J. Lauritzen Posts 1Q Loss amid Challenging Markets
Danish shipping company J. Lauritzen widened its net loss in the first quarter of 2017 to USD 12.4 million from a net loss of USD 8.3 million posted in the same period last year.
In 1Q 2017, EBITDA before special items amounted to USD -7.4 million against USD -17.2 million recorded in the same period of 2016. The improvement was due to the strengthening of dry cargo markets compared to the sharp decline in 1Q 2016 and improved market conditions for smaller gas carriers, the company said.
“Despite market improvements in 1Q, dry cargo markets continue to be challenging”, Mads P. Zacho, J. Lauritzen’s CEO, commented, adding that the company is pleased “that the market for smaller gas carriers saw some improvements in the first quarter of 2017.”
In the company’s bulker segment, Lauritzen Bulkers, an average number of operated vessels reached 80 in the three-month period ended March 31, 2017, compared to 103 in 1Q 2016. In addition, EBITDA before special items for 1Q was USD -11.5 million against USD -19.9 million in 1Q 2016.
Furthermore, in the gas carrier segment, Lauritzen Kosan, an average number of operated vessels reached 30 in 1Q 2017 compared to 36 in 1Q last year. EBITDA before special items totaled USD 6.4 million compared to USD 5 million in 1Q 2016.
During the quarter, J. Lauritzen implemented organizational and cost adjustments in an effort to improve its “competitive position”.
Earlier this year, World Maritime News reported that the company agreed upon main terms for a new financing package from banks and its owner, Lauritzen Fonden. The main terms of the financing included capital injection from Lauritzen Fonden, modification of the repayment schedule and amendments to existing loan facilities’ covenants.
In April, a new agreement was obtained with the company’s core lenders and owner. Under the new deal, J. Lauritzen secured a fresh boost as part of the financing package which now amounts to up to USD 80 million.
According to the company, the new agreement continues to include a four-year amortization reduction and maturity extension to 2021 by core bank creditors. The revised agreement, which is subject to satisfactory final documentation, is expected to strengthen J.Lauritzen’s balance sheet and reduce its financing cost.