Klaveness Combination Carriers (KCC) Q2 2024 earnings summary

Executive summary

• Achieved record half-year financial results, with Q2 2024 EBITDA of $36.2M and profit after tax of $25.1M, driven by strong MR tanker markets, robust product tanker and dry bulk markets, and efficient trading.

• Maintained high TCE earnings: CABU at $37,656/day and CLEANBU at $39,093/day, with 79% of CLEANBU days in tanker trading.

• Declared Q2 dividend of $0.30/share (~$18.1M), maintaining a consistent payout record since IPO and bringing total dividends since 2019 listing to $185.4M.

• Renewed a fixed-rate dry bulk contract out of Australia for 2025 at higher volume and rates.

Financial highlights

• Q2 2024 net revenues from operations: $52.3M, EBITDA: $36.2M, profit after tax: $25.1M, EPS: $0.41, dividend per share: $0.30.

• H1 2024 net revenues: $105.7M, up 5.8% year-over-year; H1 2024 EBITDA $73.8M, up 4.6%; H1 2024 profit after tax: $51.1M, up 14.2% year-over-year.

• Q2 average fleet earnings at $38,376/day, within the upper end of guidance.

• Cash and cash equivalents at end of June 2024 were $83.3M, with available liquidity at $208.3M, adjusted to $100M after commitments.

• Dividend payout ratio for Q2 at 92% of adjusted cash flow to equity; dividends paid in H1 2024 totaled $42.3M.

Outlook and guidance

• Q3 2024 TCE earnings guidance: CABU $28,000–$29,000/day (92% fixed), CLEANBU $33,500–$35,500/day (90% fixed), reflecting a temporary dip for CABU.

• Q4 and 2025 outlook optimistic, with high bookings and expected market upturn, especially in tanker segment.

• Forward pricing indicates market recovery in Q4 and stable conditions into 2025.

• Targeting 30–40% fixed-rate tanker coverage for 2025 by year-end; 21% of 2025 dry bulk capacity already fixed.

• Company aims to maintain high profitability and dividend yield, distributing minimum 80% of adjusted cash flow to equity as dividends.