Broström is one of the leading logistics companies for the oil and chemical industry, focusing on industrial product and chemical tanker shipping and marine services. Broström is based worldwide and operates within two areas: Shipping and Marine & Logistics Services. Broström’s head office is located in Göteborg, Sweden.
Press Release INTERIM REPORT 1 JANUARY - 30 JUNE 2006 Broström AB (publ) – Reg. no. 556005-1467
•
Volatile freight market during first half of the year -
-
•
Profit after net financial items for the first six months SEK 375 m (347) -
•
Cash flow per share SEK 11.88 (12.24). Disposable liquidity amounted to SEK 1,113 m (1,295 on 31 December 2005). The dividend payout was SEK 261 m.
Change in transport capacity during the second quarter -
•
Net sales SEK 767 m (986, of which 163 pertains to sold subsidiaries). Profit after tax SEK 61 m (155). Earnings per share SEK 1.87 (4.73).
Cash flow and disposable liquidity -
•
Net sales SEK 1,720 m (1,747, of which 269 pertains to sold subsidiaries). Profit after tax SEK 317 m (292). Earnings per share SEK 9.61 (8.90). Return on capital employed 13.4% (16.7%).
Profit after net financial items for Q2 SEK 65 m (186) -
•
2006 started with a strong freight market, but a sharp downturn occurred towards the end of the first quarter and continued during most of the second quarter. On account of Broström’s strong reliance on contracts of affreightment and thus the long scheduling of the fleet, the downturn in the freight market during the later part of the first quarter did not affect earnings until the second quarter. The close of the second quarter and start of the third quarter have been characterised by an improvement in the freight market, which for large tonnage has been considerable.
The newly built vessels BRO DELIVERER and BRO DESIGNER were delivered during the second quarter.
Outlook for 2006 The start of the third quarter of 2006 has, despite the seasonal downturn, been characterised by a strengthening in the market in Broström’s segment, which for large tonnage has been considerable. Structural changes in the market and widening regional imbalances are giving rise to a continued greater need for transport in Broström’s segment. The outlook for 2006 as a whole continues to be favourable.
1
6 months SEK m
Second quarter
Full year
2006
2005
2006
2005
2005
1,720.3
1,746.8
767.4
986.4
3,818.1
Operating profit (EBIT)
463.7
381.6
112.7
198.6
812.4
Profit after net financial items
375.0
347.1
64.9
185.5
720.1
Profit for the period
316.6
291.6
60.6
155.3
622.9
Investments
898.2
397.1
215.1
249.5
1,620.0
Cash flow from operating activities
387.6
394.2
127.0
208.7
619.3
Net sales
1,113.4
993.0
1,294.9
Return on capital employed, %
13.4
16.7
15.9
Equity/assets ratio II, %
35.3
39.2
37.2
Disposable liquidity
11.50
10.78
1.99
5.74
22.26
Net profit per share, SEK
9.61
8.90
1.87
4.73
18.89
Net profit per share after dilution, SEK Cash flow from operating activities per share, SEK Average number of shares
9.56
8.82
1.87
4.73
18.76
11.88 32,622,842
12.24 32,196,618
3.89 32,622,842
6.45 32,347,092
19.15 32,346,920
Profit before tax per share, SEK
uled for autumn 2005 due to the repercussions of the hurricanes that damaged refineries in the USA. Since there is currently no refinery overcapacity, this production shortfall could not be compensated from other locations. Stocks were built up gradually in late 2005/early 2006 to enable these maintenance shutdowns. This was one of the underlying factors to the favourable freight market during these periods.
ACTIVITIES Shipping Market overview The year started with a strong freight market, however, as a result of unseasonably warm weather in the US combined with higher stock levels, imports decreased. At the same time, an unusually large number of refineries in Asia were shut down for scheduled maintenance, which also had a negative impact on activity. Altogether this resulted in a weak freight market towards the end of the first quarter, especially for large product tanker tonnage. The European market was more stable during the first quarter, largely due to the relatively cold winter, which stimulated imports of oil products from Russia. In addition, ice conditions in the Baltic Sea were favourable for ice-classed tonnage.
The weak freight market continued into the second quarter, with a recovery at the end of the period, primarily for larger tonnage. Supply and demand in the oil energy sector is largely in balance, which means that small disruptions in the production and distribution chain have a rapid impact on the freight market. As a result, spot market prices for shipments will fluctuate sharply in the coming years, and transportation will increasingly be made over longer distances. In the long-term, this is having a favourable effect on the transport sector and is leading to a greater need for vessels.
During the later part of the first quarter and second quarter of 2006, several refineries were closed for scheduled maintenance, which resulted in a lower volume of refined oil products reaching the market. Several refineries were granted dispensation for several months from maintenance shutdowns that were sched-
In the current market, the ability to swiftly adapt to market changes and at the same time offer reliable transportation will be increasingly significant. Critical mass and geographic presence will be increasingly important com-
2
Changes in the fleet In February the BRO PROMOTION (formerly the IVER EXAMPLE) and the BRO PREMIUM (formerly the IVER EXACT) – both of 45,700 dwt – were taken over. These vessels were already part of Broström’s commercial fleet but were owned by the Dutch company Vroon. Broström now owns 100% of both vessels.
petitive advantages in a market in which the number of transported tonne-miles is growing. The shipyards’ orderbooks remain very wellfilled, and newbuilding prices continue to be high, even though a slight levelling out has been noted. The price trend for second-hand quality tonnage is following the same pattern. Development for Broström Broström has continued to strengthen its positions in product and chemical tanker shipping in 2006, and additional vessels joined the fleet.
The BRO DELIVERER (14,500 dwt) was delivered in early April from the shipyard in China, and its sister vessel, the BRO DESIGNER, was delivered at the end of June. The vessels are wholly owned by Broström and are being employed in the European traffic together with other vessels in the same size segment. Two sister vessels remain to be delivered from the Chinese shipyard to Broström. Deliveries are scheduled for 2006 and early 2007.
The first quarter started out with a strong freight market in Broström’s segments, but was followed during the later part of the quarter by a sharp downturn. With its large fleet of ice-classed vessels, Broström benefited from the cold weather in northern Europe during the first quarter. An improvement was noted in the freight market toward the end of the second quarter, mainly for large tonnage operating in Asia.
In mid-March the partnership with Dünya Shipping was expanded to also include six product and chemical tankers that are currently being built in Turkey. The vessels are of 17,000 dwt, ice class 1A, and Broström and Dünya will each own three after delivery of the vessels. The vessels will be employed in Broström’s European traffic, and deliveries will take place from autumn 2006 and continue to early 2008.
On account of Broström’s focus on contracts of affreightment, where such business volume accounts for 50% - 60% of total capacity, Broström’s fleet is scheduled over a longer time period, which is why fluctuations in freight rates do not have an immediate impact on earnings. This applies to both downward and upward movements in freight rates. Consequently, most of the decline in freight rates during the later part of the first quarter did not impact Broström’s earnings until the second quarter.
In early March the BRO STELLA (built in 1995 and on 69,930 dwt,) was delivered to her buyers. The sale generated a capital gain of SEK 87.5 m and a liquidity contribution of SEK 226.5 m. Tonnage tax Starting in 2004, Broström’s entire French operation is affiliated with the tonnage tax system, in accordance with the EU’s shipping policy.
Broström’s commercial fleet currently comprises approximately 80 vessels. After the newbuildings on order have been delivered to Broström within the next two years, the commercial fleet will amount to approximately 100 vessels. The acquisitions and new partnerships entered into in 2005 are making a greater contribution to capacity utilisation of Broström’s fleet. This will gradually have a greater impact on the company’s earnings.
In Sweden a proposal has been submitted on the introduction of a tonnage tax. The proposal calls for Sweden to adopt the EU’s maritime policies and thereby achieve competitive neutrality with respect to other maritime nations within the EU. The proposal, which is expected to be adopted by Sweden’s Parliament in 2006, is proposed to apply starting with the 2005 tax year. Since a formal decision has not
Broström intends also in the future to continue taking advantage of possible consolidation opportunities in the segments in which the company is active.
3
The sale of Broströms Resebyrå AB generated a capital gain of SEK 11.3 m and a liquidity contribution of SEK 16.9 m.
been made as of this report’s publication, this report has been prepared in accordance with the old system of traditional taxation. However, as soon as a formal decision has been made, Broström intends to apply for affiliation to the tonnage tax system, provided that the pending proposal is approved in its entirety.
Activity has been high at most ports at which Broström Ship Agency Network is represented. This applies in particular to ports at which Broström is involved in tanker clearing. The earnings trend has remained favourable for the business area.
Of the total deferred tax on the balance sheet as per 30 June 2006, amounting to SEK 481.3 m, SEK 439.5 m is attributable to the Swedish shipping operations.
Sales and profit Q2 2006 Net sales during the second quarter amounted to SEK 47.5 m (215.1). The decrease is attributable to the sale of Nordic Bulkers AB in October 2005 and the sale of Broströms Resebyrå in May 2006. Sales during the second quarter of 2005 excluding the sold businesses totalled SEK 52.3 m as per the date of sale.
Sales and profit Q2 2006 Net sales during the second quarter for the Shipping operations area amounted to SEK 718.6 m (771.2). Operating profit was SEK 98.1 m (202.1). Development and profit during the second quarter were satisfactory considering the weak freight market.
Operating profit was SEK 2.4 m (7.2), which is satisfactory. Sales and profit January - June 2006 Net sales during the first half of the year amounted to SEK 149.3 m (411.0). The decrease is attributable to the sale of Nordic Bulkers AB in October 2005 and the sale of Broströms Resebyrå in May 2006. Sales during the first half year in 2005 excluding the sold businesses totalled SEK 142.1 m as per the date of sale.
Sales and profit January - June 2006 Net sales during the first half of the year for the Shipping operations area amounted to SEK 1,568.6 m (1,335.6). Operating profit was SEK 452.2 m (370.3). Development and profit during the first half of the year were satisfactory.
Operating profit was SEK 5.3 m (11.5). Shipping 6 months SEK m Net sales Operating profit
Second quarter
2006
2005
2006
2005
2005
1,568.6
1,335.6
718.6
771.2
3,073.0
452.2
370.3
98.1
202.1
Marine & Logistics Services
Full year
6 months
807.3
Full year
SEK m
2006
2005
2006
2005
2005
Net sales
149.3
411.0
47.5
215.1
743.3
5.3
11.5
2.4
7.2
22.7
Operating profit
Marine & Logistics Services
Second quarter
EXCHANGE RATE MOVEMENTS
Market overview Since Broströms Resebyrå AB was sold in early May to VIA Travel, Broström’s Marine & Logistics Services operations now consist solely of the activities conducted by the Broström Ship Agency Network.
Broström is affected by exchange rate movements primarily of the USD rate to SEK. For further information, see the Annual Report 2005, page 47, Risk factors and sensitivity analysis.
4
GROUP FINANCIAL RESULTS
MAJOR DEVELOPMENTS AFTER THE PERIOD
Net sales for the Group during the first half of the year amounted to SEK 1,720.3 m (1,746.8). Sales in 2005 excluding Nordic Bulkers AB and Broströms Resebyrå (2 months) totalled SEK 1,477.9 m, entailing volume growth of 16.4% for existing operations.
After the end of the period, the vessels GEESTESTERN and LEINESTERN have been acquired from the partner Rigel Schiffahrts. Furthermore, an option agreement was entered into which gives Broström the right to purchase the vessel HUNTESTERN following the expiration of the current charter or by the end of 2007 at the latest. These vessels are all of 37,300 dwt and were built in 2004 and 2005.
The share in associated companies’ profit was SEK 2.6 m (5.1). Operating profit was SEK 463.7 m (381.6). Net interest expense amounted to SEK -83.0 m (-38.8). The USD Libor (6 months) interest rate changed during the period, from 4.7% on 31 December 2005 to 5.6% on 30 June 2006. Net financial items amounted to SEK -88.7 m (-34.5), which resulted in a profit of SEK 375.0 m (347.1) after net financial items.
In addition, agreements were signed on the sale of the vessel BRO TRAVELLER (14,320 dwt), built in 1988. The sale is expected to give rise to a capital gain before tax of approximately SEK 13 m and a cash contribution of SEK 50 m. Agreements were also signed on the sale of the partly owned vessel TREUGIER (50%, 32,000 dwt), built in 1986. The sale is expected to give rise to a capital gain for Broström in the range of SEK 15 m and cash contribution of approximately SEK 35 m.
The return on capital employed was 13.4% (16.7). Tax expenses during the period amounted to SEK -58.4 m (-55.5), corresponding to 15.6% (16.0) of profit before tax. Paid tax amounted to SEK -5.4 m (-2.6).
OUTLOOK
The figures for the period include capital gains of SEK 98.8 m (106.2) on sales of vessels and operations.
Despite the seasonal downturn, the spot market in Broström’s market segment during the start of the third quarter of 2006 has been characterised by a strengthening market, which for large tonnage has been considerable.
Breakdown by operating area 6 months SEK m
Second quarter
2006
2005
2006
1,568.6
1,335.6
149.3
411.0
Full year
2005
2005
718.6
771.2
3,073.0
47.5
215.1
743.3
The oil energy market today is essentially in balance, and it appears that the expansion of refinery capacity will fall short of growing demand in the years ahead. Shipments are being made over ever-greater distances, and regional imbalances are expected to continue growing. Moreover, the rapidly growing Chinese economy, US oil needs and Russian exports of oil via the Baltic Sea are contributing to high demand for the shipment of oil and chemical products. Since there is a virtual balance between supply and demand in the market, events that disrupt various flows will cause the freight market to be periodically characterised by great volatility. The underlying longterm trend is judged to be positive.
Net sales Shipping M & L Services Other
2.4
0.2
1.3
0.1
1.8
1,720.3
1,746.8
767.4
986.4
3,818.1
452.2
370.3
98.1
202.1
807.3
5.3
11.5
2.4
7.2
22.7
Operating profit Shipping M & L Services Other and joint expenses for the Group
6.2
- 0.2
12.2
-10.7
- 17.6
463.7
381.6
112.7
198.6
812.4
The increasingly stringent requirements being made by authorities and customers with respect
5
Newbuildings on order
to quality, safety and the environment are putting higher demands on the overall organisation that is involved in the logistics chain.
Name
Together these factors point to a continued favourable development for Broström, and the outlook for 2006 as a whole remains favourable. Completed acquisitions and established partnerships are expected to gradually contribute to improved earnings in pace with the addition of vessels to Broström’s fleet.
Delivery
Dwt
Ownership
Partner
NB JLZ 509
2006
14,500
100%
NB JLZ510
2007
14,500
100%
NB Dünya
2007
17,000
100%
NB Dünya
2007
17,000
100%
NB Dünya
2007
17,000
100%
NB 386
2009
7,500
50%
Thun
NB 387
2009
7,500
50%
Thun
Broström’s updated fleet list can be found at www.brostrom.se.
The shipyards’ orderbooks are at historically high levels in Broström’s vessel segments, and a large number of vessels will be delivered in the years immediately ahead. In Broström’s view, however, this addition of tonnage will be offset to a large degree by the major need for replacement and structural changes in the market.
CASH FLOW Cash flow from operating activities before the shareholder dividend amounted to SEK 387.6 m (394.2), or SEK 11.88 (12.24) per share.
The value of the US dollar relative to the Swedish krona is an uncertainty factor to note. All else equal, a weakening of the US dollar would have a negative impact on Broström’s sales, earnings and shareholders’ equity, while a strengthening would have a positive effect.
FINANCIAL POSITION AND LIQUIDITY The Group’s disposable liquidity on the balance sheet date amounted to SEK 1,113.4 m (1,294.9 on 31 December 2005). This amount includes unutilised overdraft facilities totalling SEK 52.4 m (52.5).
INVESTMENTS AND DIVESTMENTS
Net debt increased during the period from SEK 2,577.5 m to SEK 2,809.0 m, mainly due to investments in vessels.
Total investments within the Group during the period amounted to SEK 898.2 m (397.1). Divestments totalled SEK 332.3 m (340.6).
Shareholders’ equity on the balance sheet date amounted to SEK 2,546.5 m (2,709.5 on 31 December 2005), and the equity/assets ratio I was 32.7% (34.2). The equity/assets ratio II was 35.3% (37.2), which is above Broström’s target of 30%.
Of total investments, SEK 895.6 m (219.0) pertained to vessels and newbuilding contracts. During the first quarter the BRO STELLA (69,930 dwt, built in 1995) was delivered to her buyer. The sale generated a pre-tax gain of SEK 87.5 m and a cash contribution of SEK 226.5 m.
It should be noted that in connection with the implementation of IFRS, the company has decided not to restate the book value of its vessels. With today’s market values of the Broström fleet it can be asserted that a substantial overvalue exists compared to book values.
Following delivery of the BRO DELIVERER to Broström in April 2006 and BRO DESIGNER in June 2006, Broström is currently involved in investments in seven newbuildings. Additional vessels and newbuildings will be added to the fleet under various partnerships.
Broström’s financial position is strong and enables continued participation in possible structural changes in the industry.
6
number of exercised warrants on 30 June 2006 was 366,550. The remaining number of warrants was 33,450.
PLEDGED ASSETS AND CONTINGENT LIABILITIES Pledged assets have increased since the start of the year by SEK 295.7 m and amount to SEK 5,777.8 m (5,482.1 on 31 December 2005). Contingent liabilities have decreased by SEK 19.7 m since the start of the year and amount to SEK 94.2 m (113.9 on 31 December 2005).
Exercised warrants in the programme entail increases of 1.2% and 0.8%, respectively, in the number of shares and votes. There was no dilutive effect in terms of value on the balance sheet date.
WARRANT PROGRAMMES As per 30 June 2006 Broström has two warrant programmes in effect. One was introduced in 2003 and the other in 2005. The programmes have been offered to all permanent employees of the Group and to employees of partly owned companies in which Broström’s ownership is more than 50%.
STAFF The number of employees has not changed significantly.
PARENT COMPANY The activities of the parent company, Broström AB, consist mainly of Group management and administration of joint activities for the Group. The assets consist mainly of shares in subsidiaries and short-term financial investments.
The warrant programme from 2003 consists of two warrant series with exercise dates in September 2005 and September 2006, respectively. Each employee was entitled to 2,000 warrants. If the programme was not fully subscribed, an additional maximum of 100,000 warrants could be subscribed. The price of each warrant was SEK 3.80 in series 2003/1 and SEK 4.35 in series 2003/2. An offer was also made in autumn 2004 to all new employees. The price then was SEK 34.00 per warrant in both series. Each warrant entitles its bearer to subscribe for one share at the exercise price of SEK 58.40. In September 2005, 275,750 warrants were redeemed. The total number of exercised warrants on 30 June 2006 was 275,750. There were no outstanding warrants on the balance sheet date. The warrant programme entails increases of 0.8% and 0.5%, respectively, in the number of shares and votes.
6 months
The warrant programme from 2005 consists of two warrant series with exercise dates in September 2007 and September 2008, respectively. Each employee was entitled to 1,250 warrants. If the programme was not fully subscribed, an additional maximum of 98,750 warrants could be subscribed. The price of each warrant was SEK 6.25 in series 2005/1 and SEK 8.50 in series 2005/2. Each warrant entitles its bearer to subscribe for one share at the exercise price of SEK 157.20. The total
7
Full year
SEK m
2006
2005
2006
2005
2005
Net sales
16.3
14.4
8.0
7.2
29.2
Profit before allocations and tax
49.6
34.2
61.8
29.8
429.6
Of which, dividends from subsidiaries and associated companies
59.3
37.2
59.3
37.2
436.5
Fixed assets
1,980.3
2 013.2
-
-
1,976.3
Current assets
1,691.4
721.6
-
-
1,956.2
Total assets
3,671,7
2,734.8
-
-
3,932.5
Shareholders’ equity
1,563.3
1,296.6
-
-
1,766.3
Untaxed reserves
The dilutive effect in terms of value was 0.6% on the balance sheet date.
Second quarter
3.4
-
-
-
3.4
Long-term liabilities
1,009.5
94.1
-
-
1,077.1
Short-term liabilities
1,095.5
1,344.1
-
-
1,085.7
Total liabilities and shareholders’ equity
3,671.7
2,734.8
-
-
3,932.5
Investments
0.8
90.5
0.3
89.9
92.4
Divestments
16.9
17.9
16.9
-
68.8
Disposable liquidity
995.1
708.8
-
-
1,092.0
Of which, unutilised overdraft facilities
52.4
37.6
-
-
52.5
The Group has also analysed the IFRSs and interpretations that have not yet taken effect nor which have been applied in the 2005 Annual Report. Only IFRS 7 Financial Instruments: Disclosures, which takes effect in 2007, is expected to apply for the Group. This new standard pertains to the scope and content in the disclosure of financial instruments and risks in the Annual Report, and upon application it is not expected to have any material impact on Broström’s earnings or financial position.
ACCOUNTING PRINCIPLES This interim report has been prepared in accordance with IAS 34 Interim Financial Reporting. The accounting principles of the parent company have been prepared in accordance with RR 32 and the Swedish Annual Accounts Act. Since 1 January 2005 the Broström Group has applied the International Financial Reporting Standards (IFRS) approved by the EU, along with the additional rules stipulated by recommendation RR30 of the Swedish Financial Accounting Standards Council. The Group has applied the same accounting principles and calculation methods in the interim report as in the most recent annual report.
FUTURE REPORTS Broström will release a financial report on the following date in 2006: 31
October
Interim report nine months 2006
The Group has analysed the IFRSs and interpretations that took effect on 1 January 2006. These have not affected the Group’s reporting.
Göteborg, 25 August 2006 BROSTRÖM AB (publ) On behalf of the Board Lennart Simonsson Managing Director Broström AB 403 30 Göteborg Sweden Tel +46 31 61 61 00 Reg. no. 556005-1467 This report has not been reviewed by Broström’s auditors. More information about Broström and press releases can be found at www.brostrom.se.
8
INCOME STATEMENTS 6 months Group, SEK m Net sales
Second quarter
Full year
2006
2005
2006
2005
2005
1,720.3
1,746.8
767.4
986.4
3,818.1
7.4
5.7
3.0
3.5
14.1
119.1
119.8
17.7
64.1
149.6
2.6
5.1
2.0
3.7
12.5
External expenses
- 969.9
- 1,143.7
- 465.6
- 677.9
- 2,403.1
Personnel costs
-251.1
- 239.7
- 127.7
- 121.7
- 521.2
Depreciations
-164.7
- 112.4
-84.1
- 59.5
- 257.6
463.7
381.6
112.7
198.6
812.4
Capitalised work for own account Other income, including sales of vessels Share in associated companies’ profit after tax
Operating profit (EBIT)
0.8
34.4
- 5.7
15.2
61.2
Financial expenses
- 89.5
- 68.9
- 42.1
- 28.3
- 153.5
Net financial items
- 88.7
- 34.5
- 47.8
- 13.1
- 92.3
Profit after net financial items
375.0
347.1
64.9
185.5
720.1
Tax on profit for the period
- 58.4
- 55.5
- 4.3
- 30.2
- 97.2
Profit for the period
316.6
291.6
60.6
155.3
622.9
313.3
286.3
60.7
152.7
611.1
3.3
5.3
-0.1
2.6
11.8
Earnings per share, SEK
9.61
8.90
1.87
4.73
18.89
Earnings per share after dilution, SEK
9.56
8.82
1.87
4.73
18.76
Average exchange rate SEK/USD
7.59
7.12
7.40
7.31
7.48
Average exchange rate SEK/EUR
9.33
9.14
9.30
9.26
9.28
Financial income
Profit for the period attributable to Equity holders of the parent Minority interest
9
BALANCE SHEETS Group, SEK m
30 June 2006
31 December 2005
128.0
141.1
ASSETS Fixed assets Goodwill Other intangible fixed assets Tangible fixed assets Financial fixed assets, interest-bearing Financial fixed assets, non-interest-bearing Total fixed assets
3.2
3.7
5,642.1
5,549.7
29.4
27.9
65.6
64.8
5,868.3
5,787.2
Current assets Inventories
68.0
59.1
Short-term receivables
549.3
582.4
Derivative instruments
2.5
5.4
Short-term investments
227.8
260.6
Liquid assets
1,061.0
1,219.9
Total current assets
1,908.6
2,127.4
Total assets
7,776.9
7,914.6
SHAREHOLDERS’ EQUITY AND LIABILITIES 1) Shareholders’ equity
2,546.5
2,709.5
Equalisation reserve
172.5
205.3
Deferred tax
481.3
473.1
Long-term liabilities
Other long-term liabilities, non-interest-bearing
25.5
26.5
3,822.4
3,805.1
4,501.7
4,510.0
Current liabilities, interest-bearing 2 )
305.3
283.6
Current liabilities, non-interest-bearing
423.4
411.5
Total short-term liabilities
728.7
695.1
Total liabilities and shareholders’ equity
7,776.9
7,914.6
Pledged assets
Long-term liabilities, interest-bearing
2)
Total long-term liabilities Short-term liabilities
5,777.8
5,482.1
Contingent liabilities
94.2
113.9
Closing date exchange rate SEK/USD
7.26
7.95
Closing date exchange rate SEK/EUR
9.22
9.43
1)
Of which minority interest
37.0
34.8
2)
Of which financial leasing
797.8
938.2
CHANGES IN SHAREHOLDERS’ EQUITY Group, SEK m According to balance sheet, most recent year-end closing Exchange rate difference Derivative instruments, cash flow hedges after tax Profit for the period Dividend to shareholders and minority holders New issue Amount at the end of the period
2006 2,709.5 - 216.3 - 2.3 316.6 - 261.0 2,546.5
6 months 2005 1,799.5 317.0 291.6 - 161.7 93.2 2,339.6
Full year 2005 1,799.5 346.7 5.2 622.9 - 172.8 108.0 2,709.5
The exchange rate difference for the period is mainly due to changes in the USD exchange rate, which is the reporting currency for the subsidiaries and associated companies Broström Holding BV (incl. the subsidiary Broström Tankers SAS), Broström Tankers AB and Broström Tankers Ltd, respectively.
10
CASH FLOW STATEMENTS 2006
6 months 2005
Full year 2005
OPERATING ACTIVITIES Operating profit
463.7
381.6
812.4
Adjustments for items not included in the cash flow, etc.
- 17.5
- 7.5
47.1
Financial items
- 57.1
- 30.6
- 65.4
- 5.4
- 2.6
- 17.6
3.9
- 53.3
- 157.2
387.6
394.2
619.3
- 998.4
- 182.5
- 1,016.7
315.4
322.0
543.8
Group, SEK m
Paid tax Change in working capital Cash flow from operating activities
INVESTING ACTIVITIES Investments in fixed assets Sale of fixed assets Investment in subsidiaries
-
- 58.2
- 58.2
Sale of subsidiaries
15.2
-
37.1
Change in other financial fixed assets
- 1.5
- 3.6
2.7
Cash flow from investing activities
- 669.3
77.7
- 491.3
FINANCING ACTIVITIES Dividend to shareholders
- 261.0
- 161.7
- 161.7
Dividend to minority owners
-
-
- 11.1
New share issue
-
2.7
17.7
New loans
665.8
277.8
1,099.6
- 230.5
- 435.7
- 660.1
174.3
- 316.9
284.4
- 107.4
155.0
412.4
At start of the year
1,480.5
954.9
954.9
Cash flow for the period
- 107.4
155.0
412.4
Exchange rate difference
- 84.3
52.9
113.2
1,288.8
1,162.8
1,480.5
Repayment of loans Cash flow from financing activities Cash flow for the period
Liquid assets and short-term investments
Liquid assets and short-term investments, closing balance
11
SHARE DATA Per-share data
2006
6 months 2005
Full year 2005
Full year 2004
Earnings, SEK
9.61
8.90
18.89
16.33
Earnings after dilution, SEK
9.56
8.82
18.76
15.10
Shareholders’ equity, SEK
76.92
72.67
82.69
56.30
Shareholders’ equity after dilution, SEK
76.57
72.01
82.13
55.79
Cash flow from operating activities, SEK
11.88
12.24
19.15
14.65
Cash flow, net, excluding dividend, SEK
4.71
11.17
13.09
3.83
Cash flow, net, including dividend, SEK
- 3.29 142.00
6.15
12.75
- 0.67
122.00
160.00
98.75
Number of shares, closing date
32,622,842
32,347,092
32,622,842
31,394,806
Average number of shares
32,622,842
32,196,618
32,346,920
29,287,217
Number of outstanding options
675,750
1,551,500
675,750
648,500
Number of dilution shares
150,459
295,242
218,771
283,583
Share price on balance sheet date Number of shares
Number of shares after full dilution at end of period
32,773,301
32,642,334
32,841,613
31,678,389
Average shares after full dilution at end of period
32,773,301
32,491,860
32,565,691
29,570,800
Full year 2005
Full year 2004
KEY RATIOS 2006
6 months 2005
Return on capital employed, %
13.4
16.7
15.9
9.9
Return on shareholders’ equity, %
23.4
28.1
27.1
30.0
Debt/equity ratio, multiple
1.1
0.7
1.0
0.9
Interest cover ratio, multiple
5.2
6.0
5.7
4.2
Equity/assets ratio I, %
32.7
35.1
34.2
32.5
Equity/assets ratio II, %
35.3
39.2
37.2
38.0
Share of risk-bearing capital, %
41.5
45.9
43.2
44.2
LARGEST SHAREHOLDERS Owner
Number of
Number of
30 June 2006
A shares
B shares
capital
Arvid Svensson Invest AB
1,037,984
3,621,391
14.3
27.1
734,954
1,559,705
7.0
17.2
2,448,400
7.5
4.7
The Dreijer families Odin Fonder, Oslo The Björnram families
Percentage of votes
171,840
292,578
1.4
3.9
Lennart Simonsson
96,042
205,270
0.9
2.3
Kenneth Nilsson
84,908
267,072
1.1
2.2
Case
765,500
2.3
1.5
Handelsbanken Fonder
723,652
2.2
1.4
Michael Hjortböl
485,280
1.5
0.9
Morgan Stanley
481,706
1.5
0.9
Other** Total
2,125,728
19,646,560
60.2
38.0
30,497,114
100.0
100.0
** Including non-Swedish nominee shareholders where individual holdings are not officially registered. For definitions, please see Annual Report 2005.
12