Western Bulk Records Slight Rise in Its Q1 Performance

Western Bulk ASA, a global dry bulk shipping company,  has commercially controlled an average fleet of 178 vessels in the first quarter of 2014 (Q1-14), according to the company’s newly released financial results.

The Net TC result for the first quarter of 2014 ended at USD 12.4 million (Q4-13: USD 11.7 million), with EBITDA at USD 1.9 million (Q4-13: USD 1.6 million).

The Baltic Supramax Index was on average about USD 11,600/day in Q1-14, compared to USD 14,000/day in Q4-13. The rates are significantly down since mid-December, and there has been large basin variances.

“Western Bulk saw a marginal improvement of its performance in Q1-14 compared to Q4-13, despite a weak and very challenging market. We are cautiously optimistic on the market going forward, and have thus continued to add attractive optionality for future periods”, says Jens Ismar, Chief Executive Officer of Western Bulk.

As explained by the company, the Pacific market was particularly soft during February with less activity due to halt in Indonesian exports of bauxite and nickel ore and traditionally low activity during Chinese New Year holiday. The Pacific market has later regained some strength and outperformed the Atlantic market during March.

The Atlantic market has consistently weakened during the quarter, and has been hit by vessels being repositioned from a weak Pacific area and creating overcapacity in the Atlantic.

WB Chartering entered the quarter with an almost balanced book with slightly less cargo contracts than vessels, giving a good downside protection in a falling market. The division fully utilized its 3,100 optional vessel days available in the quarter at an average charter-in rate of about USD 9,800/day. WB Chartering used the cargo contract coverage booked for Q1-14 during Q4-13 to create a profitable trading pattern in a challenging market environment.

In the anticipation of a seasonal stronger Atlantic area for Q2-14, the margin per ship day has been negatively impacted from taking more backhaul cargoes and some ballasting to reposition vessels from the Pacific area and into the Atlantic area during the quarter.

WB Chartering saw a slight decline in its fleet to 178 vessels operated in Q1- 14, compared to 186 vessels in Q4-13 (153 vessels on average full year 2013) and has added about 5,700 extension option days for future periods.

In March, WB Chartering scaled up the Panamax team by employing 9 persons previously employed by K2 Shipping in Oslo. In addition, K2 Shipping has re-let some cargo contracts and chartered-in vessels to WB Chartering.

WB Shipholding took delivery of one newbuild Eco-vessel that is chartered-in on long term charter with purchase options. The vessel is chartered out to WB Chartering on a long term charter.

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