GasLog Ltd. Reports Fourth Quarter Profit of $45.9 Million
GasLog Ltd. and its subsidiaries, an international owner, operator and manager of liquefied natural gas (“LNG”) carriers, reported its financial results for the three-month period and the year ended December 31, 2020.
Highlights
• Announces agreement for the acquisition of approximately 45% of GasLog Ltd.’s outstanding common shares by BlackRock’s Global Energy & Power Infrastructure Team.• Delivery of the GasLog Georgetown on November 16, 2020, a 174,000 cubic meter (“cbm”) LNG carrier with dual fuel medium speed propulsion (“X-DF”) and commencement of its seven-year time charter agreement with a wholly-owned subsidiary of Cheniere Energy, Inc. (“Cheniere”).• Post year-end, delivery of the GasLog Galveston on January 4, 2021, a 174,000 cbm LNG carrier with X-DF propulsion and commencement of its seven-year time charter agreement with Cheniere.• Completed the sale-and-leaseback of the GasLog Hong Kong, with CMB Financial Leasing Co. Ltd. (“CMBFL”), releasing $26.4 million of incremental liquidity to GasLog.• Post year-end, completed the sale-and-leaseback of the GasLog Houston with ICBC Financial Leasing Co. Ltd. (“ICBC”), releasing $34.8 million of incremental liquidity to GasLog.• Repaid $26.5 million of debt in the fourth quarter of 2020, bringing total debt repayment (excluding prepayments for refinanced facilities) to $219.3 million during 2020.• Quarterly Revenues of $192.6 million, Profit of $45.9 million and Earnings per share1 of $0.27 for the three-month period ended December 31, 2020.• Quarterly Adjusted EBITDA of $137.4 million, Adjusted Profit1 of $46.3 million and Adjusted Earnings per share1 of $0.24 for the three-month period ended December 31, 2020.• Annual Revenues and Adjusted EBITDA of $674.1 million and $465.6 million for the twelve-month period ended December 31, 2020.• Quarterly dividend of $0.05 per common share payable on March 11, 2021.
Agreement for the acquisition of approximately 45% of GasLog Ltd.’s outstanding common shares by BlackRock’s Global Energy & Power Infrastructure Team
As we separately announced today, GasLog has entered into an agreement and plan of merger (the “Merger Agreement”) with BlackRock’s Global Energy & Power Infrastructure Team (collectively, “GEPIF”), which is focused on essential, long-term infrastructure investments in the energy and power sector, pursuant to which GEPIF will acquire all of the outstanding common shares of GasLog Ltd. that are not held by certain existing shareholders for a purchase price of $5.80 in cash per share (the “Transaction”). Following the consummation of the Transaction, certain existing shareholders, including Blenheim Holdings Ltd., which is wholly owned by the Livanos family, and a wholly owned affiliate of the Onassis Foundation, will continue to hold approximately 55% of the outstanding common shares of GasLog Ltd. and GEPIF will hold approximately 45%. Please refer to the separate press release on the Transaction dated February 22, 2021 for additional information.
Dividend Declarations
On December 9, 2020, the board of directors declared a dividend on the Series A Preference Shares of $0.546875 per share, or $2.5 million in the aggregate, payable on January 4, 2021 to holders of record as of December 31, 2020.
On February 21, 2021, the board of directors declared a quarterly cash dividend of $0.05 per common share, or $4.8 million in the aggregate, payable on March 11, 2021 to shareholders of record as of March 4, 2021.
GasLog Partners Strategic Review Update
On November 10, 2020, GasLog Partners LP (“GasLog Partners” or the “Partnership”) announced its intention to engage with an independent advisor to assess its strategic alternatives. After a comprehensive analysis of the Partnership’s corporate structure, assets, financial position, competitive environment and current and expected commercial market, the following conclusions have been reached:
• GasLog Partners will maintain its current corporate structure with GasLog as its general partner;• GasLog Partners will continue to pursue an independent commercial and operational strategy of owning, operating, and acquiring LNG carriers; and• Strategy remains an ongoing focus of the GasLog Partners’ board and GasLog Partners is open to entertaining all value-enhancing options for the business as it continues to reduce debt and enhance liquidity.
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Okeanis Eco Tankers Corp. Reports Third Quarter Profit of $15.6 Million
Okeanis Eco Tankers Corp. reported unaudited interim condensed results for the three and nine months ended September 30, 2020.
Q3 2020 Highlights
Time charter equivalent (“TCE”) revenue and Adjusted EBITDA of $47.5 million and $35.5 million, respectively. Profit for the period of $15.6 million or $0.48 per basic & diluted share. Profit includes a write-off of deferred financing fees associated with debt re-financing and an unrealized loss on derivatives of $1.1 million and $0.4 million, respectively. Profit excluding these items was $17.2 million, or $0.53 per basic & diluted share.
Fleetwide daily TCE rate of $35,600 per operating day; VLCC, Suezmax and Aframax/LR2 TCE rates of $44,000, $31,800 and $15,200 per operating day, respectively.
Daily vessel operating expenses (“opex”) of $8,115 per calendar day, including management fees.In Q4 2020 to date, 100% of the available VLCC spot days have been booked at an average TCE rate of $24,000 per day, 70% of the available Suezmax spot days have been booked at an average TCE rate of $17,000 per day and 39% of the available Aframax/LR2 spot days have been booked at an average TCE rate of $11,000 per day.
In July 2020, the Suezmax vessels Kimolos and Folegandros were re-financed for $42.2 million and $39.2 million, respectively.Between August and October 2020, the Company entered into seven floating-to-fixed interest rate swaps with a total notional amount of $344.9 million at an average fixed interest rate of 0.3231% for a term of three years.
In September 2020, the Company paid a cash dividend to its shareholders of $0.75 per share, amounting to $24.3 million.Also in September 2020, the Company took delivery of Suezmax vessels Nissos Sikinos and Nissos Sifnos. Both vessels entered into three-year time charter contracts upon delivery. In connection with their delivery, the Company entered into a $103.2 million loan facility with the Export-Import Bank of Korea, the BNK Busan Bank and the BNK Kyongnam Bank.Subsequent Events
The Board of Directors of OET declared a cash dividend of $0.10 per share, amounting to $3.2 million. The cash dividend will be paid on Wednesday December 2, 2020 to shareholders of record as of Thursday November 26, 2020. The shares will be traded ex-dividend as from and including Wednesday November 25, 2020.
Okeanis Eco Tankers Corp. is a pure play eco and scrubber-fitted tanker company that owns and operates a fleet of 17 modern, high-specification crude oil and products tankers in the VLCC, Suezmax and Aframax/LR2 segments.
Italy’s UnipolSai Stays on Profit Track Despite Coronavirus Resurgence
Consolidated net profit of €701m compared to €576m at 30 September 2019 (+21.6%)
Direct insurance income of €8.6bn (-13.7%)
Non-life business: €5.5bn (-3.6%)
Life business: €3.1bn (-27.2%)
Combined ratio net of reinsurance 86.0%, an improvement on the figure of 94.1% recorded as at 30 September 2019
Individual solvency ratio of 284%
The Board of Directors of UnipolSai Assicurazioni S.p.A., which met yesterday under the chairmanship of Carlo Cimbri, approved the consolidated results as at 30 September 2020.
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China’s Ping An Insurance Reports 7.74% Hike in Q3 Profit
Ping An Insurance Group Co of China Ltd on Tuesday reported a 7.74% rise in net profit, its first quarterly profit increase in a year, as the country’s largest insurer by market value attracted more retail customers.
Net profit rose to 34.4 billion yuan ($5.12 billion) in the three months to September 30 from 31.9 billion yuan a year earlier, Ping An said in a stock market filing in Hong Kong on Tuesday.
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Deutsche Bank reports third-quarter profit of 309 million euros with transformation on track
– Strongest quarterly profit of the current year
– Profit of 309 million euros with profit before tax of 482 million euros
– Nine-month profit of 435 million euros and profit before tax of 846 million euros Group net revenues grew 13% year-on-year to 5.9 billion euros in the quarter
– Core Bank net revenues up 9% year-on-year to 6.0 billion euros
– Investment Bank net revenues of 2.4 billion euros, up 43%
– Private Bank stable as volume growth offsets interest rate headwinds
– Corporate Bank down 5%, 2% ex-FX translation effects, as deposit repricing partly offsets interest rate headwinds
– Asset Management net revenues up 4% with net inflows of 11 billion euros 11th consecutive quarter of progress on costs
– Noninterest expenses down 10% year-on-year to 5.2 billion euros
– 4.7 billion euros in adjusted costs ex-transformation charges1 excluding reimbursable expenses related to Prime Finance, down 10% year-on-year
– On track to meet full-year 2020 target of 19.5 billion euros Core Bank quarterly profit before tax of 909 million euros
– Adjusted profit before tax1 of 1.2 billion euros, up 87% year-on-year
– Nine-month profit before tax of 2.6 billion euros with adjusted profit before tax1 up 40% to 3.2 billion euros Capital Release Unit: further progress on asset reduction in the quarter
– Risk weighted assets down by 3 billion euros to 39 billion euros Continued disciplined management of capital, risk and balance sheet
– Common Equity Tier 1 capital ratio stable at 13.3%, 285 basis points above regulatory requirements
– Liquidity reserves of 253 billion euros, LCR surplus of 76 billion euros
– Provision for credit losses of 273 million euros, 25 basis points of loans (bps) in the third quarter and 47 bps annualised in first nine months of 2020
– Reaffirmed guidance of full-year provision for credit losses of 35-45 bps
Christian Sewing, Chief Executive officer, said: “In the fifth quarter of our transformation, we not only demonstrated continued cost discipline, but also our ability to gain market share. Our more focused business model is paying off and we see a substantial part of our revenue growth as sustainable. Our balance sheet strength and high quality risk management enable us both to support clients in challenging times and to take advantage of new business opportunities.”
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Commerzbank generates profit for quarter in spite of corona – costs and capital on track
Underlying revenues in second quarter of 2020 increased to €2.3bn (Q2 2019: €2.1bn) – significant growth in net commission income
Operating costs continue to fall to €1.53bn despite IT investments (Q2 2019: €1.58bn)
Ongoing low NPE ratio of 0.8% reflects good quality of loan book
Operating profit at €205m (Q2 2019: €309m) – net result at €220m (Q2 2019: €279m)
Common Equity Tier 1 ratio increased to 13.4% without usage of regulatory transitional rules
Risk result at €-469m (Q2: 2019: €-178m) includes impact of €-175m from single case and coronavirus effects of €-131m
In the second quarter of 2020 Commerzbank generated an operating profit of €205 million in spite of significantly higher negative impact from the risk result. Overall, client business was stable. The Corporate Clients segment slightly increased revenues thanks to good capital market business. In the Private and Small-Business Customer segment, the Bank reported further growth in customers and in loan and securities volume primarily on the back of its digital offerings. Overall, the Bank increased revenues by almost 7% year-on-year. This reflects a significant increase in net commission income and reversals of valuation effects. The latter had a significant negative effect on the previous quarter. In Q2 valuation effects partly recovered in line with expectations. The Bank brought down operating costs by 3.3%. This contrasted with a significantly higher risk result of minus €469 million. It included additional effects of minus €131 million resulting from the coronavirus and an impact of €175 million from a single case. Although the Bank did not make use of the new regulatory transitional rules, the Common Equity Tier 1 ratio increased from 13.2% in the previous quarter to 13.4% and is clearly above all requirements.
“In the second quarter, we achieved a positive result in spite of the coronavirus and we were able support our customers in overcoming the consequences of the pandemic. That is the top priority in times like this,” said Martin Zielke, Chairman of the Board of Managing Directors of Commerzbank. “We have benefited from the fact that in recent years we have positioned the Bank to be much more robust and more digital.”
Since the beginning of the coronavirus crisis, Commerzbank has received around 21,000 loan applications with a volume of €20 billion and the Bank has approved KfW-loans in the amount of around €7 billion. This puts the Bank’s market share for KfW loans up to €100 million at around 15 %. Furthermore, the Bank granted payment holidays for more than 33,000 loans with a volume in excess of €3.4 billion. The digital offerings of the Bank gained additional momentum. As a consequence, the number of active users of the online banking portal and the banking app achieved a new record with 2.7 million in June. The banking app of Commerzbank alone had almost 1.6 million active participants in June. Approximately every two weeks, the offering was expanded by new functions, such as the possibility to order securities on the app or to use Apple Pay without a credit card. The virtual debit card necessary for this has already been ordered more than 100,000 times following its introduction in the middle of June.
Group revenues increased by 6.8% to €2,273 million (Q2 2019: €2,129 million) in the second quarter. They benefited from robust growth of 7% in net commission income, primarily thanks to strong securities business. The first reversals of negative valuation effects from the first quarter made a positive contribution to the increase in revenues. The venture capital fund of Commerzbank, Commerz Ventures, made a positive contribution of around €50 million. Excluding exceptional items, revenues grew by €184 million to €2,278 million (Q2 2019: €2,095 million).
Operating costs continued their downward trajectory by €53 million to €1,526 million (Q2 2019: €1,579 million) in spite of IT investments, as a result of sustained cost management in the second quarter. The ongoing programme of headcount reductions also contributed to this. At the end of June 2020, the number of full-time positions in the Group was around 39,700, which is around 1,000 FTEs less year-on-year. The reduced operating costs contrasted with compulsory contributions amounting to €73 million, which went up once again with an increase of €10 million year-on-year (Q2 2019: €63 million).
The risk result increased significantly in the second quarter to minus €469 million (Q2 2019: minus €178 million). Of this, minus €175 million are due to a large single case. The effects of the coronavirus also had a negative impact on the risk result totalling €131 million. This includes a provisional recognition of €84 million for potential corona-related effects. The quality of the loan book remained high thanks to the massive reduction of risk over past years with a ratio of non-performing loans continuing to be low at 0.8%.
Overall, the Bank generated an operating profit of €205 million (Q2 2019: 309 million) in the second quarter. The pre-tax profit amounted to €211 million (Q2 2019: €329 million). The Bank therefore generated a net result attributable to shareholders of €220 million (Q2 2019: €279 million). This also reflects a low tax ratio because, among other things, the valuation gain of Commerz Ventures does not trigger a tax expense.
The Common Equity Tier 1 ratio (CET 1 ratio) improved to 13.4% at the end of June (end of March 2020: 13.2%; end of June 2019: 12.9%), while the Bank did not use the new regulatory transitional rules. The increase in Risk weighted Assets was overcompensated by capital build as a result of the net profit in Q2, lower regulatory deductions, and positive effects from the revaluation reserve. As at 30 June 2020, the Bank was more than 300 basis points above the regulatory requirement for Common Equity Tier 1 (“MDA threshold”), which could be reduced from 10.8% to 10.1% by the successful issuance of AT 1 and Tier 2 capital instruments in the second quarter. The leverage ratio was 4.7% (June 2019: 4.5%) and hence also clearly above the requirements.
“We increased our revenues and our CET 1 ratio in the second quarter, but the operating profit was negatively impacted by the risk result,” commented Bettina Orlopp, Chief Financial Officer of Commerzbank. “It is all the more important that we reduce our costs in order to be able to cushion future burdens. We are working on this and have stepped up the cost target for this year.”
Development of the segments
The Private and Small-Business Customers (PSBC) segment continued its growth in the second quarter and gained 103,000 net new customers in Germany primarily through digital channels. The segment now totals around 11.5 million customers. At the end of June, the loan and securities volume rose to €262 billion (end of March: €239 billion). The volume of mortgage lending grew by 7% to €84 billion on the back of strong new business. The volume of consumer loans remained stable at €3.8 billion (end of March 2020: €3.8 billion) as a consequence of the brake on consumer spending imposed by the coronavirus. The higher securities volume reflects the recovery in the equity markets and net inflows of €4.2 billion. Comdirect contributed strongly. The legal merger of Comdirect with Commerzbank is currently in its final phase and is likely to be completed at the beginning of the fourth quarter.
Total revenues for the segment fell back slightly to €1,194 million (Q2 2019: €1,222 million). This includes an increase in the legal provision for foreign currency loans at mBank by €42 million. While net commission income rose by 9% thanks to the high level of securities activities and the recovery in the stock markets, net interest income came down. Aside from reduced consumption in the corona crisis, this is also due to lower contributions from deposits. In addition, mBank was affected by a reduction of interest rates in Poland. The negative impact arising from the risk result of the segment amounted to €153 million (Q2 2019: minus 48 million) in the second quarter of this year, with €77 million of this being attributable to mBank. The operating costs were reduced to €864 million (Q2 2019: €873 million). Overall, the operating profit for the segment decreased to €112 million (Q2 2019: €248 million).
The Corporate Clients segment slightly increased revenues to €791 million in the second quarter (Q2 2019: €776 million). The driver for this development was the International Corporates division, which benefited from strong capital market business for debt products. In particular, the Bank’s bonds business achieved its strongest quarter in the last five years. Primarily at the beginning of the quarter, there was also a high demand for loans from international large corporates which had a positive effect. On a quarterly average, the loan volume in Mittelstand and International Corporates was €95 billion (Q1 2020: €89 billion). This enabled the segment to more than compensate for the effects of the lower level of economic activities and reduced international trade resulting from the coronavirus pandemic in the segment’s Mittelstand and Institutionals divisions.
The risk result of the Corporate Clients segment was minus €289 million (Q2 2019: minus €127 million) mainly owing to the mentioned single case. The segment reduced operating costs by almost 6% to €583 million (Q2 2019: €619 million). The total operating result of the segment was therefore minus €89 million (Q2 2019: €21 million). Before risk provision, earnings amounted to €201 million and were therefore €53 million higher year-on-year.
In the Others and Consolidation segment, Commerzbank reported an operating profit of €181 million (Q2 2019: €2 million) in the second quarter of the current year. The main reason here is the partial reversal of negative Q1 effects from long-term hedging transactions. Furthermore, the Bank reported the valuation gain of Commerz Ventures here.
Outlook
On the assumptions that there will be no second lockdown, economic activities gradually recover, and the government support programmes prove to be effective, the Bank expects largely stable customer revenues for the Private and Small-Business Customers segment over the course of this year. For Corporate Clients, the Bank expects a stronger impact from the coronavirus. The Bank continues its cost management and is now targeting a cost base including IT investments slightly below the level of 2019. The risk result for the year 2020 is expected between €1.3 billion and €1.5 billion. In light of the expected risk result and potential restructuring charges, the Bank anticipates a negative net result for the year. The target for the Common Equity Tier 1 ratio continues to be at least 12.5% in line with reduced regulatory requirements.
Banco Santander reports underlying profit of €1,908 million for first half of 2020 and makes non-cash goodwill and DTA impairments
Banco Santander achieved an underlying profit of €1,908 million in the first half of 2020, down 48%, due to an increase in loan-loss provisions attributable to the covid-19 pandemic. While the pandemic has had a significant impact on customer activity, the underlying performance of the business was strong, supported by resilient customer revenues, higher than expected cost reductions, robust credit quality and good organic capital generation.
The board of directors intends to propose a payment of a scrip dividend (payable in new shares) equivalent to 10 cents per share for 2019.
Net interest income and customer revenues remained stable year-on-year, at €16.2 billion and €21.3 billion, respectively, driven by revenue growth in Latin America, Santander Corporate & Investment Banking, and Wealth Management & Insurance. This, combined with good cost control, resulted in net operating income growth of 2% to €11.9 billion.
The group is ahead of its cost saving plan, with the European region achieving more than €300 million in efficiencies in the first half of the year, representing 75% of the bank’s 2020 target. Operating expenses fell by 2% or 5% in real terms (i.e. excluding inflation).
The board of directors intends to propose a payment of a scrip dividend (payable in new shares) equivalent to 10 cents per share for 2019. The board is committed to applying a full cash dividend policy as soon as market conditions normalise, subject to regulatory approvals and guidance. In line with this commitment, the bank has accrued six basis points of CET1 capital in the quarter for a potential cash dividend against 2020 results. This is in addition to the scrip dividend for 2019 mentioned above.
The group has continued to provide significant financial support to customers throughout the pandemic, extending an average of €1.6 billion every day in new lending during the second quarter and providing more than five million customers with payment holidays. Santander also ensured that its core banking services continued to operate normally while keeping employees and customers safe. Around 90% of branches are currently open and substantially all of the banks 40,000 ATMs are operating normally.