TNG FY 2020 Results

In 2020, TNG recorded a decrease in sales of 11.6%, a decrease in EBITDA of 11.9% and a net loss of HRK 31.7m.

In 2020, TNG recorded a decrease in sales of 11.6% to HRK 236.96m. Tankerska noted that they did not get taken away by the lucrative spot market in H1, yet managed to use it as leverage for additional time charter coverage. In these terms, TNG managed to secure a total of 1,466 time charter days which was 2.3% YoY lower, mainly due to the number of off hire days, as four of thier ECO tankers spent in dry dock.

As a reminder, in H1 of 2020, demand for oil has fallen so severely, and at such pace, that there is little space left on land to store the crude made redundant by the coronavirus crisis. Due to the lack of land storage, oil traders were increasing their demand for floating storage, which means renting an oil tanker for the purpose of holding the cargo until oil prices improve. The increased demand for tankers, intended to be used for storage, started off back in March when oil prices decreased enough for big energy traders to be able to take advantage of a market structure called contango.

Meanwhile, the company noted that sticking to the long-term company employment strategy, TNG capitalized on limited spot exposure towards the H2 of the year in a far from lucrative period.

TNG Financials (2020 vs 2019) (HRK m)

In 2020, TCE net per operating vessel amounted to USD 14,250 per day, representing a decrease of 3.7% YoY. Meanwhile, daily operating expenses amounted to USD 6,823.

On the operating expenses side, the company noted a sharp increase of 17% or HRK 36.8m. Such an increase could almost entirely be attributed to higher value adjustments of HRK 55.7m. To be specific, the fleet’s ECO vessels carrying amounts was reduced by about 7% of the estimated market value since its book value by the Management’s estimates exceeded the estimated DCF value.

As a result of the above mentioned, EBITDA (adjusted for value adjustments) reached HRK 97.2m, representing a decrease of 11.9% YoY. Such a result puts the EBITDA margin at 40.3%.

Going further down the P&L, the company recorded an operating loss of HRK 11.3m, mostly due to the aforementioned vessel impairment coupled with a decrease in operating revenues. The net loss was further widened by a net financial loss of HRK -20.4m. Therefore, net loss for the period amounted to HRK 31.68m, compared to a profit of HRK 23.34m in 2019.

We have recently published an overview of the MR Tanker Market, which you can find here.

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