Ernst Russ to Pursue Further Ship Acquisitions

Germany’s asset management company Ernst Russ (ER) announced plans to further expand its fleet in the future, following a profitable 2018 financial year. 

In the 2018 financial year, the company’s revenue increased 20% year on year to EUR 52.7 million (USD 59 million) from EUR 44 million seen a year earlier.

Income from the shipping segment rose by EUR 4.3 million, accounting for around 49% of revenue in 2018.

Consolidated net income after tax also developed positively and increased EUR 0.2 million to EUR 6.4 million in 2018.

In the shipping segment, the focus was on expanding the fleet through direct ship investments and substantial equity holdings. The ‘ElbFeeder’ joint venture established in 2017 was expanded to seven vessels during the 2018 financial year.

Another ship was acquired as a direct investment and investments were also made in ship funds.

According to Ernst Russ, it is pursuing continuous growth in this area by monitoring the relevant markets. The group intends to test individual investments in all shipping segments in a “targeted manner”.

“We are aiming to expand the fleet in the future by acquiring additional ships,” the company revealed.

During the first few months of 2019, Ernst Russ Group, together with Peter Doehle Schiffahrs-KG, sold their shares in Hammonia Reederei to a group of Scandinavian investors. As explained, the transaction means that the group is focusing its activities on asset investment and asset management in the shipping segment.

With regards to the sulphur cap 2020, the ER Group said its welcomes the IMO regulations that will come into effect on January 1, 2020. It is expected that the relationship between supply and demand would also be reorganized, creating the basis for lasting improvement of the charter and freight markets.

“We can be cautiously optimistic that the IMO 2020 regulation could have a favourable impact on the markets by speeding up recycling and reducing available tonnage… Of course, such an increase in rates may also have a positive impact on second-hand prices,” the company said.

Ernst Russ added that, together with its partners and charterers, it is testing individual solutions ranging from conversion to environmentally-friendly LPG propulsion on an ongoing basis and deciding on implementation in individual cases.

The company currently manages a fleet of around 90 container, tanker and bulk vessels as well as other ships, which are under direct management or managed as fund vessels by shipping partners.