Awilco LNG cuts net loss in Q2

Oslo-based Awilco LNG, the owner of two 156,000 cbm LNG carriers, reduced its net loss in the second quarter of this year due to higher activity of its vessels and steady spot rates.

Awilco LNG’s net loss dropped to $10.1 million in the second quarter, as compared to $11.5 million in the same quarter last year and $10.4 million in the previous quarter.

The shipping company’s freight income rose slightly to $2.6 million as compared to $2.5 million in the first quarter. Freight income was lower by $5.8 million year-on-year.

Both of the company’s 2013-built LNG vessels, WilForce and WilPride, were operating in the spot market in the quarter under review.

Fleet utilisation for the quarter ended at 83 percent as compared to 41 percent in the first quarter o this year.

“Although utilisation increased significantly from the previous quarter, freight income did not due to low paying positioning voyages, which will benefit results in the third quarter,” Awilco LNG said in its quarterly report.

Awilco LNG noted in its report that the LNG shipping market started to improve after an unexpectedly slow start in the beginning of this year.

The falling gas price trend from the first quarter leveled off and stabilised in the quarter under review.

Far East gas price started at $5.3/MMBtu and ended at $5.4/MMBtu while UK NBP and Henry Hub prices started at $4.9/MMBtu and $3.1/MMBtu and ended at $4.8/MMBtu and $3.2/MMBtu respectively.

The quarter started with day rates reported at $30,000 and $28,500 West and East of Suez and ended at $40,000 and $30,000.

“In the third quarter both activity and rates have continued the firming trend, leading to rates reported at $43,000 and $40,000 West and East of Suez respectively, in addition to increasing ballast payments, presently on full round voyage basis,” Awilco LNG said.

Looking forward, Awilco LNG expects the volatility and seasonality in the LNG shipping market to continue, but as additional LNG production comes on stream the current tonnage overcapacity is expected to gradually be absorbed, resulting in an improvement in the market going forward.