Financial Results for 2009
The 2009 economic crisis that had developed into a global recession and triggered an unprecedented severe fall in global trade by 10 percent as compared to 2008 has not spared the shipping industry in general. The industry and thus also herning shipping and its business segments likewise were hit by massive falling freight rates throughout this period.
The 2009 effects of such global recession to the shipping Industry were an instant surplus of tonnage capacity and a considerable nervousness in all spot market trades due to a large order book for all vessel types around the world. Such effect of freight rate volatility (with average fall of 40 percent) to herning shipping specially on our niche market – Short Sea Shipping trade - was a first time in our Company’s long history. With the collective efforts of our Company’s staff, we were able to weather the rough situation and perform considerably better than the market.
2009 is not all about bad markets and financial difficulties. Our team rose to various challenges and achieved good results. The MLC 2006 Statement of Compliance is one of them. Our Operational records also speak highly of our high standards. We had no registered Lost Time Injuries (Lost Time Injuries Frequency is zero) and no oil spills related to our more than 1,600 port operations performed by our owned vessels in 2009. A remarkable record indeed for last year.
The Board of Directors and Top Management of the Company are extremely pleased with the high operational performance and safety culture of the Fleet. The Company has again shown its first class global competitiveness to achieve a new Certification, in this case the MLC 2006 Statement of Compliance. ”We continuously aspire to be at the very forefront of development within the group of quality shipowners”, Lars Vang Christensen, CEO, says and continues: ”The freight rates and the activity level within our business segments in 2009 did not turn out as we expected and the 2009 results are very unsatisfactory”.
The herning shipping group’s EBITDA totalled EURO 2.8 mill compared to EURO 18.5 mill in 2008, and profits after tax amounted to a loss of EURO 16.2 mill compared to a profit in 2008 of EURO 6.8 mill. The Results of the year were negatively impacted by an extraordinary loss relating to costs accrued during the building of a newbuilding which was cancelled immediately prior to its delivery and by costs relating to the positioning of newbuildings from the Far East into Europe.
The annual report for 2009 is made in EURO. However, effective as from 1st January 2010 herning shipping has changed its reporting currency to USD, and thus future Annual Reports will be made in USD accordingly.
In 2009 herning shipping took delivery of 5 newbuildings and sold 3 older vessels, and the average fleet age was further reduced in consequence thereof. By the end of 2009 the operated fleet counted 39 vessels with an average fleet age of 3.5 years. Thus, the fleet operated by herning shipping is one of the absolutely youngest and most modern IMO II fleets within the product and chemical tanker markets and within our niche.
During 2009 the herning shipping group managed to reduce and replace a large part of its fleet of timecharter vessels. End year the tonnage under the Company’s control counted 245,000 DWT.
Operating a modern quality tanker fleet, herning shipping feels well-positioned for a successful future not only in its present market but also in relation to the important issues environment, climate and safety awareness.
With the projection of a positive recovery of the global economy and an increased number of old tonnage that is being phased out and sent for scrapping, herning shipping expects that during 2010 and 2011 freight rates will gradually stabilize on a more sustainable and normalized level.
Thus, herning shipping anticipates considerably improved results for year 2010. Gaining from converting loans from EURO to USD combined with the operational results the Group has achieved a net profit for the first four month of the year.
At the ordinary general meeting managing director, Morten Kristoffer Larsen did not seek re-election as member of the Board of Directors. Technical Director, Tom Bach Mortensen was elected new member of the Board of Directors.
Herning, 31st May 2010
Lars Vang Christensen, CEO
For further information please contact Lars Vang Christensen, CEO, tel. +45 9626 6645.
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