Latvian Shipping Company Sinks Deeper on Fleet Value Decline

Nasdaq Riga-listed tanker owner and operator Latvian Shipping Company (LSC) realised a net loss of USD 25.18 million in 2016, compared to USD 7.22 million net loss reported in 2015, attributed to ”the steady erosion in the value of the LSC’s fleet throughout the last year.”

The value of the company’s fleet declined by 24.13 million in 2016. The balance of the net loss – USD 3.67 million – in USD report was influenced by changes in USD/EURO exchange rate, LSC said.

The company’s annual revenue increased to USD 99.71 million from USD 92.84 million year-on-year due to slightly higher earnings from existing time charters negotiated during the stronger shipping cycle in mid 2015.

As a consequence of more vessels trading on the spot market, where revenue includes the purchase of bunkers, port expenses and commissions, the net operational revenue increased overall by USD 2.7 million.

LSC’s fleet remains unchanged at sixteen vessels, with LSC Group subsidiary, LSC Shipmanagement Ltd, appointed to technically manage the LSC Group owned fleet as well as seven third party tankers thus bringing the number of vessels under technical management to twenty-three.

The fleet’s operating profit for 2016 rose slightly to USD 53.73 million from USD 52.4 million in 2015 due to higher time charter income from contracts signed at attractive rates throughout 2015.

In December 2016, LSC reached agreement with a syndicate of three banks on main terms and conditions to re-finance the remaining outstanding balance under the existing USD 360 million loan facility which is due to mature in June 2017.

The refinancing remains subject to final documentary agreement, however LSC expects to be able to repay the remaining USD 121 million by 30 June, 2022.