INCOME STATEMENT Full year Fourth quarter
(Unaudited figures 2002 2001 2000 2002 2001
in USD million)
Operating revenue 583.8 767.7 737.1 159.0 153.5
Voyage expenses -169.3 -171.4 -180.0 -46.5 -42.6
T/C (time charter) 414.5 596.3 557.1 112.5 110.9
income
Other operating -310.7 -277.2 -278.8 -80.1 -67.6
expenses
Provision for 0.0 0.0 -4.9 0.0 0.0
severance payments
Gains on sale of 28.6 63.3 18.9 6.7 1.3
vessels
Operating profit 132.4 382.4 292.3 39.1 44.6
before depreciation
Depreciation -106.9 -119.6 -103.8 -25.7 -28.9
Write-downs of 0.0 -46.3 0.0 0.0 -46.3
vessels
Operating profit 25.5 216.5 188.5 13.4 -30.6
Interest income 6.9 19.9 24.0 1.2 3.6
Interest expenses -18.9 -37.7 -40.9 -3.2 -7.1
Gains/losses on sale -0.7 3.7 -22.7 0.0 3.8
of securities
Write-downs/reversal 3.5 -22.6 0.0 3.4 -3.7
of shares
Foreign exchange 11.7 -5.8 -38.3 4.5 -3.2
gains/losses
Dividend income and
other financial -0.8 1.6 5.8 -1.1 1.0
items
Net financial items 1.7 -40.9 -72.1 4.8 -5.6
Profit before tax 27.2 175.6 116.4 18.2 -36.2
Tax -1.0 -1.1 0.4 0.1 -0.7
Profit after tax 26.2 174.5 116.8 18.3 -36.9
Minority interests 2.0 7.0 6.2 1.4 -1.3
Profit after 24.2 167.5 110.6 16.9 -35.6
minority interests
Earnings per share 0.45 2.80 1.68 0.32 -0.62
Cash flow per share 2.27 5.52 3.17 0.77 0.69
Average number of 58,629,590 62,256,759 69,689,936 57,345,406 59,730,752
shares
BALANCE SHEET
(Unaudited figures in USD million) 31/12-02 31/12-01 31/12-00
ASSETS
Intangible fixed assets 8 1 1
Tangible fixed assets 1,969 1,794 1,892
Financial fixed assets 62 53 50
Total fixed assets 2,039 1,848 1,943
Inventories 13 13 14
Receivables 98 61 91
Investments 61 58 66
Bank deposits, cash etc 166 172 281
Total current assets 338 304 452
Total assets 2,377 2,152 2,395
31/12-02 31/12-01 31/12-00
EQUITY AND LIABILITIES
Paid-in capital 286 287 287
Retained earnings 1,010 1,088 1,049
Minority interests 51 59 63
Total equity 1,264 1,434 1,399
Provisions for liabilities 30 22 21
Other long-term liabilities 837 554 819
Current liabilities 163 142 156
Total liabilities and provisions 1,030 718 996
Total liabilities and equity 2,377 2,152 2,395
RESULTS
The Bergesen group recorded an operating profit of USD 25.5 million
in 2002, (2001: USD 216.5 million). These figures include gains on
the sale of vessels of USD 28.6 million (2001: USD 63.3 million).
The group generated a fourth-quarter profit of USD 13.4 million,
compared with an operating loss of USD 30.8 million in 2001 (after
write-down of vessels of USD 46,3 million).
Freight income on a T/C basis totalled USD 414.5 million, down from
USD 596.3 million in 2001. The main reasons for the decrease were
substantially lower rates for large gas and oil tankers and higher
bunker fuel prices.
Operating expenses totalled USD 310.7 million, compared with USD
277.2 million in 2001. The USD depreciated from NOK 9.01 to NOK 6.97
and averaged NOK 7.97 during the year, compared with NOK 8.99 in
2001. The depreciation of the USD was a major factor in the increase
in operating expenses as a substantial proportion of these expenses
are incurred in NOK. Charter hire expenses and the cost of upgrading
large gas carriers to improve their chances of finding employment in
the market for clean petroleum products also played a role in this
increase.
The accounts show net financial income of USD 1.7 million after net
interest expenses of USD 12.0 million and net foreign exchange gains
of USD 11.7 million.
Profit before tax came to USD 27.2 million, compared with USD 175.6
million last year. Profit after tax was USD 26.2 million, down from
USD 174.5 million last year.
Besides the new accounting standard for fixed asset write-downs, the
accounts for 2002 have been prepared using the same accounting
policies as the annual accounts for 2001.
FLEET REPORT
The operation of the fleet was satisfactory during the fourth quarter
and there was no significant technical off-hire in the fleet beyond
scheduled maintenance. 17 vessels were dry-docked for scheduled
maintenance during the year, including four in the fourth quarter,
compared with 25 in 2001.
BREAKDOWN BY FLEET
Full year GAS TANKERS DRY BULK OFFSHORE TOTAL
(1/1-31/12)
(Unaudited 2002 2001 2002 2001 2002 2001 2002 2001 2002 2001
figures in
USD million)
Operating 330.3 388.0 142.1 271.0 68.5 58.6 42.9 50.1 583.8 767.7
revenue
Voyage -94.8 -87.8 -47.5 -58.4 -24.3 -19.4 -2.7 -5.8 -169.3 -171.4
expenses
T/C (time 235.5 300.2 94.6 212.6 44.2 39.2 40.2 44.3 414.5 596.3
charter)
income
Operating -177.3 -164.8 -70.2 -77.0 -20.0 -14.0 -28.1 -16.4 -295.6 -272.2
expenses
Charter hire -11.6 0.0 0.0 0.0 -3.5 5.0 0.0 0.0 -15.1 -5.0
expenses
Gains/losses -1.8 7.2 30.3 54.8 0.0 0.0 0.0 1.3 28.6 63.3
on sale of
vessels
Operating 44.8 142.6 54.7 190.4 20.7 20.7 12.1 29.2 132.4 382.4
profit
before
depreciation
Depreciation -57.4 -59.9 -29.0 -36.4 -13.1 -9.4 -7.4 -13.9 -106.9 -119.6
Write-downs 0.0 -46.3 0.0 0.0 0.0 0.0 0.0 0.0 0.0 -46.3
of vessels
Operating -12.6 36.4 25.7 154.0 7.6 10.8 4.7 15.3 25.5 216.5
profit
Minority 0.4 7.2 0.0 0.0 0.0 0.0 0.1 0.1 0.5 7.3
interests
T/C income 390* 502* 16.3 31.0 18.8 20.7 - - 15.1 21.6
per
day/month*
(USD 1,000)
Fourth GAS TANKERS DRY BULK OFFSHORE TOTAL
quarter
(1/10-31/12)
(Unaudited 2002 2001 2002 2001 2002 2001 2002 2001 2002 2001
figures in
USD million)
Operating 89.5 80.3 40.6 49.0 19.1 14.3 9.8 9.9 159.0 153.5
revenue
Voyage -27.0 -22.0 -12.1 -14.8 -6.8 -5.4 -0.6 -0.4 -46.5 -42.6
expenses
T/C (time 62.5 58.3 28.5 34.2 12.3 8.9 9.2 9.5 112.5 110.9
charter)
income
Operating -47.9 -41.5 -14.8 -18.3 -6.0 -3.8 -7.2 -3.4 -75.9 -67.0
expenses
Charter hire -3.5 0.0 0.0 0.0 -0.7 -0.6 0.0 0.0 -4.2 -0.6
expenses
Gains/losses 0.0 0.0 6.7 0.0 0.0 0.0 0.0 1.3 6.7 1.3
on sale of
vessels
Operating 11.1 16.8 20.4 15.9 5.6 4.5 2.0 7.4 39.1 44.6
profit before
depreciation
Depreciation -13.8 -15.2 -6.6 -8.0 -3.7 -2.6 -1.6 -3.1 -25.7 -28.9
Write-downs 0.0 -46.3 0.0 0.0 0.0 0.0 0.0 0.0 0.0 -46.3
of vessels
Operating -2.7 -44.7 13.8 7.9 1.9 1.9 0.4 4.3 13.4 -30.6
profit
Minority 0.8 -1.6 0.0 0.0 0.0 0.0 0.0 0.0 0.8 -1.6
interests
T/C income 428* 391* 21.7 21.8 19.7 17.8 - - 16.9 16.3
per
day/month*
(USD 1,000)
GAS
Bergesen's gas fleet generated an operating loss of USD 12.6 million
in 2002, compared with a profit of USD 36.4 million in 2001. Earnings
deteriorated in all segments but the downturn was sharpest for the
VLGC fleet. 12 gas carriers were dry-docked during the year, compared
with 17 in 2001.
Bergesen's VLGCs (over 70,000 cbm) generated average T/C income of
USD 382,000/month in 2002, compared with USD 612,000/month in 2001.
Only two vessels were without employment at the year-end. Charter
cover for 2003 stood at 18% at the year-end.
The market for VLGCs was brisk during the fourth quarter, thanks
partly to a seasonal upswing and partly to the situation in the crude
and products markets. High oil prices made LPG more attractively
priced than oil products like naphtha and fuel oil, which helped
boost demand. Shipments to China and Japan were also substantially up
on 2001. However, fewer LPG cargoes were available in the Atlantic as
the quarter wore on, leading to an increase in LPG prices in the
region and undermining the basis for west-east arbitrage trades,
which at times employed as many as ten vessels or more.
High levels of activity in the market for clean petroleum products
(CPPs) led to a substantial increase in rates and good chartering
opportunities for VLGCs equipped to carry CPPs. The reasons for the
high levels of activity were the same as for the rest of the tanker
market; growing demand for products for stockpiling, the threat of
war with Iraq and a shortfall in production due to a strike in
Venezuela, which led to increased import for the US and the Americas
from more distant areas. At the end of the year some VLGCs were
commanding rates of around USD 800,000/month in this market,
substantially more than could be hoped for in the LPG market.
Bergesen's VLGC pool had eight vessels employed in the CPP market at
the end of the year.
The world VLGC fleet consisted of 102 vessels at the year-end. Three
newbuilds were delivered in 2002 and four vessels were sold for
scrap. A further vessel was scrapped in January 2003 following
accidental damage. Nine newbuilds are on order: one is already
delivered with an additional seven awaiting delivery in 2003, one in
2004 and one in 2005. Bergesen's VLGC pool consists of 31 vessels, of
which Bergesen owns 20.
Bergesen's LGCs (50-60,000 cbm) generated T/C income of USD
441,000/month in 2002, compared with USD 553,000/month in 2001. All
of the vessels in the LGC pool were employed at the year-end. Charter
cover for 2003 stood at 47% at the year-end.
The market for LGCs strengthened considerably in the fourth quarter
and there was good availability of both LPG and ammonia cargoes.
Competition from VLGCs in the Atlantic eased as these vessels were
fixed on long LPG trades to the Orient. High US gas prices led to
reduced domestic ammonia production and increased imports, primarily
from Trinidad and Russia.
The world LGC fleet consisted of 20 vessels at the year-end. Three
vessels were sold for scrap during the year. Seven newbuilds were on
order at the year-end, including two for Bergesen and three for its
pool partner Solvang. Four newbuilds are due to be delivered in 2003,
two in 2004 and one in 2005.
Bergesen's MGCs (20-40,000 cbm) generated average T/C income of USD
493,000/month in 2002, compared with USD 521,000/month in 2001. The
fourth quarter brought growing availability of both LPG and ammonia
cargoes.
The world MGC fleet consisted at the year-end of 43 fully
refrigerated and 15 semi-refrigerated vessels. Four vessels were sold
for scrap during the year, including three in the fourth quarter.
Five fully refrigerated vessels and one semi-refrigerated vessel were
on order at the year-end: three for delivery in 2003 and three in
2004.
Bergesen's Handygas vessels (12,000 cbm) generated average T/C income
of USD 228,000/month in 2002, compared with USD 234,000/month in
2001, while its Igloo vessels (8-15,000 cbm) generated average T/C
income of USD 252,000/month in 2002, compared with USD 278,000/month
in 2001.
The market for semi-refrigerated vessels was weak at the beginning of
the fourth quarter but all vessels found employment by the end of the
quarter. Cargo availability increased and rates improved. There were
spot fixtures of propylene from America to Asia and spot fixtures of
ethylene from Europe to Asia. There was also a rise in LPG shipments
from northern Europe to the Continent.
Four newbuilds in the 8-15,000 cbm segment were delivered during the
year, including three with ethylene capacity, and three vessels were
sold for scrap. Ten semi-refrigerated vessels with ethylene capacity
and two vessels with pressure tanks were on order at the year-end. A
further four semi-refrigerated vessels were on order in the 6-8,000
cbm segment.
TANKERS
Bergesen's VLCC fleet generated a full-year operating profit of USD
25.7 million in 2002, compared with USD 154.0 million in 2001. These
figures include gains on the sale of vessels of USD 30.3 million in
2002 and USD 54.8 million in 2001. Average T/C income was USD
16,300/day, compared with USD 31,000/day in 2001. Two vessels were
dry-docked in 2001, compared with six in 2001. Two vessels were taken
through their fifth special survey and one vessel was sold for scrap.
The VLCC market rallied strongly in the fourth quarter. Modern
vessels commanded an average of USD 49,700/day in the spot market and
older turbine tankers an average of USD 23,200/day. There were
several reasons why the market picked up: a seasonal increase in
activity, cold weather in the West, the shutdown of nuclear reactors
in Japan, growing fears of war in the Middle East and the strike
among workers in the oil-sector in Venezuela.
The strike in Venezuela is believed to have had the single greatest
impact on demand for tankers. North America had to compensate for the
shortfall in oil imports from Venezuela by stepping up imports from
the Middle East, which had a major impact on demand for tonnage due
to the substantially longer shipping distances involved. The wrecking
of the tanker Prestige off Spain has already caused many charterers
to introduce more stringent criteria for the age and technical
standard of vessels, and the EU is considering a proposal to ban the
transportation of heavy oils on single-hulled vessels and introduce
more onerous age restrictions for tankers. Although the market for
modern VLCCs was strong, it was more difficult to find employment for
older turbine tankers and the earnings gap between modern and older
tonnage widened.
World oil consumption averaged 76.9 mb/d in 2002, up just 0.4 mb/d on
2001, and 78.7 mb/d in the fourth quarter, up 1.7 mb/d on 2001.
Non-OPEC oil production was up 1.3 mb/d on 2001, with Russia
accounting for the bulk of this increase (0.8 mb/d). OPEC's market
share excluding condensates continued to decline, falling from 35% in
2001 to 32.7% in 2002. OPEC output averaged 25.9 mb/d in the fourth
quarter, down 1.1 mb/d on 2001. Oil stocks were at their lowest level
for 26 years in the USA at the end of the year and were also low in
Europe and Asia.
38 VLCC newbuilds were delivered during the year and 33 VLCCs were
sold for scrap. A further five vessels were sold for conversion to
offshore duties. 73 VLCCs are on order, equivalent to 17.5% of the
existing fleet. 40 of these are due to be delivered in 2003, 22 in
2004 and 11 in 2005.
DRY BULK
Bergesen's dry bulk fleet generated full-year operating profit of USD
7.6 million in 2002, down from USD 10.8 million in 2001. Average T/C
income was USD 18,800/day, compared with USD 20,700/day in 2001.
Charter cover for 2003 is around 89%.
The market for large dry bulk carriers continued to improve in the
fourth quarter, fuelled by sharp growth in Chinese steel production
and high imports of iron ore into China. Japan and other Asian
nations also stepped up their imports of iron ore. Chinese steel
production grew by around 20% in 2002 to around 174 million tons, and
the country's imports of iron ore are estimated to have risen from 92
million tons in 2001 to 110 million tons in 2002. Much of the extra
iron ore imported into Asia came from Brazil, which had a favourable
impact on demand for tonnage due to the long shipping distances
involved. Grain saw a reduction in trade of about 5%, while shipments
of energy coal grew by around 1% in 2002 as high oil prices and the
shutdown of nuclear reactors in Japan led to increased use of coal
for power production.
Spot rates for modern Capesize vessels ended the year at around USD
25,000/day and 12-month T/C rates at around USD 18,600/day. 11
Capesize dry bulkers and eight Capesize combined carriers were sold
for scrap during the year and 24 newbuilds were delivered. 84 vessels
were on order at the year-end, equivalent to 14% of the existing
fleet. 30 of these are due to be delivered in 2003, 32 in 2004, 14 in
2005 and three in 2006.
OFFSHORE
Bergesen's offshore fleet generated operating profit of USD 4.7
million in 2002, compared with USD 15.3 million in 2001. Compensation
of USD 1.5 million for the cancellation of a letter of intent was
included in income in the fourth quarter.
The Sendje Ceiba boasted high levels of production regularity
throughout the fourth quarter. Subsea pumps to optimise oil
production were installed on board in the field as planned and
without any interruption to production.
The conversion of the Berge Helene into a generic FPSO unit with
production capacity of 60,000 mb/d in Singapore was completed in
January 2003. Work on finding employment for this vessel and the
Sendje Berge is continuing.
The company has submitted tenders for two contracts, each for one
vessel. These contracts are expected to be awarded during the first
half of 2003. Both contracts would require additional investments and
would not generate any revenues until 2004.
FINANCIAL INFORMATION
Bergesen had liquid assets (bank deposits, bonds, certificates and
equities) of USD 227.0 million at the year-end.
Net interest expenses came to USD 18.9 million in 2002, compared with
USD 37.7 million in 2001. Additional interest charges of USD 10.5
million relating to newbuilding contracts were capitalised during the
year and included in the cost of the vessels in question. The group
had total interest-bearing liabilities of USD 849.1 million and net
interest-bearing liabilities USD 622.1 million at the year-end.
USD 3.5 million of previous write-downs of the company's equity
holdings (excluding its own shares) was reversed during the year to
reflect the increase in their market value.
In the fourth quarter Bergesen concluded an agreement with a bank
syndicate on a USD 800 million unsecured loan facility running for
seven years with a repayment holiday for the first five. Together
with the company's existing credit facilities, this will ensure full
financing for the company's planned investment programme and
considerable financial flexibility for further expansion.
3,399,000 treasury shares from buybacks were cancelled at the
Norwegian Register of Business Enterprises in August 2002 as resolved
by the annual general meeting of 24 April 2002. Bergesen purchased a
further 2,276,650 of its own shares in the second and third quarters
(2,031,500 A-shares and 245,150 B-shares). The board intends to
propose to cancel these shares at the annual general meeting of 24
April 2003.
Excluding buybacks, the company has 57,345,406 shares in issue.
The RISK adjustment for Norwegian shareholders has been set at NOK
- -6.02 per share for 1 January 2002 (both A-shares and B-shares) and
the RISK adjustment for 1 January 2001 has been confirmed at NOK
- -3.30 per share.
OUTLOOK
The economic indicators paint a mixed picture for the US economy and
a gloomy picture for Europe and Japan but there are some rays of
light in the rest of Asia and in Eastern Europe, including Russia.
Forecasts for 2003 have been revised further downwards in recent
months and Consensus Economics now anticipates growth in the global
economy of 2.3% in 2003, compared with 1.7% in 2002.
Activity in the VLGC market is expected to be high in the first
quarter due to seasonal factors, a busy market for CPPs and high US
gas prices. The market is then likely to weaken leading into the
summer due to a seasonal drop-off in demand, the normalisation of the
short-term factors that have boosted the market recently, and growth
in the fleet due to newbuilding deliveries. The fundamentals are then
forecast to improve towards the end of the year. Scrapping of old
vessels will bring about an earlier market equilibrium recovery.
Earnings in the LGC and MGC segments are expected to be more stable
due to a better balance between supply and demand and higher charter
coverage.
The market for semi-refrigerated gas carriers has improved recently.
The upswing is due primarily to high industrial output in many Asian
nations, the need to import propylene and ethylene, and high LPG
activity. The market is expected to weaken again if activity in the
LPG market falls back.
The VLCC market performed far better than anticipated in the fourth
quarter but the fundamentals have not changed appreciably. High oil
prices, slack demand and the decline in OPEC's market share are
expected to persist. The resolution of the situation in Venezuela and
Iraq could put pressure on rates. Clarification of these issues
combined with substantial newbuilding deliveries, could send the
tanker market down towards the levels seen in second and third
quarter this year. Demand for VLCCs is not therefore expected to
change notably in 2003. The strong VLCC market has already resulted
in a wave of newbuilding orders. The volatility of the tanker market
should create interesting potential for asset trading.
The outlook for the Capesize market still seems bright. Continued
strong growth in shipments of iron ore and coal are anticipated.
However, rates may fall slightly from current levels following the
normalisation of short-term factors that have boosted the market
recently, coupled with a seasonal drop in activity in the second and
third quarters.
OPEC's production quotas are expected to keep oil prices high and so
promote high levels of offshore exploration activity. The Sendje
Berge and Berge Helene are temporarily unemployed and the company
will not convert any further tankers into offshore units until
employment has been found for these two vessels.
The board expects a higher operating profit in 2003 than in 2002, but
a significant improvement can not be expected until 2004.
CASH FLOW STATEMENT
(Unaudited figures in USD million) 31/12/02 31/12/01
Cash flow from operating activities 79.2 296.9
Cash flow from investing activities -277.4 -104.3
Cash flow from financing activities 191.6 -301.3
Net change in cash -6.6 -108.7
Cash at beginning of period 173.3 282.0
Cash at end of period 166.7 173.3
MOVEMENTS IN EQUITY
(Unaudited figures in USD million) 31/12/02 31/12/01
Equity at beginning of period 1,434 1,399
Net profit for the period 26 175
Share buybacks -47 -84
Distributed to minorities -8 -10
Dividend -58 -46
Equity at end of period 1,347 1,434
Oslo, 12 February 2003
The board of Bergesen d.y. ASA
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Copyright � Hugin ASA 2003. All rights reserved.