Denmark-based shipowner Nordic Shipholding A/S recorded a loss after tax of USD 0.2 million in the first quarter of 2017, compared to a profit of USD 1.5 million posted in the same period a year earlier.
As disclosed, the drop in profit of USD 1.7 million was due to lower tanker time charter equivalent (TCE) revenue from the company’s vessels deployed in two pools, UPT Handy Pool and Hafnia Handy Pool, as well as higher operating expenses.
“In line with expectations the softer tanker market continued in the first quarter of 2017 with a decrease in TCE revenue from USD 8.5 million in first quarter 2016 to USD 6.8 million in first quarter of 2017. First quarter of 2016 was the last strong quarter before the tanker market softened,” Knud Pontoppidan, Chairman of Nordic Shipholding, commented.
In 1Q 2017, the average TCE rate earned by the vessels in the two pools was marginally lower than the forecasted daily rate, whilst the LR vessel Nordic Anne tracked the forecasted daily rate, the company said.
Furthermore, EBITDA fell to USD 2.3 million in 1Q from USD 4.2 million seen in the three-month period of 2016, due to the reduced TCE revenue and higher vessel operating costs.
During the quarter, the group made a partial repayment of USD 1.7 million (USD 4 million, including a USD 2.7 million cash sweep) on the term loan facility.
Currently, Nordic Shipholding’s fleet is comprised of six product tankers – five Handysize and one LR1 vessel.
For 2017, Nordic Shipholding expects its five Handysize vessels to remain commercially deployed in the two pools.
The current time charter for the LR1 vessel will expire in November 2017 if the charterer does not exercise its one-year extension option. The company intends to explore employment options during the second half of this year.
According to the company, the projected TCE revenue from the five product tankers in the pools and the income from the LR1 vessel are expected to be in the range of USD 25.5 – USD 28.5 million.
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