Oslo-listed owner and operator of LPG vessels, BW LPG has reported a loss after tax of USD 7 million in the second quarter of this year, trimming down the corresponding loss of USD 55.6 million from 2016.
“The loss of USD 55.6 million in the same quarter last year was mainly due to an impairment charge on vessels and available-for-sale assets of USD 76.4 million while there was no impairment charge in the current quarter,” the company said.
EBITDA for the second quarter amounted to USD 39.6 million, down by USD 12.7 million from the same quarter last year mainly due to a decline in LPG spot rates.
VLGC rates averaged USD 28.8 per ton on the benchmark Baltic route, nearly halving to USD 21 per ton after starting the quarter at USD 36 per ton. The weakness in freight was driven by worsening arbitrage economics leading to substantial cargo cancellations in the U.S. Gulf Coast and continued above-average fleet growth, the company said.
The global VLGC fleet currently stands at 253 ships on the water, with 29 on order. Fourteen ships have been delivered year to date, while three have been committed for scrapping.
“Heading into the third quarter, there has been an uptick of fixtures on the long-haul US to Asia route going via the Cape of Good Hope (the longer route) rather than via the Panama Canal. However, this positive development on the distance side of the shipping demand equation is continuing to be partly offset by the adverse impact of U.S. cargo cancellations,” BW LPG explained.
In July, BW LPG signed a contract to sell VLGC BW Vision as part of the company’s fleet renewal strategy. The 2001-built vessel is expected to be delivered in September 2017, the company added.
As World Maritime News reported, during the same month, BW LPG and Global United Shipping India Private Limited teamed up on the establishment of a joint venture in India, BW Global United LPG India Private Limited.
The JV, set to become operational by the end of the year, will own and operate a fleet of VLGCs for the transportation of LPG within Indian waters.