Profit

(Figures in parentheses refer to 2013)

Operating income increased significantly from NOK 65.5 million to NOK 80 million, with a full year of VLGC delivered toward the end of 2013, management fee for LGC newbuilds, and additional fees for commercial chartering for Aurora LPG.

The group’s result after tax was NOK 102.8 million (NOK 65.7 million). Earnings per share were NOK 4.21 (NOK 2.69). The result for the parent company was NOK 9.1 million (NOK 12.4 million).

Financial items

The group reported net financial items of NOK 6.9 million (NOK 17.6 million). The corresponding figure for the parent company was a result of NOK 9.7 million (NOK 13.6 million). The group’s securities portfolio generated a result of NOK 2.8 million (NOK 14.4 million). The group has during 2014 sold out its entire securities portfolio.

Liquidity and financial strength

At year-end, the group had liquidity consisting of cash totalling NOK 92.1 million (NOK 72 million). The securities portfolio is now sold, and therefore had a market value of NOK 0 (NOK 13.8 million). The corresponding figure for the parent company was NOK 18.8 million (NOK 21.9 million), of which the securities portfolio amounted to NOK 0 (NOK 13.8 million). Total current assets at year-end was NOK 123.2 million (NOK 144.9 million), while current liabilities totalled NOK 58.8 million (NOK 81.2 million). Long-term liabilities and obligations totalled NOK 30.5 million (NOK 16 million). For the parent company, total current assets at year-end amounted to NOK 35.6 million (NOK 38.6 million), while short-term liabilities totalled NOK 99.5 million (NOK 27.2 million). The parent company’s long-term liabilities and obligations totalled NOK 26.7 million (NOK 79.5 million). The group’s share of current assets and liabilities in ship owning companies totalled NOK 88.9 million and NOK 851.1 million respectively.

Net cash flow from operating activities was NOK 17.2 million, compared to an operating profit of NOK 101.5 million. The main difference comes from the reversal of earnings from shipping companies using the equity method, partially offset by changes in working capital.

The group’s book equity totalled NOK 849.8 million (NOK 626.1 million) at the year-end.

Taxes

The group is from 2013 part of the tonnage-tax regime through its subsidiary Clipper Shipping AS. Other companies within the group are taxed ordinary.

All the company's current interests in ships except for one, are owned under the tonnage-tax regime.

Financial risk

The group’s interests in ships that are owned through participation in general partnerships with shared liability, are primarily USD-based. Most of the revenues and the majority of expenses are in USD. Furthermore, the market value of the ships, and thus the greatest share of the assets, is priced in USD. The same applies to the financing of the ships. This entails that the real foreign currency exposure is limited in financial terms.

The group's entire fleet is financed by long-term financing at favourable terms compared with what can be achieved in the market today. The group has not entered into any contracts concerning financial derivatives or other financial instruments where there is any particular counterparty risk.

Most of the group’s liabilities consist of a share of the mortgage debt for ships that are owned through general partnerships. This is denominated in USD and priced at a floating LIBOR interest rate. In addition, mortgage debt in certain general partnerships is hedged through fixed interest rate contracts. The group has a satisfactory debt-equity ratio, and this, together with active management of the interest rate exposure, ensures that the risk associated with any change in interest rate levels is acceptable.

The group’s fleet is employed in a mix of long & short TC contracts as well as in the spot market. This is a result of a conscious strategy aimed at ensuring earnings and cash flow, while at the same time benefiting from upturns in the market. The development of the world economy makes future market prospects uncertain.

The group has 13 ships on TC contracts in excess of one year. The charterers are oil majors and major operators within the Ammonia market. Credit risk is considered to be limited. The company sees the settlement risk for the business carried out in the spot market as satisfactory.

General

The year-end accounts are based on the assumption of a going concern. In the opinion of the Board of Directors, the accounts provide a true picture of the results for the year and the company’s position at the year-end.

The group’s interests in ships are owned through participation in general partnerships, with shared liability. In Note 3 of the accounts, the income statement and balance sheet have been compiled according to the proportionate consolidation method in order to provide more detailed accounting information on the operations.

All of the group’s interests in ships are significant and they are recognised in accordance with IFRS based on the equity method of accounting.

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