THE FINANCIAL YEAR IN SUMMARY

The year in summary

  • Another year of high operational performance in all business areas.
  • Continuing operational growth. – Total income was SEK 33.6 billion, compared with SEK 30.2 billion in 2013. – Consolidated EBITDA (operating income before depreciation and amortisation), net of investment property valuations and sales of assets, was the highest ever, at SEK 9.3 billion, an increase of 21% compared with 2013. – The increase in EBITDA was largely due to improved ­performances by all business areas compared with 2013, in particular Drilling, Ferry operations and Shipping. – Income before tax amounted to SEK 2.8 billion, compared with SEK 2.1 billion in 2013. The figures include net gains on the sale of assets of MSEK 212 and MSEK 76, respectively.
  • Healthy balance sheet with an equity/assets ratio of 31% as of 31 December 2013.
  • Ferry operations showed an improved EBITDA, excluding restructuring expenses of MSEK 314, compared with 2013. This was achieved through strategic acquisitions, tonnage changes and continuing improvements in current operations. The focus during the year was to increase the revenues on our routes while continuing to review the business and ­implement cost improvement measures.
  • Stena Drilling had another strong year, showing improved results compared with the previous year and an average ­commercial utilisation rate of just over 98%.
  • Stena Bulk showed a marked improvement in its results ­compared with 2013, largely due to a stronger tanker market. The LNG segment generated good earnings in 2014 as a result of strong contracts and high utilisation of the fleet.
  • Stena RoRo continued its high utilisation and was also engaged in chartering out or selling vessels no longer employed in Stena Line’s operations.
  • Stena Property continued to show profitability, with a very high occupancy rate which averaged 94%.
  • Stena Adactum had another successful year for all of the portfolio companies, with results in line with the previous year. The portfolio companies continued to grow in the emerging markets, notably in Asia.
  • The Group’s liquidity was strong during the year and the maturity profile of our credit facilities was extended.

Significant business events

Ferry operations

In January 2014, the RoPax vessel Stena Superfast X (formerly Dieppe Seaways) was acquired. The vessel is a sister ship to Stena Superfast VII and Stena Superfast VIII.

In April 2014, Stena Line acquired the Rosslare (Ireland) – Cherbourg (France) business. The route will help to develop Stena Line’s route network and strengthen its strategic position in Ireland.

Stena Line continued its efforts to improve profitability by optimising tonnage during the year.

The successful floating border shop concept was introduced on the Scandinavian routes in 2014. The concept has been much appreciated by our travellers.

Offshore drilling

On 21 November, Statoil cancelled the three-year charter for the drillship Stena Carron. Stena has received compensation of MUSD 276 for the remaining contract period.

In December 2014, our contract for Stena Forth was renegotiated with Hess. The new contract runs until Q2 2017, with an option for a further one-year extension.

Bulk

At the beginning of the year, Golden Stena Weco, a joint ­venture between Stena Weco and Golden Agri-Resources, took delivery of the five vessels purchased in 2013.

The Rio de Janeiro office was closed down during the year in response to fewer shipments from customers in Brazil.

In December 2014, Stena Bulk divested its 35% ownership interest in Paradise Tankers, covering co-ownership of three Panamax vessels. In connection with the transaction, Stena Bulk acquired one of the tankers.

RoRo

In spring, the RoPax vessel Etretat was delivered to French ferry operator Brittany Ferries on a new bareboat charter.

The RoPax vessel Stena Egeria was completed at a Chinese shipyard and delivered to Bohai Sea Ferries during June for employment on a service linking China and Korea.

The RoPax vessels Partenope and Trinacria had their periods of employment with the existing customer extended until April 2015.

In late autumn 2014, a new agreement was signed with Interislander of New Zealand, under which the RoPax vessel Stena Alegra will undergo an extensive upgrade and refur­bishment prior to the commencement of a five-year bareboat charter. The vessel will be delivered in the second quarter of 2015.

New charters for Stena Foreteller, Stena Forecaster and Stena Forerunner were signed in December 2014.

Other shipping

In July 2014, it was decided to discontinue the route between Sokcho in South Korea and Zarubino and Vladivostok in Russia.

Adactum

Stena Adactum had another successful year and continued to develop and expand its business areas.

Property

A property in London was sold for MGBP 41 in July and a property in Stockholm was sold for MSEK 245 in November.

In 2014, Stena Fastigheter completed 80 apartments in Ängby Park, Stockholm, and in central Malmö. In addition, construction of 322 apartments was also initiated in Stockholm and Lund.

In 2014, Stena Fastigheter signed an agreement to purchase a commercial property under construction in Gothenburg for MSEK 868. The property, which comprises office space of 25,000 m2, is leased to SCA on a long-term contract. The building is expected to be completed in late 2016/early 2017.

The occupancy rate in 2014 was high, averaging 94%. In Sweden, the occupancy rate for residential properties was about 99% and for commercial properties about 90%. The average occupancy rate abroad was about 77% due to a weak Dutch market.

Finance

A ten-year bond of MUSD 600 was issued in January 2014. The purpose of the transaction was to extend our maturity profile and repay the principal amount outstanding under the existing credit facility.

In February 2014, an additional ten-year bond issue of MUSD 350 was implemented and MUSD 650 was issued in a Term Loan B, which is a seven-year loan with a low rate of amortisation. Collateral for both the bond and the loan ­consists of the units Stena DrillMAX and Stena Carron. The purpose of this transaction was to extend the existing amortisation profile and release more liquidity.

The financing for the semi-submersible rig Stena MidMAX was completed in July 2014.

Subsequent events

On 9 January 2015, Stena AB Group and Scandlines signed a contract for the sale of the Helsingborg–Helsingør ferry route to a European infrastructure fund managed by First State Investments. Helsingborg–Helsingør had been jointly operated (50-50 ownership) by Stena AB Group and Scandlines. First State European Diversified Infrastructure Fund FCP-SIF took over the route at the end of January 2015. The sale includes the five vessels operating on the route. The sale generated a capital gain of about SEK 1.6 billion for Stena AB Group, and this will be recognised in the first quarter of 2015.

In January 2015, an agreement was signed for the sale of Stena Feronia for MEUR 23. The vessel will be delivered in late March/early April.

In February, Marine Atlantic exercised its purchase option for the Stena vessels Highlanders and Blue Puttees, amounting to MEUR 69 for each vessel, with deliveries scheduled for December 2015 and February 2016.

In February, a property in London was sold for MGBP 19.

In February 2015, the newly built IMOIIMAX vessel Stena Impression was delivered from the Samsung shipyard in South Korea.

In February 2015, the vessel Stena Calypso, was sold for MSEK 9.6 through a lease-purchase agreement.

The route between Holyhead and Dun Laoghaire was discontinued in February 2015.

Properties in Göteborg were sold for MSEK 925 in March 2015.

At the end of March, Stena Adactum signed an agreement to sell the Mediatec companies. The buyer is the company NEP, which operates in the same industry. The transfer is expected to take place during May.