Danish shipping company J. Lauritzen is ready for a market recovery on the back of its refinancing and recapitalization in 2017.
For 2017, the company delivered a loss of USD 45 million, slightly cut compared to a loss of USD 46 million reported in 2016, while its revenue for the period surged to USD 555 million from USD 420 million seen a year earlier.
At the end of the second quarter of 2017, the company completed a revision of its strategy and launched a series of strategic initiatives with scheduled completion during 2018.
The new strategy was financially supported by an agreement with core lenders together with a capital injection of USD 80 million from the company’s owner, Lauritzen Fonden, providing a stronger footing ahead of the expected gradual recovery of the market conditions.
With the JLA02 corporate bond as well as the related hedging debt repaid at maturity in October 2017, J. Lauritzen said it no longer has any listed debt.
“The refinancing and recapitalisation completed in 2017 strengthened our balance sheet,” Mads P. Zacho, J. Lauritzen CEO, said.
After bottoming out in 2016, dry cargo markets recovered during 2017, whereas the market for small gas carriers deteriorated during most of the year.
“Both the dry bulk market and the market for small gas carriers are anticipated to benefit from the expected rise in economic activity in 2018, more so as supply growth will be rather limited in both segments. Financially, we expect the result for 2018 to be better than in 2017, yet not satisfactory,” J. Lauritzen said.
Seven handysize bulk carriers were taken on medium-term, up to two years, time-charter with options for extension. One gas carrier was sold and another gas carrier was taken on medium-term time-charter during the year.
Lauritzen Bulkers and Lauritzen Kosan controlled a combined average fleet of 118 vessels compared to 128 vessels in 2016. At year-end 2017, the company owned ten bulk carriers and 18 gas carriers versus ten bulk carriers and 20 gas carriers at year-end 2016.