d’Amico Shrinks Loss, Bullish on Tanker Market Recovery
- Business & Finance
Better market conditions and cost efficiencies helped the Italian tanker shipping company d’Amico International Shipping (DIS) narrow its net loss in the third quarter of 2019.
The company’s net loss at the end of the third quarter was USD 8.1 million, against a net loss of USD 21 million seen in Q3 2018.
d’Amico also narrowed its nine-month net loss to USD 32.5 million from a net loss of USD 41.2 million suffered in the corresponding period of 2018.
“In the first nine months of 2019, we continued to pursue our strategic goal of strengthening our balance sheet and liquidity position. In addition to the share capital increase of around EUR 44 million … DIS raised around USD 37.0 million of additional liquidity through some sale and sale-and-lease-back deals finalized in the first nine months of the year, with a further USD 4.2 million in net cash from such transactions generated in October,” Carlos Balestra di Mottola, Chief Financial Officer of DIS, said.
“At the same time, we have been actively working on achieving a more efficient cost structure, obtaining some positive results in 2019, with lower overhead costs and operating expenses relative to the previous year,” he added.
Time charter equivalent earnings rose to USD 59.8 million in Q3 2019 from USD 55.1 million in Q3 2018 and to USD 180.1 million in the first nine months of this year from USD 180.7 million in the first nine months of 2018. In terms of spot performance, DIS achieved a daily average spot rate of USD 11,616 in Q3 2019, compared to USD 8,689 seen in Q3 2018. In the first 9 months of 2019, a daily average spot rate was USD 12,786, 20.9% higher than USD 10,574 achieved in the same period of 2018, due to the improving markets.
“The freight market for our vessels is currently benefiting from the reduced transportation capacity in the crude sector, due mainly to sanctions affecting a number of these vessels and to scrubber retrofits. Spot rates which are already at profitable levels for our vessels, could improve further this winter as refining throughput ramps up towards the end of the year,” Paolo d’Amico, Chairman and Chief Executive Officer of d’Amico International Shipping, explained.
In early October, DIS took delivery of its last newbuilding, a scrubber fitted LR1, completing its USD 755 million investment plan launched in 2012. Since 2012, DIS has added a total of 22 ‘eco-design’ product tankers, in line with its strategy to modernize its fleet.
“Over the last few years DIS embarked on well-time and substantial newbuilding program, while maintaining a prudent commercial strategy. More recently the company focused on strengthening its financial structure and this is going to be one of our continuing priorities,” d’Amico noted.
“Looking at the future, we maintain a very positive outlook for the product tanker industry. Fundamentals are very solid, with an orderbook at record low levels and a growing demand for seaborne transportation of refined products,” DIS’ CEO continued.
He further said that the new IMO regulations, which limit the sulphur content in bunker fuels to 0.5% from January 2020, should further stimulate refining activity and demand for the company’s vessels.