MPC Container Ships ASA reports Strong First Quarter results
Q1 and three-month 2022 results:
MPC Container Ships ASA published its unaudited financial report for the three-month period ended 31 March 2022.
• Total revenues of USD 142.9 million in Q1 2022 (Q1 2021: USD 54.9 million).
• EBITDA of USD 137.7 million in Q1 2022 (Q1 2021: USD 22.3 million).
• Net profit of USD 116.8 million in Q1 2022 (Q1 2021: USD 3.5 million).
• Adjusted EBITDA of USD 97.8 million and adjusted net profit of 76.9 million in Q1 2022.
• Earnings per share of USD 0.26 in Q1 2022 (Q1 2021: USD 0.01).
• Utilization of 98.8% in Q1 2022 (Q1 2021: 99.2%).
• Average time charter equivalent (“TCE”) of USD 24,845 per day in Q1 2022 (Q1 2021: USD 10,502 per day).
• Cash and cash equivalents of USD 81.5 million as at 31 March 2022.
• Equity ratio of 70.2% and leverage ratio of 22.9%.
As at 31 March 2022, the Group owns and operates 65 container vessels, whereof 60 are fully owned and 5 are operated in a joint venture. Furthermore, the Group has 2 newbuilds on order expected for delivery in Q1 2024.
CEO Constantin Baack comments in relation to the announcement: “We are pleased to report another strong quarter for MPC Container Ships, in which we have been able to sustainably grow our earnings and profits. Consequently, the Company announces a recurring dividend for the first quarter 2022 which is 18% higher than in the previous quarter.
For Q1 2022 the board has declared a dividend of total USD 71 million, or USD 0.16 per share which includes an event driven dividend of USD 0.03 per share. Year to date, MPCC has declared a total of USD 271 million in dividends, of which USD 200 million have already been paid during the first quarter, emphasizing our commitment to return capital to our shareholders.
On the back of high chartering activity throughout the first quarter we have been able to secure 23 additional, predominantly multi-year charters, including numerous strategic forward fixtures, with coverage into 2026. As a result, our revenue and projected EBITDA backlog has increased to USD 1.7 billion and USD 1.4 billion, respectively.
Following our approach of rational capital allocation and taking a strategic long-term view, we have executed a unique opportunity by ordering two 5,550 TEU wide beam eco-design newbuildings, which are ready to be converted to operate on green methanol once such fuel is widely available. These vessels come with highly attractive charters attached, demonstrating our ability to develop and execute transactions that are both accretive in terms of earnings and environmental footprint in line with upcoming decarbonization regulation. Moreover, it supports our long-term earnings visibility, without compromising on our short- and mid-term dividend capacity.
While the global economy currently faces uncertainties like geopolitical tensions, inflation and China’s zero Covid-19 policy, we are also concerned about our seafarers and their families being innocent third party in the tragic situation in the Ukraine, and we are doing our utmost to take care of both Ukrainian and Russian seafarers and their families.
The container charter market continues to be strong with the availability of vessels remaining tight. Yet, due to the uncertainties, freight rates and time-charter rates took a little breather in Q1 but are still at significantly elevated levels. Charter periods are prolonged and most fixtures are concluded months in advance. Congestions and supply chain disruptions continue to be severe and are likely to continue in the foreseeable future. We do not expect that supply chains will be back to normal within this year.
Despite the fact that the industry will face a number of newbuild deliveries in 2023 and 2024, especially in the larger size classes, supply-demand outlook for regional trades, and thus smaller vessels, is continuously promising due to a modest orderbook and relative robust demand growth. In addition, the industry must adopt new environmental regulations as of 2023 that are expected to induce speed and thus capacity reductions, especially in regional niche trades.
Amid the current macro-uncertainty, MPCC is excellent positioned to continue to execute our strategy and follow our approach of rational capital allocation, combined with proven execution capabilities. We will continue to apply our investment principles that aim at generating double-digit full cycle returns on assets while minimizing residual value risk.
Based on our strong earnings prospects and secured cash flows, MPCC has the potential to pay out significant dividends, and at the same time operate with an industry low financial leverage, providing the financial flexibility to capture attractive growth opportunities as they arise.”
The above information is subject to the disclosure requirements pursuant to section 5-12 of the Norwegian Securities Trading Act.
Source: MPC Container Ships ASA