UK-based shipping company Navig8 Chemical Tankers has ended the fourth quarter of 2016 with a net loss of USD 3.6 million, compared to a net profit of USD 9.1 million seen in the same period in 2015.
The decrease in net income is mainly attributable to lower gross average daily time charter equivalent (TCE) rates achieved in the three months ended December 31, 2016, partially offset by an increase in total operating days compared to the same period in the prior year, and increases in vessel operating expenses, depreciation and interest income related to the expansion of the company’s operating fleet.
The revenue for the period was slightly down at USD 33.8 million from USD 35.2 million reported a year earlier.
“The chemical tanker market remained under pressure in the fourth quarter, driven in part by fleet growth and weakness in the clean petroleum product markets that shifted swing tonnage from the product tanker market into traditional chemical tanker trades,” Nicolas Busch, Chief Executive Officer of Navig8 Chemical Tankers Inc, said.
Busch added that a rise in demand for chemicals, palm oil and clean petroleum products helped to absorb incremental capacity and led to improvements in the chemical tanker market beginning in November.
“The market is forecast to tighten in 2017 and beyond with chemical tanker demand forecast to outpace the growth in the supply of larger chemical tankers,” he said.
During the fourth quarter, Navig8 Chemical continued expanding its fleet with the delivery of two 49,000 dwt IMO2 Interline-coated chemical tankers, Navig8 Tourmaline and Navig8 Tanzanite, and two 25,000 dwt stainless steel chemical tankers, Navig8 Spark and Navig8 Stellar.
Additionally, the company took delivery of one 25,000 dwt stainless steel chemical tanker, Navig8 Saiph, in January 2017.
The remaining three vessels, a part of the company’s contract to acquire 32 fuel-efficient newbuilding chemical tankers, are scheduled to be delivered by the middle of 2017.
The fourth quarter also saw the company secure financing for its newbuildings, as it entered into a USD 54.3 million secured loan facility on November 3, 2016, to finance the last two of its S-Class vessels currently under construction at Kitanihon.
Upon their respective deliveries, the company’s vessels have and will be deployed in commercial pools managed by the Navig8 Group, including the Chronos8, Delta8 and Stainless8 pools.
The loan facility covers approximately 65% of the contract price of the vessels and was provided by a European bank, Navig8 Chemical said.