Financial / key figures
Grieg Star has a strong profitability track record and a solid balance sheet with a healthy equity ratio and with strong financial relations.
Improved market conditions together with increased synergies from the G2 Ocean JV, contributed to better earnings in 2018. After the market bottomed out in 2016, the result from the group’s conventional dry bulk activities returned back to black. Open hatch experienced also an improvement in earnings, through amongst others renewal of cargo contracts. With the break bulk terminal in Canada no longer being considered part of the group’s core business, a sale was concluded first half 2018. Grieg Green reinforced on the other hand, its position as a sustainable recycling player, delivering record revenues and earnings. Despite overall improved earnings, including positive returns on the group’s financial portfolio, Grieg Star recorded a deficit in 2018 as expected, as the shipping market recovery progresses slowly.
Total operating costs decreased in 2018, to USD 163.8m compared to USD 176.0m in 2017, primarily as a result of the business returning to more normal operations, as the 2017 figures were influenced by setting up G2 Ocean. The vessels’ operating expenses at USD 67.6m, which is the single largest cost element in Grieg Star, increased with USD 1.6m compared to 2017. This was partly due to an increase in the number of ships managed, which hiked from 33 to 34 vessels, when Grieg Star bought the 2009 built semi-open hatch vessel Star Majesty in September 2018. Besides this, higher vessel operating costs mainly came as a result of increased provisions for dry dockings, as several vessels were dry docked for their first time. This more than out-weighted savings on several other cost elements. The cost of hiring vessels was unchanged at USD 35.5m (USD 35.4m), as vessels chartered in long term stayed the same. Despite of acquiring one additional vessel, depreciation charges were down to USD 41.2m (USD 45.2m), as the 2017 figure was extra ordinary high due to accounting effects from establishing G2 Ocean. Administration and payroll costs also decreased, down to USD 19.7m (USD 26.1m), as the 2017 number included almost USD 10m in oneoff costs related to the restructuring of Grieg Star when starting up G2 Ocean. Finally, 2018 operating costs were positively affected by USD 3.0m (USD 6.3m), being a reversal of a previous loss provision related to time-charted long-term dry bulk vessels.
In total, Grieg Star’s result before tax ended at USD minus 16.3m in 2018 (USD -30.6m). The result after tax is minus USD 16.1m in 2018 (USD – 30.2m).
See the whole annual report in the list to the right.