FOCUSED. DIVERSIFIED. COMPETENT. TRUSTWORTHY. DVB Bank Group – Investor Presentation Frankfurt/Main, October 2017
Disclaimer This presentation has been prepared by DVB Bank Group. This presentation does not contain or constitute an offer, or the solicitation of an offer, to buy or subscribe for securities to any person. This document is not a prospectus. The presentation is a short summary description of certain aspects in respect of DVB Bank Group. It may not contain all relevant information in respect of the topics covered. This presentation is therefore not a sufficient basis for any investment decision in respect of any securities of DVB Bank Group. This presentation contains forward-looking statements which include statements about our beliefs and expectations as well as the assumptions underlying them. Such statements speak only as of the day they are made since they are based on plans, estimates and projections currently available to the management of DVB Bank Group. Forward-looking statements contain risks and uncertainties, and it cannot be guaranteed that they will turn out to be correct in light of future events or developments. Information and opinions contained in this presentation have been compiled or arrived from sources believed by DVB Bank Group to be reliable. Any statements about DVB Bank Group’s market position are based on DVB Bank Group’s own estimates, unless explicitly stated otherwise herein. Although the information shown herein has been taken from sources which are believed to be reliable or is based on DVB Bank Group’s own estimates, no warranty or representation is made as to the correctness, complete ness and accuracy of the information or the assessments made on its basis. DVB Bank Group accepts no responsibility or liability whatsoever for any expense, loss or damages arising out of, or in any way connected with, the use of all or any part of this presentation. Investor Presentation __ October 2017 __ Disclaimer Page 2
Contents 03/ DVB – Financials and outlook 04/ DVB – Further information 5 Financial figures 36 Shareholder base 13 Own funds and refinancing 37 Board of Managing Directors 15 Rating 38 Staff 16 Macroeconomic environment and forecast 39 Imprint 19 Financial calendar 40 Photo credits 02/ DVB – Business model 21 Competitive strengths 03/ DVB – Lending volume and portfolio data 27 Lending volume 28 Shipping Finance 29 Aviation Finance 30 Offshore Finance 31 Land Transport Finance 32 Financial Institutions and Syndications 33 DVB Corporate Finance 34 Investment Management Page 3
01/ DVB – Financials and outlook 5 Financial figures 13 Own funds and refinancing 15 Rating 16 Macroeconomic environment and forecast 19 Financial calendar
01/ Financials and outlook 02/ Business model 03/ Lending volume and portfolio data 04/ Further information Preliminary remarks All statements made regarding net worth, financial position & results relate to DVB Bank Group. All amounts are disclosed in euro and on the basis of IFRS/IAS if not stated otherwise. Unless indicated otherwise, all financial data apply to 30 June 2017 and have been reviewed by auditors. Investor Presentation __ October 2017 __ Financial figures Page 5
01/ Financials and outlook 02/ Business model 03/ Lending volume and portfolio data 04/ Further information Press release as of 31 August 2017 (1) DVB Bank Group (DVB) posts half-yearly results for 2017 / Significant increase in allowance for credit losses / Volatile effects from the IAS 39 result Frankfurt/Main, 31 August 2017 – DVB, the specialist in international transport finance, reported a consolidated net loss before taxes of € 506.3 million in the first six months of 2017 (previous year: net income of € 14.1 million). The net figure was dominated by a significant increase in allowance for credit losses, to € 445.3 million (previous year: € 83.4 million), reflecting market developments. Moreover, due to the continued narrowing of spreads for euro/US dollar cross-currency swaps, the net result from financial instruments in accordance with IAS 39 fell to €– 67.9 million (previous year: € 10.0 million). Ralf Bedranowsky, CEO and Chairman of DVB Bank SE's Board of Managing Directors, commented on the Bank's consolidated results: “The increase in allowance for credit losses was largely required for legacy exposures in the Shipping Finance portfolio, and for financings in the Offshore Finance portfolio. These developments reflected the following market trends: • Given persistent oil price uncertainty, oil and gas companies have continued to reduce their exploration and production spending, which has further curtailed demand for offshore vessels and equipment. Shipowners remain under pressure from low charter rates and competition for employment. Against this background, owners of vessels and drilling rigs adjusted their capacities, through lay-ups, restructuring or consolidation. To be continued on next slide Investor Presentation __ October 2017 __ Financial figures Page 6
01/ Financials and outlook 02/ Business model 03/ Lending volume and portfolio data 04/ Further information Press release as of 31 August 2017 (2) • Excess capacity remained a major challenge on shipping markets throughout the first half of 2017. Container carriers, bulk carriers and tankers are the three most important sectors for the maritime industry, in terms of transport volumes and services. Especially in container shipping , persistently difficult market conditions have burdened performance amongst shipowners. In this context, increasing consolidation of shipping lines is set to intensify competition amongst shipowners chartering their vessels to line operators. Even though charter rates in container shipping showed some improvement during the first half of 2017, whether this trend will in fact be sustainable is open to question, for two reasons. On the one hand, consolidation among shipping lines is accelerating, and on the other hand, charter rates are further burdened, given the continued delivery of a large number of 20,000 TEU container ships. Consequently, market values of container vessels have not been able to recover so far. Looking ahead, the cascading effect caused by substantial deliveries of large container carriers will mostly have a negative effect upon the development of charter rates and market values in the other size categories. Bulk carriers enjoyed a strong increase in earnings during the first half of 2017. The Baltic Dry Index (BDI) was quoted at an average of 976 points during the first six months of the year – up 101% year-on year. Freight rates were supported by continued Chinese demand for iron ore and coal. The BDI reached its year-to-date high in April, albeit staying far away from the historical peak of more than 10,000 points in 2007/2008. A multi-year comparison shows that charter rates for bulk carriers have remained insufficient, given that a large number of vessels was bought and financed at record prices. Following an improvement during the first quarter of 2017, which was driven by seasonal factors, tanker markets declined again during the second quarter, putting pressure on shipowners' earnings. The extension of OPEC members' agreement to reduce production volumes had a negative impact on tonne-mile demand in the crude oil tanker segment. Yet at the same time, the crude oil tanker fleet grew by 5.5% year-on-year. The significant volume of new tonnage on order – which rose further year-to-date – created an additional burden. To be continued on next slide Investor Presentation __ October 2017 __ Financial figures Page 7
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