Throughout this press release, we provide a number of key performance indicators used by our management and often used by competitors in our industry.
Adjusted EBITDA
"Adjusted EBITDA" is a non-IFRS financial measure and as used herein represents earnings before financial income and expenses, depreciation, impairment, amortization and taxes. Adjusted EBITDA additionally includes adjustments for gain/(loss) on disposal of vessels and/or subsidiaries, share of profit and loss from equity accounted investments, interest income and interest expense, capitalised financing fees written off and other finance expenses. Adjusted EBITDA is used as a supplemental financial measure by management and external users of financial statements, such as lenders, to assess our operating performance as well as compliance with the financial covenants and restrictions contained in our financing agreements.
We believe that Adjusted EBITDA assists management and investors by increasing comparability of our performance from period to period. This increased comparability is achieved by excluding the potentially disparate effects of interest, depreciation, impairment, amortization and taxes. These are items that could be affected by various changing financing methods and capital structure which may significantly affect profit/(loss) between periods. Including Adjusted EBITDA as a measure benefits investors in selecting between investment alternatives.
Adjusted EBITDA is a non-IFRS financial measure and should not be considered as an alternative to net income or any other measure of our financial performance calculated in accordance with IFRS. Adjusted EBITDA excludes some, but not all, items that affect profit/(loss) and these measures may vary among other companies. Adjusted EBITDA as presented below may not be comparable to similarly titled measures of other companies.
Reconciliation of Non-IFRS measures
The following table sets forth a reconciliation of Adjusted EBITDA to profit/(loss) for the financial period, the most comparable IFRS financial measure for the periods ended 30 September 2024 and 30 September 2023.
For the 3 For the 3 For the 9 For the 9
months ended months ended months ended months ended
30 September 30 September 30 September 30 September
2024 USD'000 2023 USD'000 2024 USD'000 2023 USD'000
----------------- ------------- ------------- ------------- --------------
Profit for the
financial
period 215,635 146,938 694,403 616,840
Income tax
expense 1,164 932 4,479 4,368
----------------- ------------- ------------- ------------- --------------
Depreciation
charge of
property, plant
and equipment 53,516 53,135 161,904 156,341
----------------- ------------- ------------- ------------- --------------
Amortisation
charge of
intangible
assets 108 321 695 976
----------------- ------------- ------------- ------------- --------------
(Gain)/loss on
disposal of
assets (15,621) 133 (15,521) (56,382)
----------------- ------------- ------------- ------------- --------------
Share of profit
of
equity-accounted
investees, net
of tax (4,072) (3,236) (19,914) (14,198)
----------------- ------------- ------------- ------------- --------------
Interest income (4,455) (4,062) (11,739) (14,486)
----------------- ------------- ------------- ------------- --------------
Interest expense 9,688 23,076 38,730 73,785
----------------- ------------- ------------- ------------- --------------
Capitalised
financing fees
written off 406 -- 2,069 --
----------------- ------------- ------------- ------------- --------------
Other finance
expense 645 3,548 6,043 11,112
----------------- ------------- ------------- ------------- --------------
Adjusted EBITDA 257,014 220,785 861,149 778,356
----------------- ------------- ------------- ------------- --------------
Time charter equivalent (or "TCE")
TCE (or TCE income) is a standard shipping industry performance measure used primarily to compare period-to-period changes in a shipping company's performance despite changes in the mix of charter types (i.e., voyage charters and time charters) under which the vessels may be employed between the periods. We define TCE income as income from time charters and voyage charters (including income from Pools, as described above) for our Hafnia Vessels and TC Vessels less voyage expenses (including fuel oil, port costs, brokers' commissions and other voyage expenses).
We present TCE income per operating day(1) , a non-IFRS measure, as we believe it provides additional meaningful information in conjunction with revenues, the most directly comparable IFRS measure, because it assists management in making decisions regarding the deployment and use of our Hafnia Vessels and TC Vessels and in evaluating their financial performance. Our calculation of TCE income may not be comparable to that reported by other shipping companies.
(1) Operating days are defined as the total number of days (including waiting time) in a period during which each vessel is owned, partly owned, operated under a bareboat arrangement (including sale and lease-back) or time chartered-in, net of technical off-hire days. Total operating days stated in the quarterly financial information include operating days for TC Vessels.
Reconciliation of Non-IFRS measures
The following table reconciles our revenue (Hafnia Vessels and TC Vessels), the most directly comparable IFRS financial measure, to TCE income per operating day.
(in USD'000 except For the 3 For the 3 For the 9 For the 9 operating days and months ended months ended months ended months ended TCE income per 30 September 30 September 30 September 30 September operating day) 2024 2023 2024 2023 ------------------- ------------ ------------- ------------- ------------- Revenue (Hafnia Vessels and TC Vessels) 497,889 442,665 1,582,779 1,443,465 ------------------- ------------ ------------- ------------- ------------- Revenue (External Vessels in Disponent-Owner Pools) 221,842 208,102 753,007 524,802 ------------------- ------------ ------------- ------------- ------------- Less: Voyage expenses (Hafnia Vessels and TC Vessels) (136,331) (132,405) (425,060) (406,665) ------------------- ------------ ------------- ------------- ------------- Less: Voyage expenses (External Vessels in Disponent-Owner Pools) (80,324) (79,506) (248,807) (199,267) ------------------- ------------ ------------- ------------- ------------- Less: Pool distributions (External Vessels in Disponent-Owner Pools) (141,518) (128,596) (504,200) (325,535) ------------------- ------------ ------------- ------------- ------------- TCE income 361,558 310,260 1,157,719 1,036,800 ------------------- ------------ ------------- ------------- ------------- Operating days 10,776 10,716 31,867 31,549 ------------------- ------------ ------------- ------------- ------------- TCE income per operating day 33,549 28,954 36,330 32,863 ------------------- ------------ ------------- ------------- -------------
Revenue, voyage expenses and pool distributions in relation to External Vessels in Disponent-Owner Pools nets to zero, and therefore the calculation of TCE income is unaffected by these items:
(in USD'000 except For the 3 For the 3 For the 9 For the 9 operating days and months ended months ended months ended months ended TCE income per 30 September 30 September 30 September 30 September operating day) 2024 2023 2024 2023 ------------------- ------------ ------------- ------------- ------------- Revenue (Hafnia Vessels and TC Vessels) 497,889 442,665 1,582,779 1,443,465 Less: Voyage expenses (Hafnia Vessels and TC Vessels) (136,331) (132,405) (425,060) (406,665) ------------------- ------------ ------------- ------------- ------------- TCE income 361,558 310,260 1,157,719 1,036,800 ------------------- ------------ ------------- ------------- ------------- Operating days 10,776 10,716 31,867 31,549 ------------------- ------------ ------------- ------------- ------------- TCE income per operating day 33,549 28,954 36,330 32,863 ------------------- ------------ ------------- ------------- -------------
'TCE income' as used by management is therefore only illustrative of the performance of the Hafnia Vessels and the TC Vessels; not the External Vessels in our Pools.
For the avoidance of doubt, in all instances where we use the term "TCE income" and it is not succeeded by "(voyage charter)", we are referring to TCE income from revenue and voyage expenses related to both voyage charter and time charter.
Forward-Looking Statements
(MORE TO FOLLOW) Dow Jones Newswires
November 27, 2024 02:42 ET (07:42 GMT)
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