KCC: Fourth Quarter 2024 Business Update
Oslo, 15 January 2025: Klaveness Combination Carriers’ ("KCC" or the "Company") preliminary CABU and CLEANBU TCE earnings for Q4 2024 ended at $/day 28,988 and $/day 28,027, respectively. Fleet average TCE earnings for the quarter ended at $/day 28,527 approximately $/day 1,700 lower than the mid-point of the guiding range ($/day 29,500-31,000) and approximately $/day 5,500 lower than in Q3 2024.
CABU TCE earnings for Q4 2024 were approximately $/day 500 above the mid-point of the guiding range mainly due to more capacity in caustic soda trades supported by a tight contract schedule through the quarter. The CABU fleet continued to trade efficiently with 91% combination trading and 13% ballasting. The CABU fleet delivered considerably higher TCE earnings compared to standard MR tanker vessels in Q4, with a multiple of 1.7*.
Despite weaker underlying product tanker and dry bulk markets in Q4 compared to Q3, CABU TCE earnings were only down approximately $/day 700 from last quarter supported by increased caustic soda shipments.
KCC expects to secure the full 2025 caustic soda contract volume for the CABU fleet during the next weeks. 87% of the volume for 2025 has so far been secured. Subject to finalization of the remaining two contracts, in excess of 30% of the full contract volume is expected to be fixed-rate.
CLEANBU TCE earnings for Q4 ended approximately $/day 4,000 lower than the mid-point of the guiding range due to a considerably weaker product tanker market compared to the forward market at the time of guiding (effect approximately $/day 1,200), more than expected ballasting and waiting time for two vessels after completion of dry-dock (effect approximately $/day 1,800), and negative IFRS 15** effects (approximately $/day 1,000). However, the CLEANBU TCE rates were substantially stronger than the LR1 spot tanker rates for the quarter, with a multiple of 1.4*.
The CLEANBU TCE earnings were down approximately $/day 10,600 from Q3 2024 to Q4 2024 mainly due to weaker markets and less optimal trading (79% combination trading and 20% ballast).
Actual on-hire days in Q4 were 15 days lower than the guiding due to longer dry-docking of two CLEANBU vessels.
2024 has been a historically strong year for KCC where TCE earnings matched product tanker spot earnings at the peak of the market in first half and considerably outperformed the spot market in a weaker second half. Coming into 2025 with less difference between the product tanker and dry bulk markets, KCC’s business model with efficient combination trading is expected to deliver increased earnings premiums compared to the standard markets.
KCC’s Fourth Quarter Report for 2024 will be published on 14 February 2025.
*Clarksons, MR (CABU) and LR1 (CLEANBU) tanker multiple calculated based on assumption of one-month advance cargo fixing/«lag»
** IFRS15 recognizes revenue based on load-to-discharge and not based on discharge-to-discharge. No cash effect, but effect om timing of revenue recognition.
| TCE earnings ($/on-hire days) | Q4 2024 Preliminary | Q4 2024 Guiding* | Q3 2024 Actual | 2024 Preliminary |
|---|---|---|---|---|
| CABU | 28,988 (684) | 28,000 - 29,000 (680) | 29,668 (735) | 32,717 (2,779) |
| CLEANBU | 28,027 (631) | 31,000 - 33,000 (650) | 38,673 (697) | 38,151 (2,648) |
| Fleet | 28,527 (1,315) | 29,500 - 31,000 (1,330) | 34,052 (1,432) | 35,368 (5,427) |
*Estimate based on booked cargoes and expected employment for open capacity basis forward freight pricing (FFA)
TCE earnings $/day are alternative performance measures (APMs) which are defined and reconciled in the excel sheet “APM4Q2024” published on the Company’s homepage Investor Relations/Reports and Presentations under the section for the Q4 2024 Report. The address to the Company’s homepage is www.combinationcarriers.com.
The Company has in relation to this Business Update scheduled a group call with equity and credit analysts covering KCC. More information about the call, including date/time and participants is included in the attached presentation. The presentation includes the material being presented in the meeting.
For further queries, please contact:
Engebret Dahm, CEO, Telephone +47 957 46 851
Liv Dyrnes, CFO, Telephone +47 976 60 561
About Klaveness Combination Carriers ASA:
KCC is the world leader in combination carriers, owning and operating eight CABU and eight CLEANBU combination carriers with three CABU vessels under construction for delivery in 2026. KCC’s combination carriers are built for transportation of both wet and dry bulk cargoes, being operated in trades where the vessels efficiently combine dry and wet cargoes with minimum ballast. Through their high utilization and efficiency, the vessels emit up to 40% less CO2 per transported ton compared to standard tanker and dry bulk vessels in current and targeted combination trading patterns.