Low Freight Rates Affect CBM’s Q1 Results

The executive committee of Compagnie Maritime Belge (CBM), a maritime group seated in Antwerp, has reviewed the results recorded for the first quarter of 2014.

The consolidated result for the first quarter 2014 amounts to USD – 3. 1 million. Bocimar, the company’s dry cargo transport arm,  contributes USD -4.3 million to the consolidated result for the first quarter of 2014.

Despite generally held optimism, the first quarter of 2014 was characterised by seasonally low freight rates.

The Cape market was once again affected by amongst other things weather-related factors – leading to high volatility – and the effects of a disruption in coal exports from Colombia. However, the main cause of the disappointment originates from the lack of Brazilian iron ore exports that were down by 25% on the previous quarter.

In the other segments, notably for Supramax vessels, the Indonesian ban on exports of processed minerals (nickel ore, iron ore and bauxite) took a serious toll on freight rates, with a cascading effect on the smaller sizes.

The average earnings for the first quarter for Bocimar can be summarised as follows:

  • USD/day                                                2014                                        2013
  • Capesize                                             22.740                                      25.075
  • Panamax/Post panamax               10. 342                                       7.690
  • Supra max                                          7.875                                          7.800
  • Handysize                                          10.254                                         7.557

Despite all the negatives, for the time being the market remains remarkably confident for a solid second half of 2014 and full year 2015.

This optimism is founded on an active period market for periods of up to two years, strong FFAs for the third and fourth quarters of 2014 and a second hand market, with very strong prices paid for older Capesize vessels.

As a result the market value of the Bocimar fleet has increased by more than 10% since the beginning of the year.

Taking into account:

  •  that China will continue to import more and more iron ore,
  •  the availability of additional export volumes of iron ore and coal,
  •  that the moderate number of scheduled newbuilding Capesize deliveries for 2014 and 2015 will be absorbed by seaborne trade growth,

Bocimar remains confident that markets will see more balanced supply and demand over the next 18 months.

CBM, April 25, 2014

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