KCC Fourth Quarter 2024 – KCC caps off historically strong year
Image: Engebret Dahm, CEO Klaveness Combination Carriers
Oslo, 14 February 2025: Klaveness Combination Carriers (“KCC”) delivered significantly higher TCE earnings per on-hire day than standard market rates in Q4 2024, reporting EBITDA of USD 20.2 million and EBT of USD 8.6 million. With TCE earnings at 1.5x product tanker and 2.6x dry bulk [1], KCC continues to demonstrate the strong value proposition of its combination carrier concept.
CEO Engebret Dahm commented: “2024 was a historically strong year for KCC, with TCE earnings surpassing spot product tanker earnings in an exceptional year for product tankers. While earnings have fallen back following weaker product tanker and dry bulk markets in Q4 2024 and early Q1 2025, KCC’s efficient combination model is expected to deliver higher earning premiums over standard markets in 2025 than in 2024.”
KCC owns and operates 16 combination carriers built for the transportation of both wet and dry bulk cargoes. The vessels are operated in trades where they efficiently combine dry and wet cargoes with minimum ballast, capitalizing on imbalances in trade flows.
Highlights for Fourth Quarter 2024:
Q4 2024 EBITDA of USD 20.2 million (Q3 2024: USD 32.6 million) and EBT of USD 8.6 million (Q3 2024: USD 21.7 million)
Both vessel segments outperformed the product tanker and dry bulk markets in the quarter [1]
CLEANBU TCE earnings [2] of $28,027/day (Q3 2024: $38,673/day), impacted by weaker markets
CABU TCE earnings [2] of $28,988/day (Q3 2024: $29,668/day) supported by high caustic soda volume
Approximately 90% [3] of CABU wet capacity (caustic soda solution) secured for 2025, implying continued efficient trading in 2025
Q4 dividend of USD 0.10 per share amounting to USD 6.0 million (Q3 2024: USD 0.30 per share)
The decrease in EBITDA and EBT from Q3 to Q4 2024 was mainly driven by lower CLEANBU TCE earnings and more off-hire related to dry-docking. Average TCE earnings per on-hire day for the CABU vessels ended at $28,988/day [2] in Q4 2024 (Q3 2024: $29,668/day), only slightly down from Q3 despite substantially weaker underlying markets. CABU TCE earnings were supported by a high number of caustic soda solution (CSS) shipments and the fleet continued to trade efficiently with 91% combination trading and 13% ballast for the quarter. Following considerably weaker product tanker and dry bulk spot markets, less optimal trading following the dry-docking of two vessels, and IFRS 15 effects, CLEANBU TCE earnings decreased in Q4 2024 to $28,027/day [2] compared to Q3 2024 ($38,673/day).
The average fleet TCE earnings for 2024 were a record-high $35,368/day [2] (2023: $34,983/day). However, the fleet had more dry-dockings in 2024 compared to 2023 and somewhat higher costs resulting in Profit after tax for the year of USD 81.4 million, a decrease of USD 5.5 million/6% from a record strong 2023, while EBITDA was USD 126.5 million in 2024 compared to USD 134.9 million in 2023. The Return On Equity (ROE) [2] and Return On Capital Employed (ROCE) [2] were solid at 23% and 16%, respectively.
The carbon intensity (EEOI) [4] of the fleet ended at 6.6 for 2024, quite stable from 2023 and outside the 6.4 target for the year, as higher speeds and aging coatings for the CLEANBU fleet had a more negative effect than the energy efficiency measures installed in 2024.
The Board of Directors declares a quarterly dividend distribution of USD 0.10 per share (Q3 2024: USD 0.30 per share) amounting to USD 6.0 million. In total, KCC has declared shareholder distributions equaling 94% of the Adjusted Cash Flow to Equity (ACFE) [2] for the 2024 fiscal year, well above the minimum level in the dividend policy of 80%.
TCE earnings guidance [5] for Q1 2025 is $20,500-21,500/day for the CABUs and $21,500-23,500/day for the CLEANBUs, this is down compared to Q4 2024 mainly due to a seasonally very weak start of 2025 in the dry bulk markets.
[1] Standard tonnage for bulk carriers are calculated averages of Panamax and Kamsarmax earnings weighted by CABU and CLEANBU onhire days respectively. Standard tonnage for product tankers are calculated averages of MR and LR1 earnings weighted by CABU and CLEANBU onhire days respectively. Multiples are calculated by dividing KCC average TCE earnings on standard tonnage for bulk carriers and product tankers. Source: Clarksons Securities and Clarksons SIN
[2] TCE earnings $/day, ROE, ROCE and ACFE are alternative performance measures (APMs) which are defined and reconciled in the excel sheet “APM4Q2024” published on the Company’s homepage Investor Relations/Reports and Presentations under the section for the Q4 2024 report. The address to the Company’s homepage is www.combinationcarriers.com.
[3] Contract coverage includes one small fixed-rate caustic soda contract (two cargoes) concluded with subjects not yet lifted.
[4] Energy Efficiency Operational Index: Grams CO2 emitted per transported ton cargo per nautical mile for a period of time (both fuel consumption at sea and in port included).
[5] Estimate based on booked cargoes and expected employment for open capacity basis forward freight pricing (FFA).
View Q4 2024 Report
View Q4 2024 Presentation
Invitation to presentation of Q4 2024 financial results
In connection with the release of financial results for the Fourth Quarter 2024, Klaveness Combination Carriers ASA (“KCC”) will hold a webcast presentation at 09:00 CET on Friday 14 February.
To follow the webcast live go to www.combinationcarriers.com/investor-relations or copy and paste the following link to your browser: https://www.combinationcarriers.com/kcc-q4-2024-financial-results.
Questions for the Q&A session can be submitted in writing through the webcast solution during the presentation.
About Klaveness Combination Carriers ASA
KCC is the world leader in combination carriers, owning and operating eight CABU and eight CLEANBU combination carriers with three CABU vessels under construction for delivery in 2026. KCC’s combination carriers are built for transportation of both wet and dry bulk cargoes, being operated in trades where the vessels efficiently combine dry and wet cargoes with minimum ballast. Through their high utilization and efficiency, the vessels emit up to 40% less CO2 per transported ton compared to standard tanker and dry bulk vessels in current and targeted combination trading patterns.
For further queries, please contact:
Engebret Dahm, CEO
Telephone: +47 957 46 851
Liv Dyrnes, CFO & Deputy CEO
Telephone: +47 976 60 561