Consolidated result burdened by impairments
In the first half of 2016 the Rickmers Group generated consolidated revenues of € 249.3 million, 13.9 percent lower than in the corresponding period in 2015 (€ 289.6 million). The main underlying factors are the persistently strained market situation, expiring high-margin charter contracts, follow-on charters at the prevalent low market rates, lower freight earnings, and a sharper decline in capacity utilization in the project cargo business. The Group’s operating result before interest, taxes, depreciation and amortization (EBITDA) saw a clear fall of 36.1 per cent to € 87.7 million (H1 2015: € 137.4 million), following the decline in revenues compounded by comparatively steep falls in other operating income, due in particular to exchange-rate effects. Positive effects from financial derivative instruments were overshadowed by the weak operating result and extraordinary net impairments on vessels, as reflected by the net result. Following a positive net earnings result of € 2.6 million in the first half of 2015, the consolidated net result for H1 2016 shows a € 131.5 million loss.
In the Maritime Assets business segment the Rickmers Group generated revenues of € 172.9 million in the first half of 2016 (H1 2015: € 199.6 million), and EBITDA of € 100.3 million (H1 2015: € 129.7 million). The Maritime Services segment reported revenues of € 65.2 million (H1 2015: € 58.8 million) and EBITDA of € 4.8 million (H1 2015: € 7.6 million). The Rickmers-Linie segment saw revenues of € 64.9 million (H1 2015: € 89.1 million) and reported EBITDA of € -5.3 million (H1 2015: € 2.9 million). The rating agency Creditreform maintains its CCC assessment of the Rickmers Group.
Package of measures to strengthen liquidity and finance position
The package of measures approved by the Rickmers Holding AG Management Board on 4 March 2016 and subsequently developed further is intended to counteract the weak market conditions, strengthen the Rickmers Group’s liquidity position, and reorganize the company’s debt structure. Implementation of the approved measures proceeds, and further options for action are being examined on an ongoing basis.
Core credit agreements with banks successfully extended
The Rickmers Group had already renegotiated its core bank loans amounting to USD 1.39 billion as early as February 2015. In the first half of 2016 the company reached agreement with one of its main banking partners on the early term extension to 2020/2021 respectively of a very significant part of this loan package, valued at almost USD 520 million as at the balance-sheet date of 31 December 2015.
Outlook confirmed for 2016 financial year
With the presentation of its half-year figures, the Management Board of the Rickmers Group reaffirms its forecast provided in the 2015 Annual Report, and subsequently confirmed in its earnings guidance for the full 2016 financial year provided in the first quarter. In view of the lowered forecasts for global economic growth as well as the global container trade, the Rickmers Group currently sees no sign of a macroeconomic recovery in the second half of the year. This situation is reflected by the development of charter and freight rates, which the management sees as likely to remain at their current low levels. Based on the declining development in revenues, due amongst other factors to the deconsolidation on 1 January 2016 of a joint venture comprising three 9,450 TEU container vessels, lower spot charter rates, persistently low freight rates, and falling capacity utilization in the project-cargo business, the management continues to expect an operating result (EBITDA) of Rickmers Group for the 2016 financial year clearly below the relevant 2015 figure.
Recap:
• Revenues fall 13.9 percent compared to H1 2015 to € 249.3 million
• Operating result (EBITDA) 36.1 percent lower at € 87.7 million
• Group net profit burdened by € 124 million in extraordinary net impairments on vessels
• Core credit agreements with banks successfully extended