Vessel Impairments Hit Torvald Klaveness’ Earnings

Norwegian shipping company Torvald Klaveness concluded 2016 with a loss of USD 58 million negatively impacted by impairment of container vessels, compared to a loss of USD 23 million seen in 2015.

Due to a solid cash position after the sale of the five self-unloader vessels in January, Klaveness repaid both bond and bank debt and strengthened cash deposits during 2016.

During the year, the company took delivery of three vessels and has additional four vessels under construction, one of which will be delivered in 2017.

“Results for the combination carriers weakened compared to 2015, but were still satisfactory. The container segment was impacted by lower rates and impairments, whilst the results for dry bulk suffered from continued weak markets and low volatility,” Klaveness said.

Earnings for the combination carriers weakened in 2016, mainly due to a weaker tanker market, somewhat higher spot exposure and lower transported caustic volumes.

The container market weakened further in 2016 resulting in an increase in idle days for the Klaveness container vessels, however rates above the general market were still achieved due to the vessels’ fuel efficiency, according to the company.

In addition to managing own vessels, Klaveness acts as an operator and manages a portfolio of physical and financial contracts linked to the Panamax and Supramax dry bulk markets.

As a result of weak dry bulk markets and reduced margins, chartering and trading focused more on industrial type of cargo clients and tailor made services.

The total operated dry bulk fleet was 116 and the number of vessels in the Klaveness pools counted 49 vessels at year-end. The dry bulk activities generated a net revenue of USD 11 million in 2016, down from USD 20 million in 2015.

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