Oslo-listed dry bulk shipping company Western Bulk’s Chartering division increased its contract coverage for 2015 and thereby reduced its market exposure in the fourth quarter of 2014.
By booking forward cargo contracts in Q4-14, the 2015 contract coverage for the firm chartered-in tonnage reached 94% by the end of Q4-14, compared to just 36% in the beginning of Q4-14.
“With WB Chartering’s significantly increased contract coverage, we enter 2015 on a completely different footing compared to 2014. The contract coverage has continued to increase through January, and contributes to protect WB Chartering against the continued weakening market in the beginning of the new year”, says Jens Ismar, Chief Executive Officer of Western Bulk.
The group managed to increase its financial flexibility by entering into a new USD 22 million bank overdraft facility in the fourth quarter. As of 31st of December 2014, the group had drawn USD 20 million on the overdraft facility, the results read.
The group’s Adjusted Net Result in 2014 ended at USD -11.8 million, compared to USD 11.2 million in 2013, the group said in its preliminary quarterly results.
Weakened results were attributed mainly to a Net TC result that declined by USD 21.9 million from 2013 to 2014, as WB Chartering’s Net TC margin declined.
The Net TC result continues to be weak due to the losses from the previous long position on tonnage.
The USD 6.8 million decrease in the Net TC result from Q3-14 to Q4-14 was primarily caused by WB Chartering’s weaker performance, the group said.
“This was related to weak market conditions combined with base margin being hampered by falling fuel prices, as freight rates were rapidly adjusted down in the market to reflect reduced fuel costs, while the more expensive fuel stock onboard had to be consumed before restocking with cheaper fuel,“the results added.