KCC Third Quarter 2024 – Strong financials amid more challenging markets
Image: Engebret Dahm, CEO Klaveness Combination Carriers
Oslo, 30 October 2024: Klaveness Combination Carriers (“KCC”) reports continued strong operational and financial performance and maintains dividend distributions of USD 0.30 per share in line with last quarter. TCE earnings for the KCC fleet outperformed both the dry bulk and product tanker markets in Q3, demonstrating the value of the combination carrier concept.
CEO Engebret Dahm commented: “KCC delivered strong results in the quarter amid more challenging markets with substantially weaker product tanker markets. Our CLEANBU vessels returned to more efficient combination trading, positively impacting earnings and emission performance, and both segments outperformed the standard dry bulk and product tanker markets.”
KCC owns and operates 16 combination carriers built for the transportation of both wet and dry bulk cargoes. The vessels are operated in trades where they efficiently combine dry and wet cargoes with minimum ballast, capitalizing on imbalances in trade flows.
“With expected lower rate differentials between dry bulk and tanker vessels going forward, we expect our combination carriers to demonstrate superior value creation. In such market circumstances the higher efficiency of our combination carriers is set to deliver premium earnings to standard vessels supporting continued strong financial performance and dividend distribution to our shareholders,” Dahm continued.
Highlights for Third Quarter 2024:
Q3 2024 EBITDA of USD 32.6 million (Q2 2024: USD 36.2 million) and EBT of USD 21.7 million (Q2 2024: USD 25.1 million)
Both KCC’s segments outperformed the standard dry bulk and product tanker markets in the quarter
Quite stable CLEANBU TCE earnings Q-o-Q of $38,673/day (Q2 2024: $39,093/day), despite significantly weaker spot markets
CABU TCE earnings of $29,668/day (Q2 2024: $37,656/day) impacted by a weaker MR-tanker market and temporary lower caustic soda volume
Record low carbon intensity (EEOI 6.1) driven by limited ballasting and high cargo intake (Q2 2024: 6.9)
Q3 dividend of USD 0.30 per share amounting to USD 18.1 million in total (Q2 2024: USD 0.30 per share), marking the 24th consecutive quarterly dividend distribution
Fleet average TCE earnings for the quarter of $34,052/day [1] (Q2 2024: $38,376/day [1]) were mainly the result of lower CABU TCE earnings compared to last quarter, however the fleet outperformed both the dry bulk and tanker markets. The CABU segment delivered average TCE earnings of $29,668/day [1] for the quarter (Q2 2024: $37,656/day) impacted by a weaker MR product tanker market and temporarily lower caustic soda volume in the period. The CLEANBU TCE earnings remained quite stable Q-o-Q and ended at $38,673/day [1] (Q2 2024: 39,093/day), despite a significantly weaker LR1 product tanker market. The strong CLEANBU performance was backed by improved trading efficiency and limited ballasting.
The Board of Directors declared a quarterly dividend distribution of USD 0.30 per share (Q2 2024: USD 0.30 per share) amounting to USD 18.1 million and equal to 92% of the adjusted cash flow to equity, well above the minimum dividend policy of 80% [2].
The carbon intensity (EEOI) of the KCC fleet improved significantly to reach 6.1, the lowest level ever achieved for a quarter. This was supported by a 19% Q-o-Q drop in CLEANBU EEOI, positively impacted by improved vessel utilization following increased combination trading. EEOI for the CABU fleet was stable at 6.3, around the same range as the previous four quarters.
TCE earnings guidance [3] for Q4 2024 is $28,000-29,000/day for the CABUs and $31,000-33,000/day for the CLEANBUs, somewhat down compared to Q3 mainly due to weaker product tanker markets to date in Q4 offsetting positive effects of more efficient combination trading.
[1] TCE earnings $/day are alternative performance measures (APMs) which are defined and reconciled in the excel sheet “APM3Q2024” published on the Company’s homepage Investor Relations/Reports and Presentations under the section for the Q3 2024 report. The address to the Company’s homepage is www.combinationcarriers.com.
[2] EBITDA, less maintenance CAPEX, less debt service (see slide 40 in the Third Quarter 2024 Presentation)
[3] Estimate based on booked cargoes and expected employment for open capacity basis forward freight pricing (FFA).
View Q3 2024 Report
View Q3 2024 Presentation
Invitation to presentation of Q3 2024 financial results
In connection with the release of financial results for the Third Quarter 2024, Klaveness Combination Carriers ASA (“KCC”) will hold a webcast presentation at 09:00 CET on Wednesday 30 October.
To follow the webcast live go to www.combinationcarriers.com/investor-relations or copy and paste the following link to your browser: https://www.combinationcarriers.com/kcc-q3-2024-financial-results.
Questions for the Q&A session can be submitted in writing through the webcast solution during the presentation.
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.
For further queries, please contact:
Engebret Dahm, CEO
Telephone: +47 957 46 851
Liv Dyrnes, CFO & Deputy
Telephone: +47 976 60 561