1 January–31 December 2016

Total income, Q4: SEK 278.5 (274.2) million
Full year 2016: SEK 1,038.2 (1,086.7) million
EBITDA, Q4: SEK 108.4 (117.3) million
Full year 2016: SEK 319.9 (423.8) million
Result before tax, Q4: SEK 33.5 (49.8) million
Full year 2016: SEK 56.9 (174.4) million
Result per share after tax, Q4: SEK 0.72 (1.03)
Full year 2016: SEK 1.46 (3.64)

Events in the fourth quarter

Profitable quarter despite weak markets.
Sale and leaseback agreement for IMOIIMAX tanker Stena Image signed in October.
Sale and leaseback agreement for suezmax tanker Stena Supreme signed in December.
Refinancing of P-MAX tankers completed in November. Total refinancing was USD 189 million, which, after financing costs, is in line with previous loan amounts.
Another quarter without any lost time injuries.
The Board will propose to the AGM a dividend of SEK 0.5 per share.

Key ratios

	Q4 (Oct-Dec)		Full year
	2016	2015	2016	2015
Total income, SEK million	278.5	274.2	1,038.2	1,086.6
EBITDA, SEK million	108.4	117.3	319.9	423.8
EBITDA, USD million	12.2	13.9	37.4	50.3
Operating result, SEK million	47.5	57.6	82.7	209.6
Result before tax, SEK million	33.5	49.8	56.9	174.4
Result after tax, SEK million	34.3	49.4	69.5	173.9
Equity ratio, %	50	43	50	43
Return on equity, %	3.6	10	3.6	10
Available liquid funds, including unutilised credit facilities, SEK million	507.4	367.1	507.4	367.1
Result per share after tax, SEK	0.72	1.03	1.46	3.64
Equity per share, SEK	43.78	39.15	43.78	39.15
Lost-time injuries	0	0	0	0

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Kim Ullman

CEO, Concordia Maritime

Profit again and well positioned for the future

Niche trades, ship sales and other non-recurring income brought a relatively strong result for the full year. Overall, we are able to report a profit before tax of SEK 56.9 (174.3) million for the year. EBITDA was SEK 319.9 (423.8) million, corresponding to USD 37.4 (50.3) million. Result before tax for the fourth quarter amounted to SEK 33.5 (49.8) million. EBITDA was SEK 108.4 (117.3) million, corresponding to USD 12.2 (13.9) million.

As we look back on the market’s development over the last year, we can see that it was largely as we had expected. The year started well, with a generally strong first and second quarter, but the markets for tanker transportation began to weaken in the third quarter due to high inventory levels for both crude oil and oil products and extensive ship deliveries.

The markets started their seasonal upturn towards the end of the fourth quarter, but this was not enough to compensate for the weak summer and autumn. This resulted in average freight rates being considerably lower than in the previous year.

For our own part, we continued to work during the year to position and deploy the P-MAX vessels in trades and cargo systems where their unique properties are most beneficial. This strategy contributed to our income being higher than the market average in the MR segment in every quarter of 2016. On an annual basis, we exceeded the market by about 35 percent.

In view of the expected market situation, we decided to charter out several vessels on longer contracts this year. Given developments in the spot market, the timing here proved absolutely right. The income levels for these contracts have been considerably higher than the rates on the spot market.

As previously announced, we entered into sale and leaseback agreements for Stena Image and Stena Supreme during the quarter. The vessels will be chartered back on a bareboat basis (i.e. without crew), with annual repurchase options starting in years four and three respectively. The transactions are producing a significant positive cash effect and an improved equity ratio, while enabling us to continue our business strategy of employing the vessels in their respective pools for several years to come. The transactions have opened the door to new forms of financing, while also representing an effective way of preparing ourselves for a subdued market situation. They also create the scope for us to take advantage of good business opportunities that will arise in such a market.

Reduced environmental impact and no incidents

As we look back on the year, it should also be noted that once again there were no serious incidents or accidents on any of our vessels in 2016. We have also continued our efforts to reduce vessel-related environmental impacts. The major focus here is on reducing emissions into the sea and air. Carbon dioxide emissions fell by more than 5,200 mt and sulphur oxide emissions by 39 mt in 2016.

Market outlook

The high inventory levels will almost certainly continue to have a dampening effect on the overall market development in 2017. At the same time, the current slump in ship orders will eventually contribute to a better balance in the market. Tanker shipping is a volatile market and the fluctuations are tending to come at an ever-increasing speed.