Odfjell SE - Chemical Tanker Industry Update
Efficient capital structure
Debt
Equity
LTV & Equity ratio
Financial targets
Break-even
FCF to equity
ROIC
Long-term priority
Free cash flow should improve in 2021 after completion of newbuilding deliveries -
Lower debt repayments are a key to increase free cash flow to equity
Annual free cash flow
Cash flow from operations
Cash flow from investments
Annual free cash flow to equity***
Cash flow operations
Debt amortisations
Adj. CF from investments
Free cash flow to equity to changes in freight rates
and debt structure
48
200
180
200
126 126
27
33
150
24
150
3
70
123
5
100
28
126
151 151
100
50
94
98
160
163
57
54
43
123
132
50
0
94
98
-24
-26
-25
-25
54
43
-50
-99
-123
0
-25
-24
-24 -16 -30
-25 -25 -25
24
-100
-202
-56
-50
-150
-25
-90 -93 -105-108
-99
-104-108 -105
-100
0
-200
-76
-21
-150
-76 -81
-31
-250
2015 2016 2017 2018 2019 2020* 2021**2022**
2015 2016 2017 2018
2019 2020* 2021** 2022**
Free Cash
flow to equity
(2020)*
Freight rate
(A1.000/day)
Lower B/E
Total sensitivity
(A1,000/day) to FCF to Equity
O Free cash flow in recent years impacted by
newbuilding deliveries
O Zero capex from 2021 and onwards to
improve free cash flow generation
Our debt amortisation makes free cash flow after debt
repayments a more relevant parameter
O The lower capex is set to improve our free cash flow to
equity in the years to come
Assuming TCE rates reaches last 5-year average, Free
Cash flow to equity reaches USD 27 - USD 33 mill in
2021/22
* Includes annualised 1Q20 operating cash flow less 2020 newbuilding capex and annual docking/other capex of USD 25 mill per year
** Cash flow from operations reflecting average TCE rates 5 years
And our free cash flow to equity is highly
sensitive to improved freight rates lower break-even
USD 48 mill of free cash flow to equity to be
generated for every USD1,000/day higher freight
rates and every USD1,000/day lower break-even
costs
*** Free cash flow to equity calculated by operating cash flow less investment cash flow less debt amortisations. Investment capex adjusted for non-recurring items like sales gains received from JVs and newbuilding instalments
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