Klaveness Combination Carriers (KCC) Q4 2023 earnings summary

Executive summary

• FY 2023 EBITDA reached a record $134.9m, up 26.2% YoY; average fleet TCE earnings rose 17.5% to $34,983/day.

• FY profit after tax reached a record $86.9m, up 42.8% YoY; Q4 profit after tax was $25.9m.

• CABU and CLEANBU exceeded expectations in Q4 amid stronger tanker markets and improving dry bulk conditions.

Financial highlights

• Q4 vessel operating revenue was $53.1m, EBITDA $36.5m and EBIT $29.1m; EBITDA rose 30.9% QoQ, driven by stronger CLEANBU TCE earnings and more on-hire days.

• Q4 profit after tax was $25.9m, up 58.7% QoQ; basic EPS was $0.43 versus $0.27 in Q3 and $0.29 in Q4 2022.

• FY vessel operating revenue was $196.8m, EBITDA $134.9m and EBIT $103.1m, up 19.6%, 26.2% and 36.4% YoY, respectively.

• FY profit after tax was $86.9m, up 42.8% YoY; basic EPS was $1.52 versus $1.16 in 2022.

• Q4 net finance cost fell $0.5m QoQ, mainly on positive FX and derivative fair-value movements, partly offset by higher net interest cost.

Outlook and guidance

• Q1 2024 TCE guidance: CABU $32,000–$33,000/day, CLEANBU $48,000–$50,000/day and fleet average $40,000–$41,500/day, with 90% of days fixed for each measure.

• As of 15 February 2024, wet contract coverage was 68% operationally and 46% fixed-rate; dry bulk coverage was 46% operationally and 26% fixed-rate.

• 2024 caustic soda contracts covered near-full CABU wet capacity; ~40% of secured contract days had fixed rates and ~60% were index-linked.

• CLEANBU tanker trading is expected to remain 60%–70% over coming quarters; one vessel is on time charter through February 2025.

• Product tanker prospects were strong and dry bulk outlook moderately positive; market volatility and Chinese dry bulk demand growth remain uncertainties.