The Group incurred a loss after tax of $1 mill in 1H17, compared to a profit after tax of $2.5 mill in the same period last year. The reduction in profit of $3.5 mill is mainly due to the lower tanker TCE revenue from the vessels deployed in the two pools. The loss of earnings arising from the drydocking of ‘Nordic Hanne’ in June, 2017 also contributed to the decrease.
EBITDA fell to $4.1 mill in 1H17 from $7.7 mill in the same period of 2016, primarily due to the reduction in TCE revenue in the first half of this year..
Nordic did not make any impairment nor reversal of impairment during the first half of this financial year.
Under the loan agreement, cash in excess of $6 mill will be used to pay down the loan facility. As the cash balance did not exceed that figure, there was no cash sweep for the period under review (cash sweep of $2.7 mill), in addition to the regular loan amortisation.
Between 30th June, 2016 and 30th June, 2017, equity decreased from $46.6 mill to $38.4 mill, as a result of the cumulative loss during the period. Consequently, the equity ratio decreased from 35.8% to 32.8% during the 12 month period.
During 1H17, cash flow generated from operations was $3.6 mill ($5.1 mill in 1H16) mainly from earnings by the two pools and timecharter income received for ‘Nordic Anne’, offset by payment of periodic interest expenses on the term loan.
In the period, the Group invested $1.1 mill ($0.2 mill in 1H16) in drydocking and also made scheduled repayments of $3.3 mill ($5.2 mill, including a $2.7 mill cash sweep in 1H16) on the term loan facility.
Cash and cash equivalents stood at $4 mill, a reduction of $2.4 mill from 30 June 2016.
For 2017, the five Handysize vessels are expected to remain commercially deployed in the UPT Handy Pool and Hafnia Handy Pool, respectively. The current timecharter for the LR1 will expire in November, 2017 - if the charterer does not exercise its one-year extension option. Nordic said that it will explore employment options during the second half of this year.
The relatively weak tanker market continued to extend into 3Q17. Based on the respective commercial managers’ updated forecasts, the Board has revised downwards the forecast for 2017 previously indicated in the 2016 Annual Report.
EBITDA is now expected to be in the range of $6 mill – $9 mill, a reduction from $8 mill – $11 mill. The result before tax is expected to be between $ -3.5 mill – $ -1.5 mill, a drop from $-1 mill – $1 mill. This outlook for 2017 does not take into account any impairment of vessels’ carrying values.