Klaveness Combination Carriers ASA (STU:36K) Q4 2024 Earnings Call Highlights: Navigating ...

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Sat, Feb 15, 2025, 12:01 AM 4 min read

Average Time Charter Earnings: $28,500 per day for Q4 2024.
EBITDA: $20.2 million for Q4 2024, a decrease of close to 40% quarter-on-quarter.
Earnings Before Tax: $8.6 million for Q4 2024, a decline of 60% from the previous quarter.
Dividend: $0.10 per share for Q4 2024, representing a 157% payout ratio.
EBITDA for 2024: $126.5 million, slightly down 6% from 2023.
Return on Capital Employed: 16% for 2024.
Return on Equity: 23% for 2024.
Cash Position: $56.1 million at the end of 2024, an increase of approximately $5 million quarter-on-quarter.
Total Assets: $614 million as of Q4 2024.
Equity Ratio: Close to 59% as of Q4 2024.
Operating Expenses: Increased by 9% year-on-year due to higher maintenance and crew costs.
Dry Docking Days: 408 scheduled days in 2024, with 343 days estimated for 2025.
Dividend Per Share for 2024: $1.05, approximately 95% of the adjusted cash flow to equity.
Share Buybacks: $1.2 million shares purchased for a total of $7.9 million in 2024.

Warning! GuruFocus has detected 11 Warning Signs with EUXTF.

Release Date: February 14, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

Klaveness Combination Carriers ASA (STU:36K) achieved strong earnings with average time charter earnings of $28,500 per day, resulting in an EBITDA of $20.2 million for Q4 2024.
The company maintained a consistent dividend payout, marking the 25th consecutive time since going public in 2019, with a $0.10 dividend for Q4 2024.
Klaveness Combination Carriers ASA (STU:36K) reported a record high EBITDA of $126.5 million for the year 2024, showcasing strong financial performance.
The company has successfully expanded its market share for CABUs in Australia and gained new customer approvals for CLEANBUs, strengthening its market position.
Klaveness Combination Carriers ASA (STU:36K) continues to pioneer low-carbon shipping by implementing energy efficiency investments and planning to install suction sails on new builds.

Negative Points

The company faced disappointing market conditions in Q4 2024, with weaker than expected pro tanker and dry markets impacting earnings.
Klaveness Combination Carriers ASA (STU:36K) experienced a significant decrease in EBITDA by close to 40% quarter-on-quarter from Q3 to Q4 2024.
Higher operating expenses, including increased maintenance and crew costs, contributed to financial pressures in 2024.
The company had a larger dry-docking program in 2024, negatively affecting financial results with a year-on-year impact of $7.1 million.
The outlook for Q1 2025 is relatively weak due to continued weakening in both the tanker and dry markets, impacting expected earnings.

Q & A Highlights

Q: Do you see more interest from your cargo customers around CO2 footprints, given the overall focus with fuel maritime and IEO discussions for a global levy? A: Engebret Dahm, CEO: Despite the headwinds, we see continued focus by customers on reducing CO2 footprints. Many customers are focused on reducing decarbonization costs, which we can deliver without increased costs. We expect this focus to improve with potential new measures from the IMO.

Q: After the sale of KSM to OSM, now having your assets managed outside the Klaveness Group, do you see any potential for future risks or opportunities arising from this? A: Engebret Dahm, CEO: We have maintained stability by keeping key personnel in Oslo, ensuring continuity. The transition has been successful, and we anticipate benefits from OSM's scale, particularly in cost and quality improvements.

Q: Could you give us some insights on the earnings potential for the different CABU designs as the older CABUs are replaced with the new CABUs? A: Engebret Dahm, CEO: The new ships have around 25% higher earning capacity due to increased cargo capacity and fuel efficiency. This should significantly increase the time charter equivalent earnings when the new ships are delivered.

Q: Can you also say a few words about the new builds in general? Is everything going according to plan? A: Engebret Dahm, CEO: Yes, everything is on track. The first ships are expected to be delivered 1 to 2 months earlier than planned. We have high-quality personnel in China, and the shipyard is familiar from previous contracts.

Q: How should we think about the financing of yard installments before delivery for the new builds? Is it fair to assume that you will draw on the RCF for each installment? A: Liv Hege Dyrnes, CFO: Not for every installment, but we will likely draw approximately the same amount as the CapEx for the new builds over the year.

Q: What is the plan for the older vessels when the 3 new builds are delivered? A: Engebret Dahm, CEO: The older ships can trade in Australia until they are 25 years old. We are exploring alternative trades, but the base case is to recycle the ships at a green facility starting in early 2026.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

This article first appeared on GuruFocus.

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