Following a series of one-off incomes, including payment for a canceled contract, the Belgian LNG and LPG carrier owner and operator Exmar saw its 2016 profit triple to USD 35.8 million, compared to USD 11.2 reported last year.
The result has been positively influenced by USD 14.3 million in badwill recognized on the acquisition a share in the pressurized fleet held by Wah Kwong and USD 9 million termination fee paid by Pacific Exploration and Production (PEP) on the Caribbean floating liquefaction unit (FLNG).
Although the company’s operating income also increased to USD 123.1 million in the period, against an operating income of USD 115.5 million seen in 2015, Exmar said that its revenue for the year slid to USD 96 million from USD 112.2 million.
Despite deteriorating market conditions, the operating result of the LPG fleet in 2016 was USD 34.2 million, compared to USD 17.8 million in 2015. The result has been positively influenced by USD 14.3 million in badwill realized on the acquisition of the remaining 50% in ten pressurized vessels.
VLGC earnings in 2016 have recorded a significant drop compared to the previous year, owing to a lack of arbitrage opportunities, a slowing down of US LPG export volume growth and the delivery of 45 vessels.
Outlook for 2017 remains difficult due to a pessimistic product market outlook and the expected delivery of 23 more VLGC’s in 2017, according to Exmar.
Additionally, the midsize segment has seen major corrections throughout 2016. Difficult product pricing and increased vessel supply have led to sharp reductions in earnings starting in the first half of 2016.
In 2016, the company took delivery of three 38,000 m³ ships Knokke, Kontich and Kortrijk, while the fourth LPG ship Kallo was delivered on March 30, 2017.
With three additional MGC newbuilds foreseen between July 2017 and January 2018, EXMAR expects to secure employment opportunities for these vessels as they are beneficiaries of the improved capacity, greater efficiency and lower fuel consumption.
“After a challenging year 2016 with ample ships incurring idle time both East and West, the fourth quarter 2016 and start of 2017 saw rates creeping up as a result of promising outlook figures and shipping tightness in the East,” Exmar said.
The company added that its focus remains on developing term business with first class customers both in South East Asia and Europe.