Leif Leif Höegh & Co – Annual report 2002 ...focused, solid and ready for growth Annual report 2002 Leif Höegh & Co Wergelandsveien 7 P.O. Box 2596 Solli, N-0203 Oslo Phone: +47 22 86 97 00 Telex: 70935 HSHIP Fax: +47 22 20 14 08 E-mail: [email protected] www.hoegh.no Org no: 921483957 JØMERK IL ET M 241 344 Trykksaker Contents The fleet per 31.12.2002 Service Vessel LHC-share % Built Dwt Cargo capacity Service Vessel LHC-share % Built Dwt Cargo capacity Ro/Ro HUAL Trailer 100 1980 15 5935 250 Dry Bulkceu SG Prosperity 100 1996 211 202 HUAL Tramper 100 1980 12 169 3 550 ceu SG Enterprise 100 1997 211 485 HUAL Trubadour 100 1980 12 169 3 550 ceu Open Hatch Höegh Merchant 100 1977 44 895 1 724 teu HUAL Tropicana 100 1980 11 977 3 550 ceu Höegh Merit 100 1977 44 926 1 724 teu HUAL Tracer 100 1981 12 961 3 640 ceu Höegh Musketeer 100 1977 44 892 1 724 teu President’s report 1 HUAL Trapper 100 1981 12 961 3 640 ceu Höegh Marlin 100 1977 45 0631 740 teu Company profile 2 HUAL Trekker 100 1981 11 977 3 550 ceu Höegh Mascot 100 1977 45 0631 740 teu Financial summary 4 HUAL Trinity 100 1981 17 938 5 550 ceu August Oldendorff 1) 100 1979 43 571 1 492 teu Main events 5 HUAL Transit 100 1981 17 650 5 550 ceu Max Oldendorff 2) 100 1979 44 016 1 492 teu HUAL Trapeze 100 198316 694 4 110 ceu Höegh Mistral 100 1986 30 402 1 204 teu HUAL Traveller 100 1983 15 370 3 710 ceu Höegh Monal 100 1996 49 755 2 217 teu Annual report HUAL Trotter 100 1983 15 392 3 710 ceu Höegh Morus 100 1997 49 755 2 217 teu Annual report 2002 6 HUAL Trophy 100 1987 20 600 5 910 ceu Reefer vessels Summer Flower 100 1984 13 556 589 903 kbft HUAL Tribute 100 1988 21 385 5 910 ceu Summer Breeze 100 1985 13 613 588 955 kbft HUAL Triton 100 1988 23 147 6 400 ceu Summer Meadow 100 1985 13 584 590 134 kbft Organisation HUAL Tricorn 100 1988 23 069 6 400 ceu Summer Wind 100 1985 13 636 599 258 kbft Corporate Governance 12 HUAL Triumph 100 1988 20 885 5 910 ceu Ivory Dawn 3) 100 1991 10 412 527 399 kbft Organisation 13 HUAL Trident 100 1995 20 600 6 100 ceu Crystal Prince 100 1992 7 721 375 000 kbft HUAL Trooper 100 1995 21 414 6 100 ceu Crystal Pride 100 1992 7 721 375 000 kbft HUAL Trader 100 1998 21 502 6 100 ceu Crystal Primadonna 100 1992 7 721 375 723 kbft Vessel types HUAL Transporter 100 1999 21 347 6 100 ceu Crystal Privilege 100 1992 7 721 375 477 kbft Ro/Ro 14 HUAL Treasure 100 1999 22 138 6 100 ceu Caribbean Reef 100 199310 614 515 862 kbft LNG 16 City of Rome 100 1999 2 779 805 ceu Coral Reef 100 199310 614 516 530 kbft City of Paris 100 1999 2 793805 ceu Lady Racisce 36 2000 12 914 590 227 kbft Activities HUAL Asia 100 2000 21 485 6 100 ceu Lady Korcula 36 2000 12 914 590 227 kbft HUAL Trove 100 2000 21 200 6 100 ceu Ro/Ro 20 Newb. JLZ-020401 50 2004 5 200 6 720 m2 LNG 26 Newb. DSME-4432 100 2005 21 500 6 100 ceu 1) Will change name to Höegh Miranda abt. 15 April 2003 Other segments 32 Newb. DSME-4433 100 2005 21 500 6 100 ceu 2) Will change name to Höegh Minerva abt. 15 April 2003 Höegh Fleet Services 36 Newb. DSME-4434 100 2005 21 500 6 100 ceu 3) Sold December 2002. Delivered to new owners February 2003 Gas – LNG Norman Lady 50 197350 922 87 3 000 m Accounts Höegh Galleon 100 1974 50 922 87 000 m3 Höegh Gandria 50 1977 71 630 126 000 m3 Accounts – Consolidated 3 Matthew 0 1979 75 171 126 000 m Statements of income 40 Newb. MHI-2184 34 10/2005 74 400 147 000 m3 Balance sheets 41 3 Cashflow statements 42 Newb. MHI-2185 50 2/2006 74 400 147 000 m Notes 43 Accounts – Leif Höegh & Co ASA Statements of income 53 Balance sheets 54 Cashflow statements 55 Notes 56 Auditor’s report 59 Vessels operated by Leif Höegh & Co Consolidated per 31.12.2002 Shareholder relations and Wholly Total no. analytical information Vessel or partly Owned Chartered in Chartered in of vessels Annual general meeting 10.04.2003 type owned by LHC by others >12 months <12 months operated Shareholder relations 60 Ro/Ro 26.0 - 9.0 10.0 45.0 Analytical information 62 Financial calendar Report 1st quarter 10.04.2003 Gas – LNG 2.0 2.0 - - 4.0 Report 2nd quarter 10.07.2003 Dry Bulk 2.0 - - - 2.0 Words and expressions 64 Report 3rd quarter 17.10.2003 Open Hatch 10.0 - - - 10.0 The fleet Preliminary report 2003 05.02.2004 Reefers 11.5 1.5 - - 13.0 Total 51.5 3.5 9.0 10.0 74.0 Design: Anisdahl, Sand & Partnere. Photo: Ole Walter Jacobsen and Höegh archive. Print: GAN Grafisk AS. March 2003. LHC’s corporate strategy is producing results 1 Satisfactory results for the core segments Ro/Ro and LNG strengthened Leif Höegh & Co’s financial position in 2002. Considerable investments have been decided in these two business areas, which will provide a foundation for future growth. World economy grew marginally in 2002, while uncertainty and turbulence characterised M Thor Jørgen Guttormsen major finance markets. The US dollar weakened, whereas the oil price increased considerably. This influenced the company’s results. The growth in world trade was also weaker in 2002 than during the 1990s. While several shipping segments were influenced by large fluctua- tions, the markets for Ro/Ro vessels and LNG carriers were stable with a good balance between supply and demand. The demand for car carrying tonnage was at a high level throughout the year, and the global LNG carrier fleet is for the most part employed on long- term charters. LHC’s core segments, Ro/Ro (HUAL) and LNG, were less vulnerable to market fluctuations. The company’s activities in these two segments have been built on a high level of compe- tence, competitive transportation and logistics solutions, as well as long-term transportation contracts and customer relations. The entry barriers for new operators are considered to be high. At the start of 2003 there are no clear signs of improvement in the world economy and the situation in the Middle East is uncertain. In spite of this, we believe that the Ro/Ro segment will continue to develop positively, based on long-term customer relations and flexibility in the adaptation of services and products in the logistic chain. The growth in the LNG segment will continue to be based on long-term contracts with well established partners. Important steps have been made in the implementation of the company’s strategy. Today, LHC has become a more focused company, involved in fewer, but historically profitable seg- ments. Remaining activities have either been sold or the commercial operations have been transferred to other companies. In 2003 we will continue to strengthen our position for future growth. This will involve continued adjustment of the organisation, further development of IT systems and focus on efficient operation. Environmental awareness and protection of the environment are integrated parts of LHC’s strategy. A satisfactory year is behind us, and we see interesting opportunities to develop the com- pany further and to offer services which meet the customers’ needs and requirements. Thor Jørgen Guttormsen President We see interesting opportunities for a continued growth of the company 2 Company profile Leif Höegh & Co is an international shipping company with head office in Oslo. The company offers competitive transportation and logistics solutions to customers worldwide within selected industrial shipping segments. Ownership and strategy Leif Höegh & Co (LHC) was founded in 1927. The Høegh family owns or controls 66% of the shares in the company, ensuring a stable ownership structure and a long-term perspective of the company’s strategy and operations. LHC’s main strategy is to be a major player in the Ro/Ro segment and in the transportation of liquefied natural gas (LNG). The target is to increase the long-term return on invested capital through less diversification and a sharper focus on the historically profitable segments, Ro/Ro and LNG. LHC also aims to have the necessary financial strength to develop these two segments further. Operational structure Leif Höegh & Co ASA (LHC) M M M M Höegh Fleet Services AS (HFS) HUAL AS (HUAL) Leif Höegh & Co Shipping AS (LHS) Leif Höegh (U.K.) Ltd. (LHUK) M M HFS Philippines HUAL Benelux B.V. HFS China Ltd. HUAL UK Ltd. HUAL Germany GmbH HUAL France S.A.R.L. CETAM S.A.S. HUAL North America, Inc. HUAL Japan K.K. HUAL Middle East LHC China/HUAL China Kiwi Car Carriers (NZ) Ltd. 3 Activities Ro/Ro Through HUAL, LHC operates a fleet of about 45 vessels within the deep sea and short sea segments and is thus one of the world’s largest operators in the transportation of cars and high/heavy rolling stock. The company has four newbuildings on order. LNG LHC operates four LNG carriers, of which three are wholly or partly owned, and has two new- buildings on order.