Financial review
Revenues totalled USD 657.4m in 2007 compared to USD 459.5m in 2006 due mainly to the substantially stronger bulk market. The effect of exiting the reefer business, the sale of shore-based activities and the disposal of the gas carrier fleet below 3,000 cbm at the end of 2006 was off-set by an increase in revenues from larger gas carriers, the continued expansion of the product tanker fleet and net gains on Forward Freight Agreements (FFAs).
Hire of chartered vessels amounted to USD 228.6m, up from the USD 219.1m in 2006. The increase was mainly due to more product tankers taken on charter and an increase in charter rates for bulk carriers, partly off-set by a decrease due to exiting the reefer segment.
Operating costs of vessels totalled USD 56.2m, up from USD 43.1m in 2006 due to the increased number of owned vessels and to higher operating costs. Other operating costs including bunkers, port expenditures and other voyage-related costs amounted to USD 37.1m, which was in line with 2006.
Office and fleet staffing costs and other sales and administrative costs totalled USD 89.9m, up from USD 73.4m in 2006 as a result of the increased headcount ashore and at sea, higher payroll and the impact of the falling USD exchange rate.
EBITDA amounted to USD 262.5m, up from USD 100.1m in 2006, due mainly to the stronger bulk market but results also benefited from contributions from other business areas.
The sale of three bulk carriers, one gas carrier, two product tankers and a reefer vessel and other assets generated gains of USD 79.1m. In 2006 two bulk carriers, nine gas carriers and one reefer vessel were sold generating gains of USD 43.7m. Depreciation amounted to USD 34.2m, up from USD 27.2m in 2006 due to increased investments in vessels.
Net result in associated companies totalled USD 24.4m compared to USD 9.7m in 2006. The increase mainly related to investments in bulk carriers owned by partnerships. Net financial income totalled USD 22.7m, up from USD 9.2m in 2006 primarily due to gains on securities and partly off-set by increased financing costs.
Result before tax was USD 352.0m, up from USD 136.3m in 2006. The income tax was USD (4.9)m compared to USD (10.8)m in 2006.
The result for 2007 of USD 347.1m, up from USD 125.6m in 2006, was better than expected, primarily due to earnings in the strong bulk market.
Balance sheet
At year-end 2007, total assets amounted to USD 1,404.9m up by USD 475.2m from USD 929.7m in 2006 as a result of substantial investments in vessels. Vessel values amounted to USD 486.2m up USD 91.8m on 2006. All vessels are recognised at values below or equal to their utility values or broker valuations. Broker valuations totalled USD 1,031.2m.
Prepayments on vessels amounted to USD 495.9m (35% of total assets) up USD 284.5m from USD 211.4m compared to 2006 (23% of total assets).
Investments in associated companies increased to USD 64.9m, up from USD 48.9m in 2006. The increase was mainly due to net investment in vessels owned by partnerships partly off-set by the sale of the remaining holding in NYKLauritzenCool AB. Broker valuations of vessels owned by partnerships totalled USD 570.1m compared to their book value of USD 243.4m.
Other non-current receivables amounted to a total of USD 38.3m compared to USD 40.3m in 2006. These were mainly due to subleases on three financially leased reefer vessels and one reefer vessel sold on financial leasing terms.
Total shareholders’ equity was up USD 309.8m at USD 996.0m. Return on JL’s share of equity was 40.9% compared to 19.3% in 2006.
At year-end 2007, total liabilities amounted to USD 408.9m, up USD 165.3m on 2006. Financial leasing debt including next year’s repayments fell by USD 8.9m to USD 40.2m, whereas bank debt increased to USD 296.7m from USD 109.3m in 2006. The leasing debt for the three subleased reefer vessels is off-set by a corresponding leasing receivable recorded under other receivables.
Cash flow statement
Cash and cash equivalents amounted to USD (209.0)m compared to USD (55.7)m at year-end 2006.
Cash flow from operations totalled USD 190.6m, up from USD 80.0m in 2006. In 2007 cash flow from investment activities increased to USD (306.8)m from USD (137.2)m in 2006, mainly as a result of increasing investments in JL’s own vessels and in vessels owned by partnerships.
Cash flow from financing activities (loan repayments and dividends) amounted to USD (37.3)m compared to USD (68.0)m in 2006.
