TNG published their 9M 2020 results, showing a 7.7% YoY decrease in sales, meanwhile EBITDA was up 8% YoY and net profit rose 75.5% YoY to HRK 30.8m.
In 9M period TNG posted sales in the amount of 185.7m, representing a decrease of 7.7% YoY. The decrease comes as a result of docking three tankers and less presence of TNG’s fleet at the spot market where the ship owner generates nominally higher income but is also burdened by higher costs due to the nature of the business in which the ship owner covers voyage related costs.
TNG’s 9M Financials
The average daily TCE of the fleet during the first half of 2020 was recorded at USD 15,221, representing a 5% YoY increase. Meanwhile fleet utilization amounted to 94.3%. Lower utilization comes as a result of the aforementioned docking.
TNG’s historic TCE
Commissions and voyage associated costs amounted to HRK 25.3m in the first nine months of 2020, while in the same period of 2019 they added up to HRK 44.9m. The decrease in these expenses is due to less exposure of TNG’s fleet in the spot market. Operating expenditures of the fleet amounted to HRK 73.2m in the first nine months of 2020 and have slightly increased from the same period of 2019 when they were HRK 70.5m, while general and administrative expenses recorded at HRK 4.8m are slightly up against the same period last year.
As a result, EBITDA rose 8% YoY, amounting to 85.9m.
Below the operating line, TNG’s net financial loss amounted to HRK -15.6m, representing a 31.6% YoY improvement. Finally, net profit amounted to HRK 30.8m, representing an increase of 75.5% YoY.
Turning our attention to the balance sheet, TNG was able to decrease their net debt by 6.7% since the beginning of the year with net debt amounting to HRK 458.9m. This translates to 3.9x net debt/EBITDA. According to the Management, the decrease in debt is in accordance with the loan repayment plans of TNG and regular decrease in indebtedness, while a further decrease in the company’s debt is expected in the future.
The management provided a calculation of NAV per share, putting it at USD 8.99 (cca HRK 58.3). This would indicate that TNG is currently traded 22.8% below the NAV of their vessels. However, they highlighted that the assessment was based on current market conditions (revenue and cost assumptions of typical average product tanker) which show strong fluctuations and do not take into account TNG specifics and management expectations.
TNG’s Historic NAV per share
IMO 2020
Note that in Q3 TNG installed the required ballast water treatment system in 2 of 3 tankers that had their regular five-year dry dock.
Based on the dockings done so far, the Management concludes that the actual costs are in line with the plan. In other words, the average cost of delivery and installation of BWTS and the cost of docking amounted about 1.5m USD per ship, keeping in mind that the ECO tanker Dalmacija was delivered from the shipyard as a new building with an already implemented ballast water treatment system
