1 January–30 September 2016

Total income, Q3: SEK 215.3 (287.6) million
9 months: SEK 759.7 (834.0) million
EBITDA, Q3: SEK 50.9 (114.0) million
9 months: SEK 211.4 (306.6) million
Result before tax, Q3: SEK –22.4 (52.4) million
9 months: SEK 23.4 (124.5) million
Result per share after tax, Q3: SEK –0.22 (1.10) million
9 months: SEK 0.74 (2.61)

Events in the third quarter

Weak market due to seasonality and structural and geopolitical reasons.
Reversal of previously recognised tax expense of SEK 11.9 million in Switzerland.
Another quarter without a Lost Time Injury.

Events after the end of the third quarter

Sale and leaseback agreement for IMOIIMAX tanker Stena Image signed in mid-October.
Sale and leaseback agreement for suezmax tanker Stena Supreme. Transfer of ownership takes place at the end of November.

Key ratios

	Quarter 3 (Jul–Sep)		9 months (Jan–Sep)		Full year
	2016	2015	2016	2015	2015
Total income, SEK million	215.3	287.6	759.7	834.0	1 086.6
EBITDA, SEK million	50.9	114.0	211.4	306.6	423.8
EBITDA, USD million	5.9	13.5	25.2	36.4	50.3
Operating result, SEK million	–9.8	60.7	35.2	152.0	209.6
Result after tax, SEK million	–10.6	52.4	35.2	124.5	173.9
Equity ratio, %	44	43	44	43	43
Return on equity, %	5	6	5	6	10
Available liquid funds, including unutilised credit facilities, SEK million	401.0	362.5	401.0	362.5	367.1
Result per share after tax, SEK	–0.22	1.10	0.74	2.61	3.64
Equity per share, SEK	40.11	38.27	40.11	38.27	39.15
Lost Time Injury	0	0	0	0	0

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Kim Ullman

CEO, Concordia Maritime

Stable positions in a weak market

The market in the third quarter was largely exactly as we predicted. In addition to a seasonal decline, the quarter was also marked by structural factors, such as high inventory levels of oil products and extensive ship deliveries. In addition, unrest in Nigeria had an adverse effect on developments, particularly in the suezmax segment. To meet the challenges – while also turning them into opportunities – two leaseback transactions were conducted in October/November, which had a significant positive cash effect for us.

Given the developments, we can conclude that our strategy to charter out some of the P-MAX fleet on longer contracts (time charter and CVC) has proved to be absolutely right. Income for these vessels was significantly higher than the market in general during the quarter. It is also pleasing to note that the IMOIIMAX vessels are continuing to perform as planned. With our partner Stena Weco, we have been successful in finding combination trades that bring high, stable utilisation. In relation to the market and competitors, our trump card in the crude oil segment, Stena Supreme, continues to perform well in the framework of the Stena Sonangol Pool.

Innovative and competitive forms of financing

After the end of the quarter, we entered into sale and leaseback agreements for Stena Image and Stena Supreme. The transactions enable us to create values of both a strategic and financial nature. They are producing a significant positive cash effect, while enabling us to continue employing the vessels in their respective pools for many years to come.

The arrangements are an effective way of preparing ourselves ahead of a subdued market situation – and the good business opportunities that may arise there. We are now in a financially strong position to act should the right opportunity arise. With the agreements, we have taken a first step into the Japanese financing market. This is an interesting market, which presents new opportunities for innovative and competitive forms of financing.

Market outlook

2016 as a whole will be something of a transitional year for tanker shipping. It will be worse than 2015, but better than 2014. It is difficult, as yet, to assess what 2017 and 2018 will be like, but the continuing high inventory levels are very likely to have a dampening effect on developments in the future. At the same time, the current slump in ship orders will contribute to a better balance in the market in a more long-term perspective. It is worth repeating that tanker shipping is a volatile market, in which fluctuations can be powerful and sudden. And herein lies both the market’s attraction and challenge. We are doing our utmost to take advantage of the opportunities that arise – whatever the economic and market situation.