Klaveness Combination Carriers (KCC) Q2 2024 earnings summary

Executive summary

• Achieved record half-year results, with Q2 2024 EBITDA of $36.2M and profit after tax of $25.1M, driven by strong product tanker and improving dry bulk markets, and exceptional CABU TCE earnings.

• 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.

• Fleet efficiency, market diversification, and flexibility remain key value drivers, enabling outperformance versus standard vessels.

Financial highlights

• Q2 2024 net revenues from vessel operations were $52.3M, EBITDA $36.2M, and profit after tax $25.1M; Q2 average fleet earnings at $38,376/day.

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

• EPS for Q2 2024 was $0.41, up from $0.30 in Q2 2023; H1 2024 EPS: $0.84, dividend per share: $0.65.

• Cash and cash equivalents at end of June 2024 were $83.3M, up $23.2M from Q1 2024; adjusted available liquidity at $100M after commitments.

• Dividend payout ratio for H1 at 77%, above the minimum policy level; return on capital employed annualized at 18% for Q2 and 19% for H1; return on equity at 27% for Q2 and 28% for H1.

Outlook and guidance

• Q3 2024 TCE earnings guidance: CABU $28,000–$29,000/day, CLEANBU $33,500–$35,500/day, with 92% and 90% of days fixed, respectively.

• Fleet time charter earnings guidance for Q3: $30,700–$32,200/day.

• High bookings for caustic soda shipments in Q4 expected to boost CABU earnings; product tanker market expected to see a seasonal upturn in Q4 and remain strong in 2025.

• Dry bulk market outlook optimistic for H2 2024, with tight supply-demand balance and potential upside in 2025; 21% of 2025 dry bulk capacity already fixed.

• Targeting 30–40% fixed-rate tanker coverage for 2025 by year-end.