Höegh Autoliners ASA: second quarter results, distribution of dividends and updated forecasts for the frequency of dividends

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Höegh Autoliners CEO Andreas Enger said: “The second quarter was marked by geopolitical challenges, lockdown in China, supply chain disruptions, rising fuel prices and continued port congestion. Therefore, it is a great satisfaction that Höegh Autoliners, despite all this, is continuing our track record of strong performance and delivering record quarterly financial results.

Highlights of the quarter
Höegh Autoliners has released strong financial results for the second quarter of 2022.
Operating profit (EBITDA) of 99 million USD (+27.7% QoQ), net profit of 53 million USD (+49.2% QoQ). Dividend of $15 million expected to be paid in September 2022.
Volumes increased by 0.3 million CBM (up 7.3% QoQ) while net rate reached a new high of $61.9 per CBM (up 8.4% QoQ). quarter-on-quarter). The volume growth was primarily due to increased utilization, while the net rate improvement was the result of an optimal freight mix and continued repricing in multiple markets.

The Company completed the refinancing of the Fleet Mortgage Debt in June 2022 with significantly improved terms. A reduced amortization profile, reduced interest costs, extended maturity and fewer pledged vessels allow greater financial flexibility for the Company.

In May 2022, the company signed contracts with China Merchants Heavy Industry (Jiangsu) Co., Ltd. (CMHI) for the construction of four more 9,100 CFU Aurora-class zero-carbon, multi-fuel vessels, bringing the total newbuild program to 8 vessels. . The Company has committed external financing for the eight vessels at favorable market conditions. Delivery of the Aurora class ships will begin from the second half of 2024.

Shares of Höegh Autoliners were listed on the main market of the Oslo Stock Exchange in May 2022. The rating increase will broaden Höegh Autoliners’ exposure and opportunities to improve the liquidity of the share.

Höegh Autoliners CEO Andreas Enger said: “The second quarter was marked by geopolitical challenges, lockdown in China, supply chain disruptions, rising fuel prices and continued port congestion. Therefore, it is a great satisfaction that Höegh Autoliners, despite all this, is continuing its strong performance record and delivering record quarterly financial results. Thank you to everyone who contributed to our strong performance in the first half of 2022.”

Höegh Autoliners Chief Financial Officer Per Øivind Rosmo said: “I am pleased to see how we are able to create shareholder value through our excellent operational performance and the recently concluded refinancing of our existing debt, as well as to the financing of the new building. program. We operate and control our own vessels in well-balanced commercial systems and benefit from record utilization and increasing freight rates. We are also pleased to announce the start of dividends with a strong dividend yield”.

Outlook
The general fundamentals of the market remain positive with a tight tonnage situation and a revision of freight prices in most trade lines. However, the volatile situation we experienced in the first half related to supply chain disruptions, delays and port congestion is expected to continue for some time and could potentially impact the current favorable balance of the supply and demand if the situation of delays normalizes.

The global macroeconomic situation with high inflation, rising interest rates and fear of recession has so far not impacted our business, but it is something we are monitoring closely as it could reduce consumer and business spending and increase our borrowing costs. Most of the bunker price increase at the beginning of this year is, from the third quarter of 2022, covered by the BAF and will not impact results going forward, unless prices change drastically from current levels.

Refinancing of existing debt and new financing arrangements for new construction have reduced the Company’s financial risk and exposure to volatile credit markets.

Based on current trading performance, dividends should be maintained at about the same level for the rest of the year.

Dividend Policy Update
The updated dividend policy will be as follows:

Höegh Autoliners aims to distribute to shareholders quarterly dividends representing between 30 and 50% of quarterly net profit after tax adjusted for extraordinary items, taking into account its prospects, investment opportunities and financial situation. Any declaration of dividends will however be left to the discretion of the Board of Directors.

Dividends will be declared in USD and paid in NOK.

Monthly Exchange Update Released
In order to improve transparency for investors, the Company will start publishing a monthly trading update from September 2022. The Company will disclose the preliminary net rate, gross rate, volumes and HH/BB share for the previous month 5 to 10 days after the start of the month.
Source: Höegh Autoliners

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