Financial Review
Revenues
Revenues totalled USD 591.7m in 2005 compared to USD 617.7m in 2004. The decrease of USD 26.0m was related to the partial sale of LauritzenCool and a scheduled reduction of vessel days in Lauritzen Bulkers, partly off-set by increase in Lauritzen Kosan’s and Lauritzen Tankers’ revenues, cf. Figure 4.
Lauritzen Kosan’s revenues were USD 113.5m, up USD 20.8m as a result of improved market conditions.
Lauritzen Tankers generated USD 19.3m in revenues, up from USD 1.3m in 2004.
Other operating income amounted to USD 4.4m, compared to USD 14.1m in 2004.
Costs
Hire of chartered vessels amounted to USD 256.8m, up USD 37.0m from the USD 219.8m reported in 2004, mainly due to increased charter hire and effects of sale-and-lease back transactions.
Operating costs of vessels were USD 34.5m, up from USD 30.0m in 2004, primarily due to increased own and bareboat chartered fleet.
Other operating costs including bunkers, port expenditures and other voyage-related costs amounted to USD 53.1m in 2005 down from USD 56.8m in 2004. The decrease was mainly due to the reduction of vessel days.
Total payroll and other administration costs totalled USD 65.1m, down from USD 82.3m in 2004 mainly as a result of the partial sale of LauritzenCool.
Result before depreciation (EBITDA)
EBITDA amounted to USD 186.6m compared to USD 243.0m in 2004, cf. Figure 5.
EBITDA for Lauritzen Bulkers fell from USD 193.0m in 2004 to USD 130.8m in 2005 primarily due to the softening of the bulk market, whereas EBITDA for Lauritzen Kosan increased from USD 27.1m in 2004 to USD 33.0m in 2005 as a result of better trading conditions.
At USD 24.5m, EBITDA for Lauritzen Reefers was down USD 6.5m on 2004 due to the partial sale of LauritzenCool, although this was partly off-set by an increase in earnings on own as well as chartered vessels.
EBITDA for Lauritzen Tankers amounted to USD 6.8m compared to USD 0.5m in 2004.
Depreciation and sale of vessels
Three bulk carriers, three gas carriers and seven reefer vessels (of which three were financially leased) were sold in 2005 generating a profit of USD 52.7m. In 2004 three bulk carriers and two gas carriers were sold generating a profit of USD 22.2m.
Depreciation amounted to USD 25.6m, down from USD 35.1m in 2004. The decrease was due partly to the sale of vessels and partly to a change in the accounting estimate regarding service life and scrap value of vessels.
Net results in associated companies totalled USD 17.7m compared to USD 11.4m in 2004, and was mainly related to vessels owned in joint ventures, i.e. Handyventure (co-owned with Island View Shipping) and Maryse Shipping (co-owned with Exmar), but also JL’s share of the result in NYKLauritzenCool.
Financial items
Net financial income totalled USD (0.1)m, up from USD (2.3)m in 2004 due to improved cash generation and repayment of loans.
Figure 4: Revenues 2001-05
Figures for 2003 and earlier have not been adjusted in line with current accounting policies.
Figure 5: Selected key figures 2001-05
Figures for 2003 and earlier have not been adjusted in line with current accounting policies.
Tax and results
Result before tax was USD 231.6m, down from USD 239.2m in 2004.
Income tax amounted to USD (21.2)m compared to USD (39.9)m in 2004.
The result for the year was USD 210.4m compared to the USD 199.3m reported in 2004. The result was better than expected, primarily due to gains from the sale of vessels.
Balance sheet
Total assets were up by USD 241.5m on 2004 of USD 583.2m to USD 824.7m.
Goodwill amounted to USD 1.7m at year-end 2005 and relates to the acquisition of Quantum Tankers in 2004. Due to the 50% sale of LauritzenCool AB the remaining goodwill related hereto is included in the carrying amount of investments in associated companies.
Vessel values amounted to USD 268.1m compared to USD 337.6m in 2004, a decrease mainly related to the sale of gas carriers and reefer vessels including subleases of three financially leased vessels. All vessels are recognised at values below or equal to their utility values or broker valuations or both. Broker valuations totalled USD 445.1m.
Prepayments were up USD 62.9m to USD 72.3m due to the increased newbuilding programme, cf. p. 6.
Investments in associated companies increased to USD 44.8m, up from USD 14.9m in 2004. This related in part to the investment in NYKLauritzenCool and associated goodwill and in part to earnings by joint ventures.
The book value of vessels owned in joint ventures amounted to USD 55.2m, whereas the broker valuation of these vessels totalled USD 115.0m.
Other non current receivables amounts to a total of USD 51.8m, up from USD 12.1m in 2004 primarily due to subleases of financially leased reefer vessels.
Total shareholders’ equity was up USD 163.7m at USD 613.8m, cf. Figure 6. Return on JL’s share of equity was 39.8% compared to 58.4% in 2004.
At year-end 2005, total liabilities amounted to USD 210.9m, up USD 77.7m on 2004. Mortgage on vessels and debt concerning financial leasing including next year’s repayments, fell by USD 23.6m to USD 77.2m. Debt of USD 57.3m relating to financially leased vessels was off-set by a corresponding amount related to subleases of these vessels included in other receivables. At year-end, debt related to JL’s own fleet amounted to USD 19.9m.
Cash flow
Cash and cash equivalents amounted to USD 69.7m compared to USD 117.6m at year-end 2004.
Cash flow from operations totalled USD 217.0m, down from USD 222.3m in 2004, cf. Figure 7.
In 2005, cash flow from investment activities increased to USD (161.6)m from USD (80.3)m in 2004, mainly as a result of net investments in securities partly off-set by proceeds from the sale of vessels.
Cash flow from financing activities (loan repayments and dividends) amounted to USD (103.4)m in 2005 compared to USD (95.5)m in 2004.
Figure 6: Capital structure
USDm
Figures for 2003 and earlier have not been adjusted in line with current accounting policies.
Figure 7: Cash flow from operations
USDm
Figures for 2003 and earlier have not been adjusted in line with current accounting policies.