The fourth quarter of 2017 has brought Thailand-listed dry cargo shipowner Precious Shipping its first quarterly net profit since the second quarter of 2014.
The company said that it had earned USD 3.32 million of net profit in the quarter, mostly due to the recovery of the market.
However, for the full year 2017, the company remained in the red booking a loss of USD 3.76 million, which includes a USD 2.63 extraordinary impairment charge. Excluding the extraordinary item, the net loss for 2017 stands at USD 1.13 million, considerably cut when compared to USD 37.4 million of net loss reported for the previous year.
In December 2017, Precious Shipping completed its fleet rejuvenation plan launched five years ago. The company now has 36 ships in the water consisting of 8 Ultramax, 9 Supramax and 19 Handy bulkers with an aggregate capacity of 1.58 million dwt. The average age of the fleet is 6.3 years.
The company believes that dry bulk market rates are expected to continue improving in 2018 amid favorable gap between vessel supply and demand balance.
Specifically, net supply is expected to increase at about 1 pct during 2018 and 2019 whilst demand should be growing at between 4-4.5 pct, very similar to the demand growth seen in 2017.
The company believes that the low orderbook level when compared to the fleet ratio (9.3 pct) and existing age of the global fleet should result in the slowest pace of the global fleet growth since the turn of the century, with healthy scrapping expected in 2018 to 2020 due to the existing age profile as well as regulatory pressures.
“As supply and demand balance is very close, this recovery would be characterized by extreme volatility as any small change in demand or supply would have a disproportionate impact on the BDI,” the company pointed out.