Weak Product Tanker Market Pushes Hafnia to Loss
- Business & Finance
Denmark-based shipping company Hafnia Tankers ended the third quarter of this year with a net loss of USD 7.3 million, compared to a profit of USD 2.3 million posted in the corresponding period a year earlier.
“The overall product tanker market weakened further during the third quarter of 2017, reflecting the ongoing imbalance between supply and demand of tonnage. The drag in oil inventories and reduced trading activity did not support freight rates,” the company explained.
Operating loss stood at USD 0.72 million in Q3 2017, against an operating profit of USD 2.96 million seen in Q3 2016.
Revenue dropped to USD 43.3 million in the three-month-period ended September 30, 2017, from USD 44.4 million reported in the same period of 2016.
At the of the quarter, Hafnia had USD 50.8 million in cash and USD 563.8 million of bank debt.
“As of September 30, 2017, we had binding commitment from a first-class bank to fund the newbuilds, and in combination with our cash balance the newbuild program was fully financed. We have no debt maturities before January 2022,” Hafnia Tankers said.
Earlier this month, Hafnia completed its first sale and leaseback transaction in the Japanese market involving the company’s LR1 tanker, MT Hafnia Africa. The 74,500 dwt vessel has been sold to “a large Japanese private ship owning company” with an 8-year bareboat charter back with annual purchase options from year four onwards.
During the first nine months of this year, the company suffered a net loss of USD 5.1 million, compared to a profit of USD 14.9 million recorded in the same period last year.
“A continued decline in oil inventories, coupled with growth in oil consumption, should in combination with a reduced newbuilding orderbook generate an improved market over the next couple of years,” the company forecast.
As of September 30, 2017 Hafnia’s fleet consisted of 37 owned vessels and five chartered-in vessels. Vista Shipping, of which Hafnia Tankers has a 50% ownership, has two LR1 newbuilds on order, with expected delivering deliveries in Q1 2019.