Singapore-listed containership owner Rickmers Maritime recorded a net loss of USD 129.6 million in the fourth quarter of 2015 against a net profit after tax of USD 11.2 million in the corresponding period of 2014.
The plunge in profit came as Rickmers Trust Management, the trustee-manager of Rickmers Maritime, recognised non-cash impairment charges of USD 128.4 million in 4Q2015 in light of the depressed charter market.
The trust reported lower charter revenues of USD 24.1 million for the fourth quarter of 2015 and USD 108.5 million for the full year 2015, due mainly to lower market charter rates of vessels which commenced new charters in the year.
On a full year basis, the trust recorded a loss of USD 129.2 million in 2015 compared to a loss of USD 16 million from a year before, due mainly to higher impairment charges of USD 148 million. Excluding the impact of impairments in 2015, the trust would have registered a profit of USD 18.8 million.
Soeren Andersen, the Chief Executive Officer of RTM, said, “Having financial flexibility is crucial in this market. The exit from the Intercreditor Deed (in November 2015) has taken the pressure off the trust to seek further extension of the value-to-loan (VTL) covenant waiver which was due on 31 Dec 2015. This allows us to maintain focus on weathering the depressed shipping market in this demanding period by keeping our vessels employed with minimal idle time.”
During the year, the trust repaid USD 50.5 million of secured bank loans, reducing its outstanding secured bank loans to USD 314.1 million as at 31 December 2015. The trustee-manager said that it was in discussions with the lenders to extend the maturity of a bank loan due in 2017, and was exploring alternatives to refinance the medium-term notes due in May 2017.
Rickmers Maritime’s fleet of 16 containerships achieved utilisation rate of 98.2% in 4Q2015 despite muted demand, bringing utilisation for the full year to 99.2%.
At the moment, the trust’s fleet is 53.6% employed for 2016. Through its existing charter contracts, the trust has USD 144.6 million of secured revenue between 31 December 2015 and the expiry of the last charter party contract in 2019.
“While the market remains depressed, we are seeing pockets of opportunities within the panamax segment. More vessels of our type are being deployed by feeder operators to serve the influx of large tonnage to move containers to hub ports. For example, Moni Rickmers is chartered to Maersk Line’s Intra-Asia feeder operator, MCC Transport. The depressed oil price also reduces our customers’ cost savings from utilising large containerships, making smaller vessels like ours more attractive to the market in the medium-term,” Andersen added.
According to Clarkson Research Services, global container trade is expected to grow by 4% while container vessel capacity is expected to increase by 3.5% in 2016. Stronger trade growth and higher scrapping activities in 2016 could help to improve freight earnings.