Rickmers Maritime Trust Q2 2013 results presentation

Financial Results Presentation

Second Quarter and First Half 2013

26 July 2013

Financial Performance

Business Review

Outlook

Highlights

| Results Presentation

Financial HighlightsFrom 1 January to 30 June 2013

2Q2013 Highlights:

• Successful rights issue, raising US$80.7 million (S$101.7 million) in gross proceeds

• Charter revenue stayed firm at US$35.0 million, with net profit of US$7.7 million

• The Trust paid down US$73.7 million in bank loans, of which US$54.7 million was from the rights issue, bringing

bank borrowings down to US$476.6 million and gearing to 50%

• Distribution of 0.60 US cents per unit, payable on 29 August 2013

Highlights

Outlook


Business Review


Income Statement

2Q2013 2Q2012 % ∆ 1H2013 1H2012 % ∆

Charter revenue 35,018 36,004 (3) 70,516 71,696 (2)

Other income 1,597 1,635 (2) 3,199 3,371 (5)

Other gains/(losses) - net 71 (324) NM 104 (336) NM

Total income 36,686 37,315 (2) 73,819 74,731 (1)

Add/(less):

Depreciation (9,407) (9,398) 0 (18,909) (18,860) 0

Amortisation of favourable charter contracts (128) (128) 0 (256) (256) 0

Vessel operating expenses (9,310) (8,744) 6 (18,081) (17,800) 2

Trustee-Manager fee (781) (767) 2 (1,551) (1,520) 2

Other trust expenses (146) (144) 1 (346) (329) 5

Transaction fees (157) 0 NM (157) 0 NM

Finance expenses (9,056) (9,222) (2) (16,083) (18,817) (15)

7,701 8,912 (14) 18,436 17,149 8

Income tax credit 0 0 NM 0 4 NM

7,701 8,912 (14) 18,436 17,153 7

Net profit margin 22% 25% 26% 24%

* NM: Not Meaningful

Profit before income tax

In US$'000

Net profit after tax


Balance Sheet Highlights

Note:

1) Based on total issued units of 847,350,000 as at 30 June 2013 and 423,675,000 as at 31 December 2012

In US$'000 As at 30 Jun 2013 As at 31 Dec 2012 % ∆

Assets

Cash and cash equivalents 67,066 57,168 17

Net book value of vessels 981,646 997,178 (2)

Other current and non-current assets 45,383 45,651 (1)

Total assets 1,094,095 1,099,997 (1)

Liabilities

Secured bank loans 475,220 568,402 (16)

Derivative financial instruments 24,227 34,896 (31)

Convertible loan 50,313 49,595 1

Other current and non-current liabilities 21,591 23,752 (9)

Total liabilities 571,351 676,645 (16)

Total unitholders' funds 522,744 423,352 23

Net Asset Value / Unit (US$) 1 0.62 1.00 (38)


Statement of Cash Flows

In US$'000 2Q2013 2Q2012 1H2013 1H2012

Cash flow from:

Operating activities 26,181 26,605 50,676 51,490

Investing activities (1,113) (581) (1,710) (2,268)

Financing activities (7,714) (24,723) (38,161) (50,833)

Net change in cash & cash equivalents 17,354 1,301 10,805 (1,611)

Cash & cash equivalents at beginning of period 49,723 50,636 56,276 53,536

Effects of exchange rate changes on cash and cash equivalents (11) (6) (15) 6

Cash & cash equivalents at end of period 67,066 51,931 67,066 51,931


Cash Flow Available for Distribution

In US$'000 FY2008 FY2009 FY2010 FY2011 FY2012 1H2013 1H2012 2Q2013 2Q2012

Profit/(Loss) after tax 34,437 40,741 (28,553) 40,326 27,623 18,436 17,153 7,701 8,912

Add/(less):

Non-cash adjustments and others 22,280 36,379 78,566 30,544 38,058 14,030 14,811 7,205 7,335

Interest expense - net 19,900 34,267 42,169 42,636 40,525 16,476 20,467 8,077 10,173

EBITDA 76,617 111,387 92,182 113,506 106,206 48,942 52,431 22,983 26,420

Non-recurring expenses 762 441 21,765 0 0 1,957 0 1,957 0

Adjusted EBITDA 77,379 111,828 113,947 113,506 106,206 50,899 52,431 24,940 26,420

Add/(less):

Movement in working capital 23 738 2,384 (2,500) 2,873 (393) (934) 885 113

Dry-dock reserve (1,656) (2,205) (2,033) (3,755) (3,058) (2,023) (2,790) (1,014) (1,355)

Cash flow available for distribution before payment

to debt capital providers75,746 110,361 114,298 107,251 106,021 48,483 48,707 24,811 25,178

Net proceeds from rights issue 0 0 0 0 0 78,748 0 78,748 0

Payment to debt capital providers (23,774) (43,050) (164,368) (92,268) (93,785) (112,668) (46,592) (84,763) (23,024)

Repayment of bank loans 0 (9,804) (104,999) (49,037) (52,003) (93,317) (25,173) (73,656) (11,886)

Interest paid - bank loans, int. rate swaps and conv. loan (19,536) (33,246) (41,691) (42,338) (40,889) (16,658) (20,526) (8,414) (10,245)

Debt processing fee 0 0 0 0 0 (1,800) 0 (1,800) 0

Loan restructuring fees 0 0 (2,678) (893) (893) (893) (893) (893) (893)

Debt arrangement fees (4,238) 0 0 0 0 0 0 0 0

Cash compensation fee 0 0 (15,000) 0 0 0 0 0 0

Cash flow available for distribution to unitholders 51,972 67,311 (50,070) 14,983 12,236 14,563 2,115 18,796 2,154

Amount to be distributed to unitholders 37,665 16,566 9,787 10,168 10,168 7,626 5,084 5,084 2,542

Distribution was partly funded from cash retained in prior periods

^ ^^


Cash flow available for distribution before

payment to debt capital providers (US$'000)75,746 110,361 114,298 107,251 106,021 48,483

Distribution declared (US$'000) 37,665 16,566 9,787 10,168 10,168 7,626

DPU (US cents) 8.89 3.91 2.31 2.40 2.40 1.20

Weighted average number of units ('000) 417,262 423,675 423,675 423,675 508,410 572,432

0

30,000

60,000

90,000

120,000

2008 2009 2010 2011 2012 1H2013

US$'000

Distributions

Cash flow available for distribution before payment to debt capital providers (US$'000)

Distribution declared (US$'000)

Distributions to Unitholders

50% 15% 9% 9% 10% 16%

* Consists of distribution of 0.6 US cents for total units of 423,675,000 for 1Q2013 and 0.6 US cents for total units of 847,350,000 for 2Q2013

*


Loan Facility Security

IPO Facility 1.75% 2017 282.9 282.7 110% Secured against the initial 10 vessels in the

IPO Fleet.

VTL covenant for the IPO Facility is 125% if

more than half of the vessels secured against

the IPO Facility have charters of less than one

year.

First Facility 1.75% 2019 164.2 163.2 110% Secured against the five Mitsui vessels.

Second Facility 1.75% 2021 29.5 29.3 110% Secured against the vessel Hanjin Newport.

TOTAL 476.6 475.2

Before the deduction of unamortised debt transaction costs of US$1.4 million

Margin above 3-

month US$ LIBOR

VTL Requirement

in Loan Facility

Face Value

US$' million

Year of

Maturity

Carrying Amount US$'million

^

Outstanding Bank LoansAs at 30 June 2013

• The Group has successfully obtained an extension of the waiver on the value-to-loan covenants for all loan facilities to 29 December 2014

As at 30 June 2013:

� Top Up Facility has been fully repaid

� Notional amount of interest rate swap contracts outstanding: US$391.6 million (31 Dec 2012: US$478.0 million)

� Interest rate swaps fixed between 3.50% to 4.99% per annum, with maturity before 1 July 2015


Bank Loans Repayment Schedule

Repayment (in US$ million)1H

2013

3Q

2013

4Q

2013

FY

2014

FY

2015

FY

2016 - 2021

Bank loan repayments 86.9 18.5 12.1 48.3 46.7 349.0

Excess cash repayments* 6.4 2.0Depends on Excess Cash Generated*

- -

Total 93.3 20.5 12.1 48.3 46.7 349.0

Excludes repayment of convertible loan

� Total bank debt repaid in 1H2013: US$93.3 million, of which US$54.7 million was from the Rights Issue proceeds

� Total bank debt remaining: US$476.6 million (as at 30 June 2013)

ProjectedActual

US$476.6 million

* Excess cash repayments will only continue for as long as the VTL covenant waiver is in place


Gearing

>>> Interest Coverage for 1H2013 at 2.9x

67%66%60% 63% 59% 50%


Successful Rights Issue

Gross proceeds US$80.65 million

As at 30 June 2013:

Less: Year-to-date expenses relating to rights issue US$(1.90 million)

Net proceeds US$78.75 million

Use of net proceeds – repayment of bank loans US$54.70 million

� In July 2013, the Trust utilised US$6.13 million of the net proceeds to further repay bank loans, bringing the total amount to US$60.83 million.

� The above utilisation is in line with the intended use of the net proceeds stated in the Offer Information Statement.

� Updates on the use of the remaining net proceeds will be provided as and when such proceeds are materially disbursed.

Highlights


Outlook

Business Review


Business ReviewFleet Utilisation

* Excluding positioning and scheduled dry-docking

2Q2013 2Q2012 1H2013 1H2012

Number of Vessels 16 16 16 16

Vessel Ownership Days 1,456 1,456 2,896 2,912

Off-Hire Days* 5.1 3.5 9.9 56.6

Fleet Utilisation 99.6% 99.8% 99.7% 98.1%


Diversified Portfolio of Charterers

1H2013 – US$70.52 million 1H2012 – US$71.70 million

• Charter revenue remained stable on the back of long-term charters with reputable counterparties

Hanjin 6%

CMA CGM 37%

CSAV 2%

MOL 34%

Italia Marittima

20%

Italia Marittima

20%

CMA CGM 39%

Hanjin7%

MOL 32%

MSC 2% MSC 1%


Container Time Charter Market

Source: Clarkson Research Services

US$26,007 (4,400 TEU

10-year average)

Rickmers Maritime’s 2013 Average Daily Charter Rate: US$24,887


Staggered Remaining Charter Periods

At 30 June 2013:

Average age of vessels: 5.8 years

Average remaining charter period: 2.7 years

Remaining committed revenue: US$407.5 million

Name TEU Charterparty Net Daily Charter Hire

2013 2014 2015 2016 2017 2018 2019

Kaethe C. Rickmers 5,060 MSC US$5,700 (until 24 Sep 2013) / US$6,650 (until Mar 2014)

Ital Fastosa 3,450 Italia Marittima US$25,870

Ital Festosa 3,450 Italia Marittima US$25,870

ANL Warringa 4,250 CMA CGM US$25,000

ANL Windarra 4,250 CMA CGM US$25,000

Ital Fiducia 3,450 Italia Marittima US$25,870

CMA CGM Azure 4,250 CMA CGM US$25,000

ANL Warrain 4,250 CMA CGM US$25,000

CMA CGM Jade 4,250 CMA CGM US$27,000

CMA CGM Onyx 4,250 CMA CGM US$27,000

Hanjin Newport 4,250 Hanjin US$25,950 US$27,950

MOL Dominance 4,250 MOL US$26,850

MOL Dedication 4,250 MOL US$26,850

MOL Delight 4,250 MOL US$26,850

MOL Destiny 4,250 MOL US$26,850

MOL Devotion 4,250 MOL US$26,850

Firm Time Charter Period Expiration Period Optional T/C Period

Highlights


Business Review

Financial &Outlook


OutlookFuture Scheduled Dry-dockings

• Dry-docking of merchant vessels is a regulatory requirement and is carried out in 5-year intervals in order to allow maintenance of the vessels’ underwater areas

• By end of 2014, all of Rickmers Maritime’s vessels would have undergone their first scheduled dry-docking

• After completing their first dry-docking, all of the 16 vessels are participating in an extended dry-dock trial program in which the next scheduled dry-docking for vessel maintenance is extended from 5 years to 7.5 years

2H2013 FY2014

No. of vessels scheduled for dry-docking 1 2

Scheduled off-hire days (Estimated ) 12 24


Outlook

• The liner carriers have introduced a freight rate restoration program starting 1 July 2013, with a

further freight rate increase from 1 August 2013.

• A significant amount of new ships, mainly very large container ships in excess of 10,000 TEU, is

scheduled for delivery during the next twelve months.

• Despite an increase in scrapping of existing ships, demand is unlikely to absorb the prevailing

over-supply within this year. As a result, recovery of time charter rates and vessel values is

expected to only gather pace in 2014.

• For 2013, expected trade growth is projected to reach 5.0%* and growth in global container capable

capacity is forecasted to marginally outpace demand growth. However, trade growth is subject to

risks from global economic developments, with downside risks being high oil prices and continued

uncertainty in the global economy, especially in the Eurozone and China.

• Our fleet of modern container vessels is fully employed in 2013.

• Barring any unforeseen circumstances, we believe our existing leases will continue to generate

ongoing positive cash flow for the Trust.

* Clarkson Research Services, June 2013


Disclaimer

This presentation should be read in conjunction with Rickmers Maritime’s Financial Statements for the financial year ended 30 June 2013, released via theSGXNET.

This presentation is not and does not constitute or form part of, and is not made in connection with, any offer, invitation or recommendation to sell or issue, orany solicitation of any offer to purchase or subscribe for, any units of Rickmers Maritime and neither this presentation nor anything contained in it shall formthe basis of, or be relied upon in connection with, any contract or investment decision.

This presentation does not constitute an offer or invitation in any jurisdiction where, or to any person to whom, such an offer or invitation would be unlawful.

Reliance should not be placed on the information or opinions contained in this presentation. This presentation does not take into consideration the investmentobjectives, financial situation or particular needs of any particular investor. Any decision to purchase or subscribe for the Units must be made solely on thebasis of your own judgment, if necessary, after seeking appropriate financial and professional advice.

No representation or warranty, express or implied, is made as to the fairness, accuracy, completeness or correctness of the information, opinions andconclusions contained in this presentation. To the maximum extent permitted by law, Rickmers Trust Management Pte. Ltd. (the “Trustee-Manager”) and itsofficers, directors, employees and agents disclaim any liability (including, without limitation, any liability arising from fault or negligence) for any loss arisingfrom any use of this presentation or its contents or otherwise arising in connection with it.

The forward-looking statements set out in this presentation are based on a number of assumptions that are subject to business, economic and competitiveuncertainties and contingencies, with respect to future business decisions, which are subject to change and in many cases outside the control of RickmersMaritime and the Trustee-Manager. Accordingly, neither Rickmers Maritime nor the Trustee-Manager can give any assurance that any forward-lookingstatement contained in this presentation will be achieved. Neither Rickmers Maritime nor the Trustee-Manager intends to update any of the forward-lookingstatements after the date of this presentation to conform those statements to actual results.

By participating in this presentation or by accepting any copy of the slides presented, you agree to be bound by the foregoing limitations.

The contents of this presentation are being given solely for your information. Not part of this presentation should be copied, reproduced or redistributed to anyother person in any manner or published, in whole or in part, for any purpose, without the prior written consent of the Trustee-Manager.

By accepting this presentation, you are deemed to accept the foregoing terms and conditions and agree to keep the contents of this presentation confidential.

Thank You

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www.rickmers-maritime.com

Rickmers Maritime Trust Q2 2013 results presentation

Economy & Finance

Transcript of Rickmers Maritime Trust Q2 2013 results presentation