Issue No. 7, September 2007 - J. Lauritzen

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4 Very satisfactory half-year results 2007 JL’s result for the first six months of 2007 was USD 132 million compared to USD 60 million in 2006. The result is better than expected and very satisfactory. The improvement compared to 2006 was primarily driven by a substantial strengthening of the bulk market, increasing activities within JL’s product tanker division, and gains on securities. Earnings in Lauritzen Kosan and Lauritzen Reefers were better than expected but lower than last year due to lower profit from sale of vessels and for Lauritzen Kosan particularly due to the sale of the small gas carrier activity towards the end of 2006. The newbuilding programme further increased to a total of 50 vessels, including 19 vessels that will be taken on longtime time-charter. Furthermore, joint venture partners will add another 15 newbuildings to the JL-managed fleet. During the first half of 2007, JL’s 50% shareholding in NYKLauritzenCool was sold to joint-venture partner NYK Reefers Ltd. As consequence of the transaction, JL will leave the reefer market (see article on page 10). Invested capital (average) 1H USDm 800 600 400 200 0 Bulk Gas Tank Reefer JL 2006 2007 Fleet During the first six months of the year, JL took delivery of two Handysize bulk carriers, two MR product tankers (one of which was sold at delivery), and one 8,000 cbm ethylene gas carrier (the first of a series of six sister vessels). Additionally, JL took delivery of four long-term time-chartered product tankers and one Handysize bulk carrier. Year-to-date, investments in 15 fully or part-owned vessels were approved, as were divestments in five vessels and other assets. After the exit from the reefer business, JL controls a combined fleet of about 130 vessels at the beginning of August 2007. Based on current commitments, a total of 65 newbuildings will be added to the fleet during the coming years, bringing the total fleet to 195 vessels. Invested capital During the first half of 2007, invested capital increased by USD 255 million compared with the same period last year. Average invested capital was USD 695 million, of which USD 291 million relates to Lauritzen Bulkers, USD 265 million to Lauritzen Kosan, and USD 140 million to Lauritzen Tankers. JL’s newbuilding commitments total about USD 1.3 billion. In addition, JL’s investment capacity amounts to about USD 1 billion. Lauritzen Bulkers The result before tax was USD 114.4 million compared to USD 34 million in the same period last year. The result is considerably better than expected. Towards the end of the first half of 2007, Lauritzen Bulkers ordered four Capesize bulk carriers, further strengthening its presence in this segment of the bulk market. Lauritzen Kosan During the first half of the year, Lauritzen Kosan realised a result before tax of USD 7.2 million compared to USD 16.9 million in the same period last year. The result is better than expected. The first of a series of innovative 8,000 cbm ethylene gas carriers was delivered in May. A further nine identical vessels will be delivered during Key figures 1st Half Total Year 2007 2006 2006 (USD million) Actual Actual Actual Lauritzen Bulkers 114,4 34,0 93,4 Lauritzen Kosan 7,2 16,9 38,3 Lauritzen Tankers 13,6 1,6 3,8 Lauritzen Reefers 9,9 16,2 13,2 Landbased activities (0,2) (1,2) (3,7) Other (7,6) (1,3) (8,7) Result before tax 137,3 66,2 136,3 Tax and minorities (5,8) (6,3) (11,9) Net result 131,5 59,9 124,4 Cash and securities 10,3 104,4 48,6 Long-term debt, total 44,8 68,1 49,9 Equity (excl. min.) 782,3 614,4 679,8 Total assets 991,8 755,9 929,7
the coming years, five of them owned by Lauritzen Kosan and four by jointventure partners. Lauritzen Tankers The result before tax was USD 13.6 million compared to USD 1.6 million in the same period in 2006. The result is better than expected. During the summer, Lauritzen Tankers ordered six additional products tankers, further strengthening the fleet build-up in the MR product tanker market. Lauritzen Tankers’ newbuilding programme comprises 12 owned and timechartered vessels. Lauritzen Reefers The result before tax was USD 9.9 million compared to USD 16.2 million in the same period in 2006. The result is in line with expectations. In connection with the 50% sale of NYKLauritzenCool, JL’s portfolio of time-chartered reefer vessels was transferred to NYKCool AB. Four reefer vessels will, however, remain on bareboat charter to Lauritzen Reefers and be commercially operated by NYKCool Total fleet (August 2007) Owned 34 Part-owned 14 T/C 39 Pool 28 Joint charters 12 Comm. mngt. 4 Total 131 N/B (own) 31 N/B (T/C) 19 N/B (partners) 15 Key figures Return on invested capital for the first six months of 2007 was 34.5% compared to 27.7% in the same period in 2006. Return on equity was 37.7% compared to 19.6% in the same period in 2006. Solvency was 78.9% compared to 81.3% last year. Outlook Due to the continued strong global economy and the overall positive outlook for JL’s business activities, the net result for 2007 is expected to be substantially higher than earlier estimated and the best in the history of JL. Lauritzen Kosan newbuilding programme enters into delivery phase. Past issues of this magazine have provided progress reports on Laurtizen Kosan’s extensive newbuilding project of ten ethylene gas carriers being built at INP shipyard in Ulsan, Korea. The first of these, the Isabella Kosan, was delivered on 31 May. After extensive sea and gas trials, she sailed from Korea to Iran to load her first cargo. “All the tests went very well,” says Jan Kastrup-Nielsen, president of Lauritzen Kosan, “which is as we expected. But when you’ve spent so long reviewing diagrams and drawings, it’s always a relief when a cargo is actually loaded.” The next ship in the series, the Helena Kosan, is due to be delivered early September. All ten of the vessels are scheduled to be completed and delivered by 2009. 5
Page 1 and 2: OCEANS OF KNOW-HOW September 2007 A
Page 3: Dear Reader, The ability to handle
Page 7 and 8: e ing alert are fully confident wit
Page 9 and 10: The average amount of money awarded
Page 11 and 12: “J. Lauritzen has enjoyed a stron
Page 13 and 14: A Capesize milestone Lauritzen Bulk
Page 15 and 16: While allotment gardens in the past
Page 17 and 18: ing and discharge ports and determi
Page 19 and 20: An immediate success The 2006-2007

Issue No. 7, September 2007 - J. Lauritzen

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