Epic Gas Triples Its Loss

Singapore-based LPG shipping provider Epic Gas recorded USD 23 million net loss and USD 8.8 million operating loss in 2014, driven by weak cargo markets, geopolitical turmoil, substantial deliveries and dramatic falls in commodity prices, which pushed daily rates down to 10 year lows, the company said in its financial report.

The annual net loss increased almost threefold compared to USD 7.7m loss the company reported in 2013.

The majority of the net loss was recorded in the fourth quarter which stood at USD 16.1m. The operating loss for the quarter was USD 10.8m.

Epic Gas managed to increase its revenue to 117.1m in 2014, a 53% increase compared to the revenue of 78.3m recorded in 2013. The increase is attributed to a larger fleet, which also brought higher operating expenses.

Epic says that the largest declines in rates have been seen amongst vessels 5,000cbm and below, and with markets in Asia demonstrating particular weakness. In 2014, markets west of the Suez Canal have outperformed markets in Asia, in line with historical trends.

The weak time charter market in 2014 was also characterized by a paucity of tenders as downward price pressure in the underlying propane, butane and petrochemical markets impacted trading activity.

As commodity prices found a floor in late Q4 2014, time charter activity returned to the market, thus reducing Epic Gas’s spot exposure from the highs of Q3 2014.  The increase in activity, which has continued into the first quarter of 2015, has enabled Epic Gas to improve its time charter cover to approximately 50% of 2015 calendar days at an average rate of approximately USD 9,200 per day.

Facts Global Energy estimated the 2014 Global Seaborne LPG and petrochemical trade to be 69 million tonnes, up approximately 8% from 2013 seaborne volumes of 64 million tonnes. During 2014, Epic Gas transported 2 million tonnes of LPG and petrochemicals, or approximately 3% of the global trade.

The company controls a fleet of 47 vessels which serve the international supply chains of oil majors and commodity trading houses throughout Asia, Europe, Africa and the Americas.