MPC Container Ships Posts Q1 Loss amid Market Headwinds

Due to challenging container shipping market conditions, Norwegian shipowner MPC Container Ships ASA (MPCC) closed the first quarter of this year with a net loss.

The group reported a net loss of USD 7.7 million in Q1 2019, compared to a profit of USD 502 thousand seen in Q1 2018.

Total revenue was USD 46.7 million in Q1 2019, against USD 28.3 million posted in the corresponding period a year earlier.

Average time charter equivalent (TCE) was USD 9,240 per day in Q1 2019, compared to USD 9,991 per day in the previous quarter.

As explained, the results were impacted by the ongoing trade tensions and additional costs related to IMO 2020, among other factors reflecting market uncertainty.

“Since Q4 2018, container shipping has faced an exceptionally high degree of uncertainty and shift in sentiment. IMO 2020 and the recent escalation of US-China tensions are causing concerns for seaborne trade, in turn reflected in MPC Container Ships’ Q1 2019 financial results,” Constantin Baack, CEO of MPCC, commented.

“Despite of current sentiment, we expect healthy demand growth paired with limited supply growth for 2019-20, the latter supported by IMO 2020 impacts such as slow steaming and scrubber retrofits. For smaller container ships in particular, demand is forecasted to outpace total container shipping growth.”

“Similarly, feeder vessel supply is projected as lower than the overall market, fuelled also by increased demolitions of older vessels. The sum of these developments point towards a market rebalancing, as evidenced by recent months’ significant drop in idle fleet,” Baack added.

In April this year, MPCC entered into a USD 40 million, three-year revolving credit facility with CIT Group. The loan may be used towards investments, vessel upgrades and general corporate purposes.

As of March 31, 2019, the group has acquired and taken over 69 container vessels, whereof 61 are fully owned and 8 are operated in a joint venture.

MPCC’s main activity is to own and operate a portfolio of containerships with a focus on the feeder segment between 1,000 and 3,000 TEU.