Declining spot market rates and vessel impairments have pushed tanker shipping company Maersk Tankers to a USD 483-million loss in the second quarter of 2017 from a profit of USD 28 million recorded a year earlier.
The vessel impairments worth USD 464 million were due to an expected continuation of the lower asset valuations, the company said.
The tanker giant saw a drop of 27 % in average Time Charter Equivalents (TCE) when compared to Q2, 2016, as freight rates declined in both West of the Suez and in the East.
“The decline in freight rates was due to a high influx of new vessels growing the global product tanker fleet by 1.3% and further increased refinery maintenance, particularly in East Asia. Additionally, drawdowns of oil inventories continue to lower demand for transportation of refined oil products,” Maersk said reporting the group’s results for the quarter.
The tanker operator’s underlying loss was USD 17 million, against a profit of USD 26 million in Q2 2016.
Maersk Tankers said it was working to curtail the loss through “optimized vessel positioning, cost savings and additional income from its third-party service, enabled by digital solutions.”
At the end of the quarter, the company operated 160 product tanker vessels, of which 81 are owned, 24 chartered and 55 tankers are on commercial management.
The order book totalled nine MR newbuildings and an option for 10 LR2 product tankers. One MR newbuilding will be delivered in Q3 2017, one in Q4 2017 and the last seven in 2018.