
no changes in the operating environment dramatically affecting the Group's
activities or performance. Overall freight volumes in the Group's area of
operation did not increase in 2016. Nevertheless, the share of unitised cargoes
continued growing as in previous years.
In 2016, freight rate levels continued to decrease partly due to low oil prices,
but the sharp increase in bunker prices during the last quarter impacted
directly on the Group's operating expenses. At the same time, Russia and Libya
are expected to see economic growth in the future as the price of oil rises.
The Russian import ban continues to have an impact, particularly on cargo flow
from Europe to Russia. When the ban entered into force in 2014, Containerships
successfully changed its strategy in the Russian market and replaced grocery
cargoes with other cargoes and increased cargo flow from Russia to Europe. In
2016, Russian exports continued to increase.
Freight volume between North Europe and Continental Europe remained fairly well
balanced in 2016. The United Kingdom's withdrawal from the European Union did
not yet have an impact on cargo volumes. Similarly, in the Mediterranean, there
was no major change in shipping between Turkey and North Africa compared to
2015. Growing political unrest in Turkey has not yet impacted the Group's
freight volumes.
In recent years, logistic companies have been forced to adapt also to
increasingly stricter environmental regulations. In 2015, as a consequence of
SECA (Sulphur Emission Control Area), part of vessels started using more
expensive oil while the other part invested in scrubbers. In July 2016, SOLAS
(The International Convention for the Safety of Life at Sea) was supplemented
with VGM regulation which demands the registration of container's precise gross
weight. It has incremented the information about real weight of containers and
specified the cargo plans and stability calculations.
Financial performance and the Board's proposal for profit distribution
Consolidated net sales for the financial year remained at the same level as the
previous year. The operational result increased significantly.
Consolidate net sales for the year was EUR 197.9 (199.6) million. Net sales for
the fourth quarter was EUR 50,6 (51,0) million.
Recorded EBITDA was EUR 13.9 (8.3) million, an improvement of EUR 5.6 million or
almost 70%. EBITDA for the fourth quarter was EUR 3.8 (2.3) million. The
improvement was achieved through better operational efficiency and the low price
level of oil. The consolidated operating profit for the full year of EUR 5.9 (-
0.4) million was also an improvement. The operating profit for the fourth
quarter was EUR 1.8 (0.85) million. The investments in the Group's growth
according to the strategy have increased financial costs resulting in a net
negative result of EUR -1.4 (-6.7) million.
The Group's equity ratio was 16.8% (13.9%). The Parent Company has two equity
loans totaling EUR 10 million. One of which, EUR 5 million, is reported as a
hybrid capital loan as part of the equity in the financial report, and the
other, as a converted capital loan reported as debt. According to the terms of
secured senior callable bond, both equity loans are considered as equity.
Therefore, the adjusted equity ratio is 21.3% (22.3%).
The Group's operational cash flow increased to EUR 12.4 (8.9) million.
Operational cash flow during the fourth quarter was EUR 7.6 (5.1) million.
According to the plan, the Parent Company used its assets from the escrow
accounts for the down payment of the LNG vessels and the container investments.
The Group's cash position was at the satisfactory level of EUR 11.1 (9.3)
million by the end of the year.
The Board of Directors proposes that the loss for the year is transferred to the
Retained Earnings, and no dividend shall be paid for 2016.
Investments
Investments in 2016 were EUR 21.8 (12.5) million in total. The Parent Company
paid the prepayment of EUR 17.2 million for the four new LNG-vessels. The future
payments will be done as charter fees starting when the vessels are taken into
use. The Parent Company received from EU a EUR 2.2 million prepayment of the co-
financing for the vessel investments in October. This was mainly booked to
reduce the unfinished fixed assets in the balance sheet. In addition, the Parent
Company made with about EUR 5 million net investments to containers.
Personnel
Group companies employed an average of 532 (547) persons in 2016, of which 98 in
Finland. Group had employees in 14 countries. Total personnel costs were EUR
21.9 (21.8) million, of which the members of management and the members of the
Board of Directors accounted for EUR 1.0 (1.2) million.
Group structure and owners
Containerships is a family-owned company and 98 percent of its shares are owned
by Container Finance Ltd Oy and two percent of its shares are owned by
Containerships' CEO. The home member state of Containerships Finance Ltd Oy is
Finland. Year 2016 was Containerships' 50(th) operating year.
Containerships Plc consists of the Parent Company Containerships Plc and the 19
subsidiaries each of which it owns 90 per cent at minimum. The Group operates in
21 countries.
Targets and strategy
The main targets in Containerships' strategy are growth and strengthening of the
market presence. According to the strategy, the Group will be the leading door-
to-door operator in short-sea segment in the Baltic Sea, as well as one of the
leading container distributors in Russia by 2020. The Group has established
transport services between the Baltic Sea and the Mediterranean, and has also a
strong position in Central and Eastern European markets.
Containerships aims for its service selection to evolve into an entirety of
different multimodal logistics solutions. This objective rests on the service
selection based on transport time and distance, as well as on the industry's
best customer service and operational reliability. A strong partnership network
supports the target.
Significant events during the reporting period
Due to market situation changes in the ship-building industry in China, the
Group transferred its building contract for four LNG vessels to a new shipyard.
Based on this change, the Group updated the terms of the senior secured callable
bond loan with the consent from the bond holders. The agreements related to
these events were finalised during summer 2016. Implemented changes caused an
approximate 9-12 months delay to the delivery of the vessels. All vessels are
planned to be delivered in 2018. In October 2016, the Group paid the down
payment in total of EUR 17.2 million for these vessels.
The Group's LNG strategy received significant recognition when the project -
Door2LNG - led by the Parent Company, was granted EU funding. The total amount
of this funding is EUR 17 million. It is a co-operation project together with
four participants investing in development of environmentally friendly logistics
in the Baltic and North Sea region.
According to the strategy, the Group continued to invest in sustainable
development by taking into use 40 LNG-powered trucks in England and four units
in other markets. The Group also opened its own LNG-fuelling station at its site
in Teesport, England.
In August 2016, the Group started its own agency activities in Algeria. At the
same time, the Group terminated its previous agency agreement.
In 2016 the Group paid special attention to increase its operational efficiency.
Through this special focus, the utilisation rates of vessels, containers and
trucks were improved. These activities had a positive impact on the Group's
performance. As a result of the new VGM regulations that came into force in July
2016 regarding the reporting of weights of containers, a new flow of information
and computer systems between the Group, shippers and terminals have been
developed.
Corporate Governance
The Annual General Meeting on 6 June 2016 adopted the Financial Statements and
discharged the Members of the Board of Directors and the CEO from liability for
the financial year 1 January -31 December 2015. Annual general meeting re-
elected Kimmo Nordström (chairman), Harri Nordström and Karita Nordström as
board members. They each own 33.3 % of Containerships Finance Ltd shares.
Authorised Public Accounting firm KPMG was elected as the Auditor of the Company
Kimmo Antonen will act as the Principal Auditor.
The Group's CEO is Kari-Pekka Laaksonen. At the period end, the management team
of the Group consisted of the CEO, CFO Jari Lepistö, COO Frederic Leca, CBDO
Juha-Pekka Mäkelä and Director of Land Operations Antti Laukkanen. Jari Lepistö
took over his position in February 2016.
Environmental responsibility
Containerships has positioned itself as one of the most advanced companies with
regard to its environmental solutions around the Baltic Sea. Already in 2011,
the first close-loop scrubber was installed on board MV Containerships VII, and
similar systems has later been installed also in four other vessels.
At the end of 2016 the Group had 40 LNG-fuelled trucks. In 2018, the Group will
bring into use four LNG-powered vessels. The aim is to be the first company to
offer a full transport chain based on LNG-powered solutions in its market area.
The use of LNG reduces the sulphur emission by 99% and fulfils the tightening
regulations being set for NOX, particle and CO2 emissions.
The Group is committed to reducing the environmental impact of its operations,
specially concentrating on reducing the CO2 emissions. In 2016, the Group
succeeded in reducing its CO2 emissions by 8.9%.
The Group has a certified ISO-9001 Quality Management System and has been
granted ISO-14001 Environmental Certification.
Risks
The Group's main risks currently relate to the possibility of an escalation in
political tension in its operating areas in the Baltic Sea and in the
Mediterranean Sea. Some markets in North Africa are exposed to political and
economic insecurity. For instance, growing insecurity in Libya has increased
handling times in ports.
In addition, the sudden increase of the oil price will cause an increase of the
operational costs, which the Group can compensate only with a delay. The UK
withdrawal from the EU may cause a decrease in cargo flows to the UK. However,
on the other hand, it may strengthen the country's exports.
Financial risks are described in more details in the notes of the Group
financial statements.
Disputes
There are no material legal cases known at the year-end closure. A possible
dispute might arise concerning the open payments of the ex-agent in Algeria. The
Group has made a claim of approximately EUR 2 million to the ex-agent. According
to the agency agreement, the possible dispute will be solved in mediation
handling, which procedure the Group estimates to begin in Spring 2017.
Outlook for 2017
Commercial activity within the core market is expected to increase modestly
according to the current views of economists. Therefore, the Group's comparable
transport volumes are expected to grow. Strengthened oil price is expected to
support the economies of, for example, Russia and Libya which are important to
the Group.
In the current business environment, the Group is aiming to reach a 5-10% growth
and to further improve its profitability (EBITDA). The Group continues its
growth through investments in LNG technology.
Events after the end of the financial year
In the beginning of 2017, the Group has established the shared service center in
Riga, Latvia.
These financial statements have been prepared in accordance with the IFRS
accounting and measurement principles. The Group did not report the full IFRS
quarterly reports during 2015, but the annual report from 2015 was made
according to IFRS standards. The financial statement is audited.
Further information:
CEO, Kari-Pekka Laaksonen, phone +358 50 550 2555, kari-
pekka.laaksonen(at)containerships.fi
CFO, Jari Lepistö, phone +358 50 60 212, jari.lepisto(at)containerships.fi
Containerships Plc will publish its' financial reports as follows:
- January-March interim report on Tuesday 16 May 2017
- Half year report on Tuesday 15 August 2017
- January-September interim report on Tuesday 14 November 2017
Appendix as separate pdf
Quarterly report 2016 (below)
Containerships Group Financial Statement 2016
Report of the Board of Directors
Containerships plc Financial Statement 2016
Auditor's report
Quarterly report 2016
PROFIT & LOSS
STATEMENT, GROUP
| +-------+-------+-------+-------+---------+---------+------+
|EUR 1 000 |Q4/2016|Q3/2016|Q2/2016|Q1/2016|1-12/2016|1-12/2015| Diff|
+-------------------+-------+-------+-------+-------+---------+---------+------+
| | | | | | | | |
| | | | | | | | |
|Net sales | 50 615| 48 397| 49 788| 49 136| 197 936| 199 579|-1 642|
| | | | | | | | |
|Other operating | | | | | | | |
|income | 894| 526| 675| 888| 2 983| 4 917|-1 934|
| | | | | | | | |
| | | | | | | | 0|
| | | | | | | | |
|Material and | | | | | | | |
|services expenses |-35 556|-37 463|-39 309|-38 352| -150 679| -160 190| 9 511|
| | | | | | | | |
|Employee benefit | | | | | | | |
|expenses | -5 731| -5 392| -5 455| -5 361| -21 939| -21 843| -96|
| | | | | | | | |
|Other operating | | | | | | | |
|expenses | -6 427| -2 676| -2 281| -3 042| -14 426| -14 178| -248|
+-------------------+-------+-------+-------+-------+---------+---------+------+
|EBITDA | 3 796| 3 393| 3 418| 3 269| 13 876| 8 286| 5 590|
+-------------------+-------+-------+-------+-------+---------+---------+------+
| | | | | | | | |
| | | | | | | | |
|Depreciation, | | | | | | | |
|amortisation and | | | | | | | |
|impairment losses | -1 978| -2 025| -2 064| -1 948| -8 016| -8 700| 684|
+-------------------+-------+-------+-------+-------+---------+---------+------+
|EBIT | 1 817| 1 368| 1 354| 1 321| 5 860| -414| 6 274|
+-------------------+-------+-------+-------+-------+---------+---------+------+
| | | | | | | | |
| | | | | | | | |
|Financial income | 2 419| 324| 133| 931| 3 807| 5 936|-2 130|
| | | | | | | | |
|Financial expenses | -3 660| -2 139| -2 009| -3 404| -11 212| -13 176| 1 965|
+-------------------+-------+-------+-------+-------+---------+---------+------+
|Profit/loss before | | | | | | | |
|extraordinary | | | | | | | |
|items, | | | | | | | |
|appropriations and | | | | | | | |
|taxes | 577| -448| -522| -1 153| -1 545| -7 654| 6 109|
+-------------------+-------+-------+-------+-------+---------+---------+------+
| | | | | | | | |
| | | | | | | | |
|Income taxes | 236| -112| -53| 40| 111| 924| -813|
+-------------------+-------+-------+-------+-------+---------+---------+------+
|Profit/loss for the| | | | | | | |
|reporting period | 813| -560| -575| -1 112| -1 434| -6 730| 5 296|
+-------------------+-------+-------+-------+-------+---------+---------+------+
+-------------------+-------+-------+-------+-------+---------+---------+------+
|EBITDA % | 7,5 %| 7,0 %| 6,9 %| 6,7 %| 7,0 %| 4,2 %| |
+-------------------+-------+-------+-------+-------+---------+---------+------+
|Operating profit % | 3,6 %| 2,8 %| 2,7 %| 2,7 %| 3,0 %| -0,2 %| |
+-------------------+-------+-------+-------+-------+---------+---------+------+
|Net Profit % | 1,6 %| -1,2 %| -1,2 %| -2,3 %| -0,7 %| -3,4 %| |
+-------------------+-------+-------+-------+-------+---------+---------+------+
[]
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